GM Bankruptcy: How badly will this go?
Posted by steven_spear | Under Auto Industry, Business Strategy, Innovation Thursday Jun 4, 2009That the Big Three were too big for bankruptcy was the argument in late 2008. How they would otherwise rebalance their obligations to dealers, employees, retirees, and suppliers consistent with their ability to meet those obligations was never well explained. Low and behold. We have bankruptcy. Not well explained either was how the government could provide assistance and then unwind its position in a way that met the needs of taxpayers and shareholders without being compromised and corroded by the politic process.
As David Sanger describes in the NY Times (”Obama’s Test: Restoring GM With a Limited US Role,” June 1, 2009) that question is still unanswered. Now and going forward, the government’s role will constantly subject to priorities far afield from the central questions: How to protect the taxpayer investment by making the company competitive.
Missing too is the key to making it competiitive: Shedding a management system inappropriate for modern day fast moving markets because it does not foster the breadth and speed of innovation needed to stay competitive in markets with intense rivalry.
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