Professor Elam

I just read another insightful column by Jerry Flint about  GM’s market share loss.
Please click and read the column. Mr. Flint does an admirable job of using statistics that anyone can understand, look at the waterfall decline in market share.  What was the GM Board thinking?  Yet the Board did not take action to remedy the situation.  As Mr. Flint says, nothing is going to change until the market share stops going down.

I was a Federal Bankruptcy Trustee for five years.  I observed the same thing.  People thought that small changes would make everything right again-it won’t.  It is like Jimmy Carter wearing a sweater in the White House amidst the second oil embargo.  One can see the same thing in the worst of all situations, volunteer boards.  Volunteers never have a stake in the opeartion, if it fails their lives are unaffected. This cannot be tolerated. Yet Presidents line Boards with folks friendly to them to make sure just such opposition does not emerge.   Much the same can be said of the GM board.  As market share declined, they continued to earn Director Fees and no doubt met in the poshest of places. 

Another example would be the current plight of the Republican party.  Republican attack dog Ann Coulter observed that Republicans lost about the average number of seats in this last sixth years Presidency election.  True Ann, but they also lost control of the House, Senate, a majority of governorships, and hundreds of state house seats.  In short, a tidal wave turn occurred, not just a loss of 30 some odd House and 6 Seante seats.  I am not trying to get us off on politics but  this perfectly illustrates how one can either use the same statistics to do little or nothing, or sound the alarm for change.  Back to autos, I suspect Jerry Flint is right, that both Ford and GM will end up permanently smaller.  Ford wil probably end up as a light truck manufacturer the way things are going.

I started this post with the movie poster from Conan the Barbarian.  A movie star in what used to be striclty B movie territory, muscle men battling in an imaginary landscape, has become the most successful turn around politician on the scene.  After a rout that defeated all his ballot initiatives and being given up for dead, Arnold fired staff, hired new ones,  did a 180 on his strategy, and left his Dem opponent wondering what happened.  Contrast this with Bush who waited until after the election to remove Rumsfeld-in fact he did so the next day after denying he would. Even Chuck Schumer stated that if Bush had done that three months earlier, the election might have been totally different.

Bottom line-whether it is Ford, GM, or the White House, big developments call for big changes.  Gradualism will take you the way of Packard and Studebaker, not Toyota or BMW. Yet rare is the individual who in the face of declining fortunes who is willing to stand up and make radical change.  We will be visiting other examples here on the blog of such action, think Lech Walesa in Poland.

DLE