Thursday, November 13, 2008

Time asks: Is GM worth Saving?, which I think is a leading headline. Like "Aren't these puppies cute?", it leads the reader to a conclusion before they begin to read.

Where's the headline like this: "Is Tesla, the innovative electric car maker worth saving?" No where to be found on there. GM has for years had tons of cash and potential. They, along with other US automakers, have had opportunities to focus upon continuous improvement of their products. They have potential -- but it's going to be a bumpy road for them.

Handing them cash to fix the problem may sound like a great idea -- after some banking bail-outs by the government, why not major automakers?

This is the "logic" being applied.

Anyone that knows me personally knows that I've not been a huge fan of GM products. I've owned exactly one GM product in my life -- a 1974 Nova that my wife had when we got married. I didn't purchase the car. It never let me down but when I sold it there was an amazing list of things that had broken on the car.

  • The interior lighting.
  • The door latches inside the car.
  • The hinges.
  • The speedometer.
  • One of the rear leaf springs.
  • The fuel gauge.
  • The body (lots of rust).
  • The rear brakes, including the parking brake.
  • The ventilation system.
And that's the short list. I joked at the time that the only thing that worked was the engine, transmission and rear end. It was a road hazzard. At the time I lived in Niles Ohio, the epicenter of General Motors loyal buyer-base. Surrounded by Lordstown employees (a plant that made cars) and Packard Employees (At the time, the place where the wiring for most GM cars was manufactured), I had an easy time unloading it for a few hundred bucks. Some kid came along with stars in his eyes and drove off happily in the thing.

And, short of a Corvette, the GTO and the new Camaro, there hasn't been much they've made that even came near drawing my attention. They talk a lot about making electric vehicles (and did at one time pilot a few in California), but honestly for the size of the company and the amount of engineering talent on tap, the sad fact is that they haven't been all that innovative.

Now we're talking about cutting them a check. For what? A reward for not being innovative? That's my call.

We're starting to find more and more reasons to reward executives for a lack of sound leadership (that's my concern) by doing things like this. And I think the long-term health of our economy is being jeopardized by actions like this.

Of course, it's going to take some serious examples of why bailouts are bad for the health of the country before anyone will totally understand this -- honestly I think we're (America) being too protective of things like GM and as a country we should be more protective of new innovative things. Tesla, for example, is far harder to get going, and in the long run, far more likely to truly be innovative.

What we're experiencing is the antithesis to the dot com era -- instead of a lot of people hyping stuff that will never pay off and sucking down massive amounts of VC, we're seeing the government putting things that are failing on life support. Wild speculation here: Both ventures, despite living at opposite ends of the funding, political and lifecycle spectrum, are huge wastes of capital.

Will GM survive? Why not let the market decide that one?

Let's hope I'm wrong about the cash, but experience tells me otherwise.

1 comment:

Anonymous said...

The worst is that these thieves were already given money by the government durning the Clinton presidency to develope a deisel electric hybrid. Their answer, "can't be done." If it weren't for the fact that there would be hundreds of thousands of people without jobs, these companies have no right to be saved.