The Tragedy of General Motors

Originally Posted on 4/12/06

I've been watching the GM saga unfold before the public eye for some time now. My interest was especially peaked after reading a Fortune Magazine article dubbed “The tragedy of General Motors”, February 20, 2006 issue. It's scary to think an American company of that size with its rich history is on the brink of bankruptcy. Lagging sales, struggling subsidiaries, rising health care costs and a unionized workforce on the verge of going on strike are just a few of the challenges GM is facing.

The implications of such a catastrophic event are mind boggling. Think about it…If GM files for bankruptcy: Delphi probably goes under or gets gobbled up…GMAC goes under or gets gobbled up…and Ford, which is struggling as well, will have to compete with the backlog of unsold GM vehicles that would probably be sold at obscenely discounted rates. Such a strain on Ford could, quite possibly, drag them under as well. Plus, you can forget about an American automotive institution ever regaining the top spot in the industry again…With rising oil costs and the ultra fuel-efficient foreign vehicles, such as the Toyta Prius model which touts an impressive 61mpg, really puts American companies at a major disadvantage.

I find it hard to believe that GM will ever find itself at the top of the kingdom again. Maybe I'm just being fatalist…But at this point, with all the information publicly presented, things are definitely looking bad…Let's just hope emergency turnaround expert, Jerry York, recently appointed as director of the GM board, can work some magic and bring this struggling organization back into the drivers sear.