GM Files for Bankruptcy, Wipes Out Debt… But What About Building Better Cars?


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When I was born in 1955, General Motors was a hugely successful car maker. So much so that that just two years prior, GM’s president Charlie Wilson, who was Eisenhower’s nominee for defense secretary, make this famous statement when a senator asked him if he felt he could make a decision even if it were adverse to the interests of GM:

“I cannot conceive of one because for years I thought that what was good for our country was good for General Motors, and vice versa.”

But in the following decades, competitors from Japan, Europe and elsewhere took aim at the US auto market and introduced cars that were higher quality, lower cost, more stylish, more fuel efficient and higher performance. Did I leave anything out?

Well, GM did a good job building big honking trucks and SUVs for gas-guzzling Americans. But those days are over, too.

Meanwhile, it seems that GM’s executives kept rearranging the deck chairs as the Titanic started taking on water. Well, the ship has finally sunk as GM declared bankruptcy today to get out from under $172 billion in debt, more than double its assets.

More than five decades later, it appears that Wilson was right, because now U.S. taxpayers will own 60% of GM going forward. As GM goes, so goes our investment.

For the past several years I’ve been hearing how “legacy” costs have made GM’s cars uncompetitive. Well, now those costs are gone and GM has a fresh start. Or does it?

Aren’t GM’s problems deeper than just cars that cost too much to build? What about designing and building cars that more people actually want to buy and drive? What about revamping the dealer network so dealers provide a great buying and service experience?

Or, as has been suggested by John Todor, Axle Schultze and others in Who Will Miss Car Dealers? Not Customers!, why not use social media as a catalyst for customer-driven change?

What do you think GM should do with its second lease on life? Please respond with your ideas, and I’ll find someone at GM willing to listen.

I’m sure the coming months will be difficult for GM and all its partners and suppliers. They’ll need all the help they can get. Now that we Americans are owners, it’s the least we can do.


  1. PJ O’Rourke’s article in The Wall Street Journal, Saturday, May 30th, The End of the Affair presents some not-so-obvious ideas about GM’s failures.

    “Politicians, journalists, financial analysts and other purveyors of banality have been looking at cars as if a convertible were a business. Fire the MBAs and hire a poet. The fate of Detroit isn’t a matter of financial crisis, foreign competition, corporate greed, union intransigence, energy costs or measuring the shoe size of the footprints in the carbon. It’s a tragic romance—unleashed passions, titanic clashes, lost love and wild horses.”

    In the timespan that GM fell from profitability, cars have gone from passion-producing machines to “appliances” used for “dreary errands,” as O’Rourke states in the article.

    We won’t “out-Japan” Japan when it comes to economies of scale, and creating reliable, basic (if unexciting) transportation, but when it comes to connecting with buyer passion, Detroit has a record it shouldn’t walk away from. I don’t know anyone who has written a spirited song about a Camry, Accord, Altima, or Mazda 626.

    O’Rourke’s idea to hire poets seems as good a place to start as any.

  2. When you are in an industry where repeat purchase is in «years» rather than days like bread or yogourt,if you fail, you are in for a long ride before seing your customer back. If I skip 2 buying cycles because you did not treat me well, you have lost 15 years «of me».
    I bought an Alero and had problems starting «day1» up to my ears, the dealer owner in Montreal said, «you are too difficult to please, go get your car fixed in another GM garage». Ha! Ha! Ha!
    It was in 2002. Since then, I bought a Mercedes and as gas went up and my niece complaint that I was a typical polluting «boomer» I bought a Hyundai. GM? Did not get a penny from me since then and , sorry Bob, they won’t get me as a customer unless they drastically change their way to look upon the jerk that a customer represents to their eyes. Even if I was a «stockholder» by obligation as it is your case in the US, I would not encourage an industry that does not respect customers. The cars is a minute fraction of their problem, the dealers and the «top» has their head in the clouds and they can’t see down because of the clouds. I just got a letter thanking me for being a GM client, hey, we are in 2009! I wrote tens of letters to GM back then, to complain and the result was the same as putting my letters in the shredding machine. Now,M. Arturo Elias (real name?), president of GM Canada is scratching my back and thanks me of my support? They need a CRM tool as my letters have to be some where overthere.They could have excluded me from the massive «seduction operation». I hope your tax money will not be wasted, same for mine as Canada has poored money in GM also. Sad, but true and I bet I am not alone in this case.

  3. After my note sent yesterday and posted,thank you; I thought the story was over. What else could happen? This! To day I got a letter from «my» GM dealer «le relais Chevrolet» proud to announce me that they were picked to continue as a GM dealership (with the job they do, wisdom should have told them to close that dealership first) and they will continue to offer the service I have been used to!!!!! Wisdom would be not to offer the same service. And, no I am not used to it at all.
    To make a story short, my name and the names of other unsatisfied customers should have been withdrawn from these mailings. The conclusion of the president (M. F. Verdy)of the dealership: «be assured that our priority will always be the satisfaction of our precious «clientele». By the signee, this is the same person who told me to get my car fixed elsewhere while still garanteed. Nice 2nd start. They got money and are taking back the track that took them nowhere before…Not a change in the place they see the customer in the business equation.


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