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These are likely the final days of GM as we know it today. Immense structural changes are going on in the global auto industry right now (the fundamental transition of the auto industry , Auto Industry in Transition II , Auto industry in transition III), mergers, acquisitions are changing the game for the remaining competitors while others are going out of business. GM won’t go out of business, that’s for sure. But GM as we know it today is unable to survive on its own.

There are heated discussions going on on whether GM should go into bankruptcy or try to restructure with government help.

In my opinion, a court-supervised bankruptcy is the better choice for GM as well as for America. Drastic cost-cutting measures won’t be sufficient to get the auto giant back on its own feet again.

What weakens GM the most at the moment is its legacy: a huge amount of debt, high labor costs, poor & costly management decisions, the UAW, and shortcomings as regards quality and technological innovations.

Nevertheless, General Motors can thrive after restructuring, arise like the phoenix from the ashes. Although GM rather resembles a dying dinosaur than a dying phoenix at the moment.

The automaker’s best hopes for the future are the semi-electric Chevrolet Volt (http://detnews.com/article/20090518/OPINION03/905180399/1361/GM-hopes-Chevy-Volt-electrifies-White-House) and Shanghai GM (GM China: the crown jewel in General Motor’s global operations), the company’s thriving China business.

Chevrolet Volt semi-electric car at the North American International Auto Show 2009

Here you can read my ideas on how the restructuring should be carried out:

How to save the American auto industry? No time for baby steps!

This entry was posted on Saturday, May 23rd, 2009 at 4:52 PM and is filed under Electric Cars & Auto Industry, myVIEW. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.