Tuesday, April 04, 2006

Too Big to Fail? 

The continued slide of General Motors is a reminder that no company is too big to fail, no matter how grand it is or was. Shelley's poem, Ozymandias, rings in memory when such failures occur.

GM is an iconic company, a symbol of American manufacturing and marketing might, even more than Ford. Both are plummeting, and Detroit will never be the same again. Being a PR person, I wonder how one positions a business at times like this. Optimism is pointing to good outcomes of Chapter 11 rather than liquidation. The union won't accept many more cutbacks without kicking and screaming and possibly, a ruinous strike. The salaried workforce is being fired in droves. Sales continue to decline to the real market share rather than the inflated share driven by constant incentives.

I suppose the PR staff at GM maintains faith that the company will survive, although it will be smaller and less influential. But, going to work each day can't be fun unless one likes crisis communications. A further consideration for the PR practitioner is where to go, if he or she did leave. GM's troubles are radiating through the town and auto industry.

Six years ago the same collapse happened in Silicon Valley. The Valley survived although in a different shape than it was. General Motors is facing its moment of economic truth. The outcome will be interesting, no matter what occurs.

Putting the best spin on the situation, this may be a wake up call for the U.S. auto industry and maybe for the auto industry globally. You have to make better cars that get better mileage whether they're speedy or not. You have to run a business in the interest of the consumer's long-term needs, not the company's short-term profits. And unions can't call the shots. That's like having the soldiers tell the generals how to run a war. GM has only itself to blame. Dig yourself out of the hole, people, if for no other reason than America needs you. Do the right thing for the right reasons. Stop the bleeding and greed.

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