I remember in the early 70’s, even during the Arab oil embargo, GM strutted around the automotive world like a colossus commanding nearly 50% of the automotive market and looked down on all the upstarts from Japan like Nissan(Datsun), Toyota and others.Its business model was working very well in the absence of true competition.That model said make as many lookalike cars as possible.To go from one model to another, simply change hood ornaments, grilles, head and tail lights.Forget technology, research and other time consuming things.Cash is the only thing that matters and that requires the dealers to get the cars out the door.
The results from the first two weeks of October are now in. GM has reported a whopping $1.6 billion dollar loss which comes on the heels of another monster loss last quarter. GM may have cannibalized its own sales for this year by offering deep discounts on the leftovers from last year’s models.The October sales are off by a whopping 57% over last year’s. The prognosis doesn’t look good either because GM has bet the house on its gas guzzling SUV’s and big trucks and has been caught with its pants down as gas price has raced past the $3 a gallon mark. GM’s choices are limited.Because of its legacy costs( retirement and health) it is simply unable to make any money on any cars other than its gas guzzlers.First of all, nobody wants their cars.Second, they have acquired an image of low quality and technology, partly as a result of the disdain they have shown for such things in the past and aggravated that problem by their arrogance and poor service over the years. And true to their tradition, they have belittled the hybrid car technolgy that is now all the rage and in which the Japanese have established an insurmountable lead.
If current trends continue, GM may well be headed for the scrap heap following its big parts division, Delphi.And that would be a shame for all Americans.
Now for the lessons for a hubris soaked ignoramus like Bush on what GM teaches us.At the end of WWII, this country was revered as the savior of all peoples from Nazi tyranny and Japanese Imperialism.Over the next fifty odd years, that image of a humanitarian giant has been slowly transformed into an ogre that grinds down poor peoples all over the world, supports tyrants and launches wars at the slightest pretext in pursuit of real or imagined threats.The War on Vietnam, launched with a manufactured incident has pretty well demolished the myth of America the benign giant.Now comes Iraq and the myriad violations of international norms that the U.S. was instrumental in developing and enforcing.This pretty well nails the door on our image.
It is apt that an ignoramus and coward like Bush is presiding over the liquidation of American hegemony.He, like GM, has no clue why other people do whatever it is they do.He has only to convince himself that he is better than the people who are at the receiving end of his imperial swagger.His contempt seems to know no boundaries.It is likely to be directed at hapless Iraqis just as much as at the people of New Orleans.
As his Iraqi venture breaks apart in disarray, he keeps clinging to his belief that he is still the colossus and a change of scenery like he is so eager to put himself in would change his fortunes. Like the hood ornaments at GM, the public is no longer buying his wares.
In the meantime, countries that Bush used to deride are stealing a march over us by devoting their meager resources for the betterment of their people’s lives rather than be swallowed by pride and wasteful expenditures on futile wars.In this way, GM’s demise, brought on by its hubris may well be a warning to our Caesar.But then this Caesar is incapable of understanding anything that is not written on his teleprompter.
The end of George’s excellent adventure need not be mourned.It may well mean a chance for the rebirth of this country and its true values.
