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GM and Chrysler deserve nothing

Here's the thing about the latest auto industry bailout pleas: only under extreme duress are General Motors and Chrysler are making changes to their business plans. And only under the guise of getting more cash are they coming up with them.

I don't want to see large-scale industrial failure any more than the next guy. But these companies do not deserve Federal assistance. They have proven for decades that their businesses are myopic and wholly resistant to change. While the rest of the world's automakers adapted and excelled, Detroit was relying on focus groups, creating redundant models, ignoring macroeconomic and environmental trends, and overpaying employees.

The net result is companies that need overhauls and closures. Market forces should create the necessary change. Another $14 billion will only continue the status quo, which is akin to giving a drug addict just a bit more of his drugs in the hope he'll figure out how to get clean if he's given just a little more time. It won't work.

GM in particular has busted its model by overdoing just about everything, starting with a proliferation of models. Take a look at model lineups in 1959, during its heyday:

  • Chevrolet: 8 including trucks (Bel Air, Biscayne, Impala, Corvette, Kingswood, El Camino, Suburban, Parkwood)
  • Pontiac: 3 (Bonneville, Catalina, star Chief)
  • Buick: 2 (Electra, Invicta)
  • Cadillac: 3 (DeVille, Eldorado, Fleetwood)

That's 16 car models in total across their four major brands. Today Chevy has 15 models, Pontiac 7, Cadillac 6 and Buick 3--a total of 31 car lines, nearly twice as many models for less than half the market share. And that's excluding Saturn and GMC, which heavily rebrand GM platforms for even more product lines. You'd think over the past, say, 15 years GM would realize it's doing things wrong and try some fresh tactics. None ever came.

So add me to the list of "let 'em fail" naysayers. I'd like to see Detroit's stalwarts continue to make cars, but only compelling concepts with strong identities that would actually have me consider buying one.

The potential ripple effects are frightening, but more bailout money will only delay the inevitable. Better to swallow hard and work on a Plan B.


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