GM Had Swine Flu

In the beginning there was nothing. Then GM was founded by William Durant in 1902. The 1907 stock market panic caused financial distress for smaller companies which built car parts as well as car accessories, and which were then bought by Durant. In 1908 Durant combined these companies into one large entity thus creating GM. In 1910GM almost went into bankruptcy and Durant was forced out. But by 1911 the company was coming out of the crisis mostly due to international sales of its cars.

The biggest car company in the world had many more ups and downs over the next forty years but got stronger as each decade past. It managed to survive reasonably well during The Great Depression and in 1941 GM market share grew to 41 percent. Of course, in 1942 civilian auto production was halted and the plants turned to the war effort. By the mid 1950s it became the first billion dollar company in the world, and in 1953 Charles Wilson, then President of General Motors, famously told the U.S. Congress that as “GM goes so goes the nation and vice versa.” By 1979 GM employed 618,365 people, thus becoming the largest private employer in the country. In 1985 GM made four billion, acquired Hughes Aircraft Co. for five billion, and formed its new Saturn Corp. subsidiary.

But GM missed a big opportunity to perfect a number of fuel saving models that could have been in every showroom in America. Instead, GM joined with the big oil producing countries to make America more dependent on foreign oil by producing SUVs, Hummers, and other giant gas guzzlers.

Greed was now king and the CEOs, the CFOs and other Execs began to view the company as a huge cash cow for their own personal wealth, and nothing else really mattered. In their quest for riches, they turned the company against the American car buyer big time beginning around 1970. A greedy policy known as “planned obsolescence” was instituted where parts were designed to fail after so many years, and one was lucky to get 90,000 miles on the motor.

Then they turned GM against its workers for bigger profits and, by default, even bigger compensation packages for the top executives. Plants were shuttered and thousands of good paying middle class jobs were shipped to Mexico. Those workers who lost their jobs, and their extended families and friends, had also been GM car buyers.

In 1998, the combined market share of GM, Ford and Chrysler in North America was 70 percent. Seven years later, it was down to about 50 percent. Toyota is now the largest auto maker in the world. The Camry is America’s best-selling car and the Lexus is America’s most popular luxury brand. Automotive News, the industry bible, no longer refers to the “Big Three.” It now calls them “The Detroit Three”.
By betraying both the American Consumer and the American Auto Worker, and by default America itself, GM created its own path to self destruction.

Filmmaker Michael Moore said just recently "It is a sad irony that the company which invented ‘planned obsolescence ‘- the decision to build cars that would fall apart after a few years so that the customer would then have to buy a new one -- has now made itself obsolete." Moore’s 1989 documentary movie "Roger & Me" predicted the demise of General Motors, which collapsed he said, “because of company ineptitude and disregard for its workers”.

Meanwhile, new king of the road Toyota prospered to the stratosphere by treating its people well and with respect, then insisting that quality should always trump quantity. Of course, Toyota execs haven’t selfishly bled their company dry either.