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D-Day near for GM
Toledo Blade, OH
Aug 1 2006
AUTOMOTIVE insiders mostly have disdain for investor Kirk Kerkorian's
efforts to force General Motors into an alliance with Nissan and
Renault. The old coot doesn't know what he is talking about, they say.
The conventional wisdom is that the turnaround plan set by GM's Rick
Wagoner needs more time. That might make sense, until you look at
the numbers.
This is a company that has been in so much trouble for so long that
Americans have become almost numb to the terrible shape it is in -and
how badly it has been managed.
Last week there were actually headlines that treated as good news
the fact that the shrinking auto maker lost only $3.2 billion in the
second quarter. This is a company, remember, that lost almost $11
billion last year, or almost a million dollars an hour.
Kirk Kerkorian, on the other hand, knows how to take risks that
somehow end up making money, not losing it.
He flew unarmed bombers across the Atlantic during World War II's
Battle of Britain for $1,000 a trip. The penniless son of refugees
from the Armenian Holocaust, Mr. Kerkorian then went on to make
billions building hotels and resorts in Las Vegas.
Whatever else you think of him, you have to have a touch of admiration
for a man vigorous and healthy enough that he is trying to gain
control of a major American corporation - at age 89.
Whether his proposed international alliance makes any sense, there
is little or no excuse for the state of GM's management, especially
given that the company went through a similar crisis in the early
1990s. That time, a desperate board eventually turned to Procter &
Gamble's John Smale, a one-time toothpaste salesman, to bail them out.
The present crisis is worse. In the second quarter alone, GM's world
market share went from 15.1 percent to 13.8 percent. In the United
States, its share of auto sales is almost in free fall.
Back in the 1960s, more than half of all cars sold in the country
were GM-made. Today, they are under 24 percent, and the Chinese are
on their way with another competitive threat.
When one looks at General Motors, it's hard to imagine that even a
bunch of former Soviet collective farm managers could have done a
worse job of positioning a major corporation for the future.
Kirk Kerkorian may not have all the answers, but this much is clear:
his track record is a lot better.
And at General Motors, something has got to give.
Toledo Blade, OH
Aug 1 2006
AUTOMOTIVE insiders mostly have disdain for investor Kirk Kerkorian's
efforts to force General Motors into an alliance with Nissan and
Renault. The old coot doesn't know what he is talking about, they say.
The conventional wisdom is that the turnaround plan set by GM's Rick
Wagoner needs more time. That might make sense, until you look at
the numbers.
This is a company that has been in so much trouble for so long that
Americans have become almost numb to the terrible shape it is in -and
how badly it has been managed.
Last week there were actually headlines that treated as good news
the fact that the shrinking auto maker lost only $3.2 billion in the
second quarter. This is a company, remember, that lost almost $11
billion last year, or almost a million dollars an hour.
Kirk Kerkorian, on the other hand, knows how to take risks that
somehow end up making money, not losing it.
He flew unarmed bombers across the Atlantic during World War II's
Battle of Britain for $1,000 a trip. The penniless son of refugees
from the Armenian Holocaust, Mr. Kerkorian then went on to make
billions building hotels and resorts in Las Vegas.
Whatever else you think of him, you have to have a touch of admiration
for a man vigorous and healthy enough that he is trying to gain
control of a major American corporation - at age 89.
Whether his proposed international alliance makes any sense, there
is little or no excuse for the state of GM's management, especially
given that the company went through a similar crisis in the early
1990s. That time, a desperate board eventually turned to Procter &
Gamble's John Smale, a one-time toothpaste salesman, to bail them out.
The present crisis is worse. In the second quarter alone, GM's world
market share went from 15.1 percent to 13.8 percent. In the United
States, its share of auto sales is almost in free fall.
Back in the 1960s, more than half of all cars sold in the country
were GM-made. Today, they are under 24 percent, and the Chinese are
on their way with another competitive threat.
When one looks at General Motors, it's hard to imagine that even a
bunch of former Soviet collective farm managers could have done a
worse job of positioning a major corporation for the future.
Kirk Kerkorian may not have all the answers, but this much is clear:
his track record is a lot better.
And at General Motors, something has got to give.