Since nobody knows, many are making educated (and very uneducated) guesses. The media, the wire services, the pundits—all are speculating. Even David Brooks, not widely known as a car guy, is speculating. He predicts a quagmire for the new GM and offers six reasons that have to do with the dreadful corporate culture that has existed for years at the company.
Brooks has a point but drives his argument to the extreme because, finally, he doesn’t understand the car culture. We won’t rehash all the reasons why the company went down (you know most of them), but we will state the obvious: If GM is to be reborn, it must come back totally reinvented, and not on the Alfred P. Sloan model of providing cars at all price points for all major market segments.
If it’s smart, GM.2 will not go head-to-head with Toyota, Honda, or Ford. It will create specialty offerings to serve niche markets that are only now emerging, plus established brand centers where it has dominance. I still think, though some have protested, that a specialty division for cars like the Corvette and Cadillac CTS-V makes sense. As Matthew DeBord suggests, let Chevy have the small cars and sedans and eco-cars; let GMC do the trucks and SUVs. Restructuring this way will require new business and merchandising models built on the way the car culture operates—something GM does understand.
What appears to bug so many people are GM’s egregious past mistakes and pursuit of short-term gain. Randy, who commented on my last post, argued this very well and, like Brooks, identified one of the big failure points that led to the debacle. I don’t agree that the Toyota model will work for them, however. “GM,” Randy says, “desperately needs a good enema, starting at the top, to wash out the entrenched Big 3 thinking that is proven poison at this point.”
Yup, it’s hard to disagree with that. On the CarGurus Facebook page, yesterday’s post drew almost 30 comments, most expressing anger at GM and an intent never to let them off the hook by buying that brand again.
Some of these folks don’t realize that GM is entering Chapter 11, whose outcome is a reorganized, recapitalized company, not Chapter 7, whose outcome is liquidation. And too many forget what Michigan Governor Jennifer Granholm said yesterday: “This is a terrible day in Michigan; there’s no doubt about it.” GM will survive, though it will leave great damage in its wake.