General Motors Death Watch 198: History is Bunk

Robert Farago
by Robert Farago
general motors death watch 198 history is bunk

Today is General Motors’ one hundredth anniversary. Ironically, GM reached the century mark in the same year that it ended its reign as the world’s largest automaker. More importantly, the American automaker’s status as the world’s most profitable private enterprise has long been consigned to the scrapheap of history. The former economic powerhouse is now worth less than it owes, as it slouches towards bankruptcy. While The General’s camp followers may wish to set aide this day to bask in past glories, it’s the perfect time for the ailing American automaker to draw a line under the past and face the future.

To begin, GM must abandon its dreams of world domination. The automaker’s well-traveled centurions must surrender their multi-maniacal global ambitions. “World platforms” or no, GM will never again achieve international supremacy, let alone dominance. Not in the UK, China, India, Russia, South America or the United States. Not as Chevrolet or Opel or Saturn or any other of the company’s many guises.

Today’s GM lacks the focus, drive, determination, savvy and resources it needs to mount an all-conquering assault on any of the world’s major territories. Toyota, on the other hand, doesn’t. Hyundai doesn’t. VW doesn’t. Suzuki doesn’t. Not that it matters. All of these car companies (and GM and more) face each other in their international fight for survival. In today’s global economy, everyone is a niche player– even if some “niches” are more equal than others.

Ostensibly, GM has already made this jump from hyperspace. When Toyota wrested the world’s largest crown from Motown’s mavens, CEO Rick Wagoner and his Car Czar Bob Lutz both hummed hakuna mutata. Profits were the new black. Wrong. GM must face a future without profits. I repeat: GM must realize that it can’t make money in its current, bloated, Byzantine form. And it’s not going to make money for a long, long time.

Once GM files for Chapter 11, the automaker will enter the proverbial wilderness. Customers will run for the hills. Dealers will die. Executives will flee. Unions will attack. Regulators will interfere. Opportunists (i.e. lawyers and rivals) will pick at the entrails. Even so, a plan for GM’s emergence from C11 protections will arise. Whatever it is, it won’t be quick. The General’s recovery will require at least two product cycles, maybe more. It may not succeed. But the plan’s backers will, by necessity, take a long term view.

To make that work, GM must sever its ties to its historical business model. Death to CEO Alfred P. Sloan’s formerly transcendent strategy: an ascending range of automotive brands offering a car for “every purse and purpose.” GM must embrace the new paradigm: a wide price range of vehicles within one coherent brand structure (BMW, Mercedes) or two (e.g. Nissan and Toyota, discounting the Scion debacle).

In fact, General Motors as such must disappear, so that Chevrolet and Cadillac may rise from the ashes. And even these brands must be liberated from the weight of the past to find new resonance in the popular imagination. What separates a Chevy or Caddy (made anywhere) from any other existing brand’s products? Reliability? Longevity? Beauty? Opulence? Power? Comfort? Choose one. By euthanizing dead brands and gaining focus, the non-general General can fully capitalize on its squandered and stifled world-class talents.

But most of all, GM NA has to distance itself from GM of old.

No matter how invalid its foundation, the “perception gap” afflicting Buick, Chevrolet, Cadillac, GMC, Pontiac, Saab, Saturn and HUMMER products is a Grand Canyon-class chasm. In other words, GM is already dead to at least two generations of buyers: those who experienced the brands’ horrific quality and indifferent (to say the least) service, and those who never owned a GM product because they’ve always considered the automakers’ octo-branded handiwork deeply and completely undesirable.

Again, this effort requires reinvention rather than re-dedication. GM must be able to speak to customers about the “new” Chevrolet and Cadillac with factual sincerity. They must explain why these brands are different, now. America loves a comeback kid. But it will not tolerate, for lack of a better phrase, the same old shit in a different wrapper.

Of course, the full realization of that task would require GM to come clean about the mistakes of the past– if only internally. And that would mandate at least a notion of the meaning of accountability.

It is this deficit that defines GM’s recent history. For the last fifty years or longer, GM’s been a company in the thrall of executive ignorance, greed, arrogance and hubris. In that sense, the only worthy celebration of GM’s past would be one where the automaker’s guardians could finally declare that its culture of entitlement and insularity has been sent off into the woods to die, alone and unloved. Gone, but not forgotten.

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  • GeorgeM GeorgeM on Sep 29, 2008

    Of course, people are free to do as they like - but I'd like to point out that the "home team" people ... are anti-capitalist. The point of a capitalist system is that companies that fail to provide what the market wants are forced to either reinvent themselves or fail, making room for a company that will. This assumes, however, that customers will be looking for the best product at the best price. Insisting that certain makes are out of consideration for reasons unrelated to product suitability, quality, service or availability skews the whole system. I drive Hondas. Why? Because they've been impeccably reliable, and my experience at dealerships (and more importantly - service facilities) has been great. The idea that "all modern cars are about the same" is just not true - and the corporate experiences are VASTLY different. (Granted, I've heard hellish stories about Toyota dealers as well as GM service departments.) I started out with a new Ford, gifted to me as a go-to-college car. Starter motor failed at 15k, engine computer failed sometime later stranding me when I was headed home from college for Christmas. I've happily driven Hondas ever since, and I wouldn't touch anything GM makes if they were paying me to take it. To even have a chance at me (or people like me), whatever's left of GM or Ford or Chrysler after the coming catastrophe will have to generate at least a 10-year track record of reliability, innovation and service that meets the standard set by Toyota and Honda. I frankly don't see that happening - EVER.

  • Fallout11 Fallout11 on Oct 24, 2008

    Gardiner is correct, "GM does not have brands. It has labels that offer nothing unique or sufficiently appealing to attract consumers. Most are associated with a society and values that are as long gone as the straight-eight." GM would do better to kill all 8 blighted and irrevocably damaged nameplates and simply produce "GM" vehicles. It's all they are or have been for decades, anyway. Time for a fresh start, if they are to do anything at all.

  • IanGTCS Blue jays games are on AM so if I happen to be in the car when they are playing I listen. Sometimes I'll tune into the comedy station as well. If AM went away I'd really only miss listening to baseball but I imagine they would migrate to a local FM station.
  • Syke I still listen, primarily because Richmond Flying Squirrels (AA - Giants farm system) road games are on 910AM.
  • Timothy I have heard nothing in this article about the problems with the 3.3 liter engine. I have a 2014 Sorento with 3.3 v6. Purchased it from original owner with 68,000 miles on it. Drove it for 3 months, then leaking headgaskets! come to find out there is problem with head bolts pulling out of the block. Kia even has name for it, "soft block issue"! Dealer said not under warranty because I'm not original owner. I called customer service and they said same thing. They told me it was a defect but not under warranty. Pretty sad. After my Hyundai engine went bad and now this with Sorento, I'm done with both.
  • IBx1 Telling employees to relocate when housing prices are hyperinflated and interest rates are kissing double-digits, right before the next great depression deletes all that "value" they'd have to buy?
  • Jeanbaptiste The last time I used AM was in a Park area that said listen to 1300AM for water releases. That was a decade ago.