What’s Good for General Motors is Good for the Country…
Former GM Chairman Charlie Wilson is given attribution for the phrase “What’s good for General Motors is good for the Country” and whether that is exactly what he meant or not, it certainly stands for the way most General Motors top executives have been thinking for the past 50 years. The pending Chapter 11 bankruptcy of General Motors may be an omen of more events than one might think.
For the past 50 years the world’s greatest automobile company has frittered away its market share and reputation with an unending string of strategically flawed management decisions and an arrogance towards customers and the Government that would be hard to make up. To compound the problem, General Motors invested too often foolishly (Hughes Aircraft, Direct-TV, Saturn, Suzuki) as well as agreed to outrageous labor agreements and compensation packages for top executives. Steadily over the years their product superiority disappeared and shortly thereafter their market share began its decline and that continues still today. How is it possible that such an Industrial giant could not find a competent management team in 50 years and turn things around?
So the question might legitimately be raised that if bankruptcy is the medicine for GM, would bankruptcy also be in order for the US? Over the past 50 years, under leadership of both Parties, America’s share of manufacturing capacity (and market share of products produced by this capacity) has steadily dropped. You might be quick to point out that life has been quite good these past 50 years, so what is the problem? I would counter that life was pretty good for GM’s employees and stock holders during most of that 50 years too.
GM lost its way by not remembering why the corporation existed (to make vehicles people wanted to buy). GM compounded its problem by choosing to serve primarily the money masters and specifically the ones who wanted to see stock appreciation. The US lost its way sometime around the early 1950’s and instead of developing and emphasizing diplomacy, it chose espionage and when that faltered, military force. Bay of Pigs, Vietnam, the Gulf War, and the invasion and occupation of Iraq were all expensive and unnecessary ventures (like buying Hummer or Saab) where the lost opportunity cost was tremendous. The US has a national mind set that we can borrow forever to meet our life style. This has been drummed into us by the example our national Government has set. Borrowing to invest may make sense, borrowing to consume is the fast tract to bankruptcy. Underlying these unbalanced budgets (that funded wars and the good life), was a political system too susceptible to money interests.
President Obama has set forth a set of goals that are game changers to the American Way we have come to know over the past 50 years. Obama wants to change healthcare, stimulate education, and narrow the widening gap between the rich and the poor. While I support these initiatives they too will fail if President Obama does not convince Americans that these changes must be paid for. If he takes the political expedient route and borrows the money, he will be hastening the day of reckoning and national bankruptcy.
This entry was posted on May 29, 2009 at 10:19 am and is filed under Barack Obama, Democratic Party, Politics, Republican Party. You can subscribe via RSS 2.0 feed to this post's comments.
Tags: bankruptcy, chapter 11, charles E wilson, general motors, what's good for America
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