Little did Durant know when he founded GM some 100+ years ago that this would happen. Or maybe he did. Durant was the guy who acquired many of GM's brands and a few years later got fired from the board. He then went to work for a new company called Chevrolet. Three years later, GM wanted him back and when he agreed, he persuaded GM to buy a stake in his previous company.
Sloan took over from Durant and came up with the key marketing strategy that allowed GM to have half the market by the mid 50's: a car for every income.
GM at one point was so large, that the second biggest company was less than half its size. Today, the difference in sales between ExxonMobil and WalMart is less than 20%.
As Obama Motors takes over today, we will own 60%, the UAW 17.5%, bond holders 10-25% and the Canadian taxpayers the rest. Obama will address the nation today while we are all at work (or trying to find work). Perhaps the weekend didn't work out for Obama as he wanted to watch the Wings destroy the Penguins.
Then again, Obama hasn't make it to Michigan since he took over the Oval office. But he sure has been busy dealing with Michigan's future. And here's the hope: The new GM can rebuild and claim its share of the auto game and keep its logo ablaze atop of the RenCen.
It's a crap shoot for sure. 21,000 more workers gone today. 11 more plants mothballed and 3 idled. But like the poker play with one chip left, anything is possible. We need a lot of "double-ups" and we need them quickly and we them badly. While restaurants and bars are doing fine, salons and spas are struggling; three closed last week alone in Metro Detroit and those are the ones we know about.
What's it going to take for GM to double-up? A product that people want to buy. A product that appeals to the 21-34 age group. The Volt? Perhaps. But until Detroit gets in touch with the 21-34 year olds, there is no future.
Perhaps what GM really needs is a new brand. Word on the street is that the GM name could disappear. Perhaps rightfully so: General Motors is no longer relevant in an era of customization and Sloan's strategy has long been dead. How about CM?
The new Custom Motors only makes cars to order. No inventory, no cars on dealer lots, no obsolete crap to discount. Every buyer places an order exactly for the features wanted and the custom factory makes cars ready to go in less than a week. Models update quarterly.
Obama Motors will appease his voters but it certainly will not appease his buyers. Let's see what the new era brings us.
Happy Monday!
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