Automotive News: Get Piggy
Edward Lapham, executive editor of Automotive News, is so not a cheerleader anymore. In fact, the TTAC convert now reckons it’s going to be Lord of the Flies in Detroit. Lapham gathered this insight from an ex-GM exec who “has moved on to bigger and better things. Well, OK, at least better things. The exec has done enough since leaving GM that he has a broader view of the world.” [ED: is that code for some kind of deviant sexual practice?] The exec predicts that automakers, suppliers, and dealers were not likely to react to the current crisis by forming an alliance and working together to save their collective rear ends. Instead, each player will look out only for itself. For dealers, this means “wanton, willful, premeditated starvation.” GM won’t have to buy out weak dealers. It will simply feed them fewer and fewer models, and all but the strongest will die. My take: this should come as a surprise to no one who has studied the industry. Even in the best of times, Detroit’s senior executives have failed to build mutually-beneficial relationships with the unions, suppliers, dealers, car buyers, or even corporate middle management. And bad marriages rarely get better when debt piles up and bankruptcy looms.
Lord of the Flies? More like Battle Royale, only Red Ink Rick drew a spork, and the Asian carmakers drew a BFG 9000, a Hammer of Dawn and a gravity gun.
Lapham is correct. I watched companies that were built on their relationships with tech partners, resellers, and consultants get into stupid turf wars when the tech boom dried up. Many of them are gone, or a mere shadow of their former selves today. Oracle survived quite well because of their dominant market position, but it would be even better off today had they not destroyed their reseller and consultant chain and thrown their hardware partners to the wolves. IBM was the main benefactor.