Comments on: Why Its OK if GM Dies

By: Thomas Tunstall

Thomas Tunstall — Mon, 13 Mar 2006 16:45:31 +0000

GM’s problems have been acquired over a period of decades, and it will take more than a year to turn things around. GM also suffered from the tenure of a bozo-CEO in the 1980s – Roger Smith, who was the target of Michael Moore in “Roger and Me”. Smith used his position as chairman and CEO to buy off Ross Perot, and simultaneously sink hundreds of millions of dollars into a badly implemented robotics effort. A bozo-CEO can take a large organization down single-handedly. For now, the jury is still out on whether GM can survive Smith’s turn at the helm that ended with his retirement way back in 1990.

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By: Suresh

Suresh — Sun, 11 Dec 2005 03:58:23 +0000

Good read, Warren. GM's woes are not limited to a failure of leadership, and improved leadership will not resurrect the company. Surprisingly, GM's woes are not even caused by low quality; Cadillac CTS & STS and Chevy Corvette are world-class cars. Rather, concessions to the United Auto Workers of high pension and health benefits in exchange for reduced increases in wages have finally come back to bite GM. Reduced wages and benefits deductions probably increased its reportable earnings over the years. But, employee demographics have now increased the costs of those benefits.

So, what will happen? GM will go through a bankruptcy to reduce or shed its infrastructure, workforce, benefit burdens, and outstanding debts. The bankruptcy will yield a smaller GM and/or a GM ripe to be bought by a foreign auto manufacturer that can funnel its products using GM brands through GM's dealerships. A foreign central bank with excessive dollar reserves (People's Bank of China, Bank of Japan, Bank of Korea?) is more than capable of providing cheap loans to a local manufacturer for such a purchase. The work that remains in the U.S. will be high-end work, such as design work and perhaps assembly of high-end cars such as those mentioned above.

By: Fire Someone Today

Fire Someone Today — Fri, 09 Dec 2005 17:32:20 +0000

GM can die

Coyote Blog says it’s okay if GM dies, and it is okay with me, too. Don’t get me wrong â€“ I’m not rooting for GM to die. (Well, I did wish it a few times while sitting in an Avis…

By: Searchlight Crusade

Searchlight Crusade — Wed, 07 Dec 2005 00:10:56 +0000

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By: Searchlight Crusade

Searchlight Crusade — Wed, 07 Dec 2005 00:05:05 +0000

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By: JohnDewey

JohnDewey — Tue, 06 Dec 2005 19:24:49 +0000

Warren,

Management may require 20-30 years to change corporate DNA. But strong leadership has turned around failing companies in just 3 or 4 years. Lee Iacocca at Chrysler and Gordon Bethune at Continental Airlines are two examples that come to mind. The changes may not have survived Iacocca, and Bethune's retirement may lead to Continental's demise. But both men did revive beached whales that had begun to smell.

Is GM too large to respond to Iacocca-style leadership?

By: dearieme

dearieme — Tue, 06 Dec 2005 02:09:58 +0000

Let it go. In Britain, Government “stepped in” to save our equivalent (“BL”) and the result was great expense for the taxpayer to no good purpose.

By: David Porter

David Porter — Mon, 05 Dec 2005 21:24:48 +0000

Ouch! I live in Lansing, Michigan and hate to say that I agree.

Thankfully, if the state closes it's doors I have a home out in Scottsdale where I can hang my hat.