Jerry Flint writes in his Forbes Backstreet Driver column that GM’s problems are worse than they appear, and they appear to be pretty darn bad. Mr. Flint focuses on GM’s tactical decisions, including a suggestion that the Pontiac and Buick brands might be phased out if sales do not improve. Mr. Flint sums up the news coming out of GM’s offices these days in the following manner:
Every day there seems to be more bad news from General Motors. It’s like a parody of BBC news in the early days of World War II.
“And now, news of fresh disaster.”
Meanwhile, the Washington Post’s Steve Pearlstein chimes in with this article in which he observes that all of the Big Three are in big trouble:
[T]the Big Three today are in roughly the same pickle as the integrated steel mills back in the early 1980s, or the full-service airlines around 1990: Their choice . . . is either to make radical changes in their business model and cost structures or suffer a long, slow death.
Hat tip to Craig Newmark for the links to these articles.
About two years ago I caught a speech by a Gartner analyst that essentially said the Big Three were living on borrowed time — at least in their current configuration — and that they needed to figure out what they were best at and concentrate on it.
Flint picks up on this in his piece — and it’s GM’s dealer and service network that makes them so valuable. The speaker from Gartner suggested strongly that the Big Three would be reduced to assembling vehicles (he felt that most of the drive trains of all American cars would eventually be manufactured by Honda or Toyota) and beefing up the dealer network in order to provide a serious value add in terms of service and repair.