Editorial: General Motors Death Watch 258: Stein X. Leikanger's "GM Politburo"

GM was a politburo building cars. GM died for the same reasons that the Soviet Union died: because it killed initiative and proved unable to manage its resources at a pace that matched competing economies. Just as the Soviet politburo promoted the party faithful, demanding adherence to the party line, GM management brooked no discontent, and would get rid of any dissenting voices, banishing them to the corporate equivalent of Siberia: away from RenCen. The Soviet Union destroyed itself because of its unwillingness to accept reality. Spending untold billions on a show military force, it starved all other facets of its economic life. The Soviet leadership also accepted incredible inefficiencies in its production apparatus and failed to exploit its vast reservoir of natural resources. Ditto GM.

Among car makers, GM at one time had the size of the Soviet Union among nations (Russia alone covers 13 time zones). And just as the Soviet Union proved too big to manage, once the frailties had been exposed, GM also proved unmanageable, having been set on a course of self-destruction years ago. The leadership was unwilling to turn away from its crash course; that would have meant accepting they were wrong. The Soviet Politburo was never wrong. GM leadership was never wrong.

These were self-evident truths and had to be accepted. Filling its organization with sycophants and nodding-heads, the GM leadership willfully remained oblivious to the changing world outside its walls. Occasionally, demonstrating the obduracy and carelessness of Soviet leaders, they would dismiss what other car makers were doing, often ridiculing initiatives that would later prove their own undoing.

Living in the false security that they could always slap around any dissenters in their own ranks, thus ensuring discipline, GM let “too big to fail” cloud its judgment. The adage “What’s good for GM is good for America” permeated the walls, and allowed the company to grow complacent and ignorant.

Case studies will be mining the GM example in years to come, just as scholars of politics and international relations are still trying to come to grips with the fall of the Soviet Union. It’s worth remembering that until just a few months before the Soviet Union fell apart, the CIA and other intelligence bodies around the world were convinced no such thing would or could happen. This was because they and the nations and militaries they served, were dependent upon a strong Soviet Union for their own reason for being.

Likewise, with GM, we have seen a skull-clanking failure to accept the truth not just inside GM, but in the surrounding world. Corporate ignorance results when companies operate with blindfolds. It results in organizations that are change averse, and that think strength lies in never questioning its few basic tenets of faith.

One could claim that the fall of the Soviet Union was the result of bad engineering and outdated technology. If the place had been better run, if it had been in the hands of forward-thinking people, who allowed initiative and rewarded successful solutions, then we might not have seen the dissolution of the Soviet communist empire.

While the Soviet politburo devolved to cant and polemic in the service of a failed ideology, the GM politburo resolved to make money by financing cars that were subpar. Both believed propaganda could make up for the flaws in their products. Towards the end, GM was channeling hundreds of millions for campaigns that sought to establish differences among car platforms that were obviously similar to any outside observer.

Both organizations failed to “walk the talk.” The Soviet leadership rewarded itself with an opulent lifestyle completely divorced from the realities of life for ordinary people. In the end, the dissonance became impossible to hide or defend. Special auto routes for the apparatchiki through major cities; special airports; secluded residential areas; segregated shops and resorts—all contributed towards telling the Soviet “nomenklatura” that things were just fine.

Similarly, operating out of RenCen, the GM apparatchiki had also locked itself in a bubble. Occasionally, pronouncements from the elders would reveal how out of touch they were. Rich people didn’t care about the price of gasoline; global warming was a crock of shit; and it was hell to be standing in line at the airport, waiting for a flight.

The last hand on the rudder at GM was that of an accountant, and his manifesto was a spreadsheet. As the bow of the leviathan they had constructed struck land, the members of the GM politburo looked up from the spreadsheet, cried out for the people to save them and then abandoned ship.

The individual republics of GM, the car brands, have been left to their own. Some will disappear, a few will reconstitute themselves. All should curse the politburo that destroyed them.