Essay: The New GM - 7.10.09
And now for the hard part.
Now, you may find this bizarre, but when I started thinking about General Motors this morning, the first thing I thought of was Benjamin Franklin. When the founding fathers had finished writing the document that became our Constitution, a woman came up to him. “So, what kind of government have you given us?” she said.
“A republic,” Franklin supposedly answered. “If you can keep it.” President Obama and we-the-people-the-taxpayers have given GM a new lease on life -- but it is up to the corporation to keep it.
That won’t be easy. General Motors comes out of the financial operating room into what is still the worst economy in many years. What’s more, it is surrounded by more competition than ever.
Odds are that even in a best-case scenario, the Big Three will be no more than half of an auto world that might be better described as the Medium-Sized Six, plus assorted short subjects.
Yet there are a few hopeful signs. Chevrolet has, against all odds, a genuine new hit, or semi-hit car with its Camaro. There are also signs that the company understands - really understands - that it cannot do business in the same old bloated arrogant way. They can no longer waste billions and tens of billions on bizarre diversification schemes, like buying companies that have no connection to what their core businesses are. I think Fritz Henderson gets it. I hope the executives who have survived the purges get it. And I know that Edward Whitacre, General Motors’ new chairman, must get it. He is a man who hasn’t spent a day in the car business, but who knows how to build and grow corporations. What General Motors needs to do is to keep the best of the old GM, the knowledge and engineering know-how, and the vision that has created some amazing cars. Then, it needs to completely remake the corporate culture. GM needs to be run by a team of brilliant, level-headed businessmen who are, at the same time, neurotic, frightened of the competition, and a little paranoid. They need, in other words, to be convinced that they have to struggle every minute to be better than the competition in every way. That won’t be easy. This was a culture that was supremely arrogant long past the time it had anything to be arrogant about. However, what I see makes me think GM has at last put in place the tools to succeed. Yes - government ownership is a potential problem. At some point any company has to dare greatly and take big risks, and government ownership may inhibit that. Washington should get out of GM as quickly as reasonably possible. Still, we can’t forget that if it hadn’t been for the government, General Motors today would not exist at all. Somehow, despite the obstacles, I think the new GM has a good shot at making it. For all of our sakes, I certainly hope it does.

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