Motor City Challenge: “Failure Is Not An Option”
Motor City Challenge: “Failure Is Not An Option”
GM Entering Bankruptcy and Chrysler Poised to Exit
Reading the Wall Street Journal or watching the nightly news makes it seem inevitable that GM will enter bankruptcy soon. This is not an unexpected event as reported in the Tribune over the past months. Chrysler appears to be on the verge of coming out of bankruptcy, and this is one fast trip in and out! GM is too complex for a speedy journey like Chrysler.
Deadly Symbolic and Deadly Serious
In some ways this is symbolic and in some ways it is deadly serious. Looking at the deadly serious side GM absolutely must be re-cast properly for the good of the US and all of North America if you take the proposition that GM is worth saving and the Tribune takes that position. However, re-casting GM is not simple from the business plan side of the equation and it is imperative that the new business plan must “hold water” otherwise the entire Government assistance plan is flawed. The New GM absolutely must have a viable business plan.
Chrysler will be looking to Fiat for engineering and product development. This will happen quickly and if gas prices continue to rise, and they have gone up significantly in the past 6 months, then the Fiat product line will be embraced by economy and sport minded consumers. Fiat has some great cars in Europe, such as the stunning 500, and these cars will be successful with higher gas prices. If oil gets back to $75 per barrel then Chrysler-Fiat will have a reasonable playing field for success.
Ford is Doing About Everything Right
As we have said before in the Tribune, Ford is America’s Premiere Car Company. All Ford really needs is for the economy to bounce back and auto sales to pick up. Also, Ford has some great product in the pipeline including their Eco Boost high performance engines. Lots of additional power from the smaller powerplants means better performance and continued good fuel economy.
Brutal Media and Press
GM is going to be the target of some very brutal press and media. Crystal Ball Gazing would likely say that after the bad press there will be some good press. With so much Government money and business leadership coming to GM then the ultimate result will likely be a successful re-birth of GM.
“Failure Is Not An Option”
Restructuring GM is a capitalistic risk that requires a positive outcome. To quote NASA “Failure Is Not An Option”.
