The incredible shrinking GM.
I guess I've written a half-dozen times that the only hope for GM is to break it up. Still, this is a sad day for "GM people" like me. Such brand loyalty pretty much disappeared in the import era. (After four GM cars, I drive a German make.) But friends of my age, 51, can remember growing up in Ford, GM or Chrysler households. (Kids with quirky parents first saw the world in motion through the windows of an American Motors product.)
Click above to hear Fritz Henderson, CEO of GM only a few weeks since longtime helmsman Rick Wagoner was forced out by the White House, describe with as much enthusiasm as he can muster the dismantling of his lifetime employer. I know, I know, it's only business. But if you grew up loving cars - aspired to owning a Cadillac, as I did - this is a moment akin to the last episode of "M*A*S*H*" or "Frasier."
Because of the larger context - an unprecedented global economic slump and financial crisis - this incredible humbling of a century-old industrial icon, the largest commercial enterprise in the world for more than half a century, is oddly not resonating among business leaders. The Detroit Three have been in decline for so long that most CEOs in other industries are almost oblivious to the sudden undoing of the legacies of GM's William Durant and Alfred Sloan, and of Walter Chrysler. (Ford isn't the picture of health, either; if industry sales don't recover by early next year, it too will bring a begging bowl to Congress.)
But the obvious lesson is apparent, just the same. There's no God-given right for any enterprise to last forever. Someday, sheer size will do you in, as your enormous firm becomes unknowable and unmanageable. That's why the best days of Wal-Mart and Microsoft are behind them. Size makes you fat and lazy. And a target. When Toyota first appeared on these shores, it wasn't that firm's ambition to someday rival Studebaker in volume. From the beginning, Toyota and Honda, and before that Volkswagen, had GM in their sights. GM had been so big, so successful, so powerful for so long - it was the one to emulate and to beat.
So, yes, marvel that P&G is still thriving, keeping complacency at bay, 172 years after its founding in Cincinnati. And that the Bay lingers, no matter how diminished and in desultory fashion, 339 years after it was launched. Noting the remarkably short half-life of tech firms, Intel's Andy Grove wrote a book whose title became the mantra of Silicon Valley, Only The Paranoid Survive. Actually, the maxim applies to all business. Take a day off, smell the roses - and an unheard-of rival will bite you in the ass.
Note: For the purposes of this blog, the inception of the Great Recession in the U.S., the epicentre of the crisis, is taken as the start date for the global slump. The U.S. has been in recession since December 2007.