1.31.2007

How the World Changes After GM Falls

Forbes automotive columnist Jerry Flint has taken a valuable step in the never-ending discussion of the woes of General Motors. He has gone beyond the debate over what GM can do to fix itself, focusing instead on what happens after GM loses the number one spot to Toyota.


            Declaring that “The General Motors era is over,” Flint suggests that the drop to number two will be permanent, or at least long-term.


            “At first GM will try to prove that it hasn't lost. We call that denial,” Flint writes. “GM people will come up with new cars that they dream will retake the leadership. I call that desperation.”


            I believe Flint is correct. The prime reason, as Kevin Meyer has aptly pointed out in the Evolving Excellence blog, is that GM remains foolishly focused on being on top rather than on being profitable.


            Flint argues that the psychological effects of GM’s fall to second place will be enormous. He draws an analogy to the 1920s, when GM stole the top spot from Ford. For too many years afterward, Ford remained obsessed with regaining its lost glory, even adopting a “Beat GM” motto in the 1950s.


It would be a mistake for GM to do something similar. But maybe the need to return to profitability will ultimately shift focus away from the obsession with market share.


Perhaps a more interesting question is: What will GM’s fall from the top mean for the lean movement? I’m not sure whether it will make a difference, but it might.


The business world is already obsessed with how Toyota does what it does. The abundance of books on the topic – many of which we publish – is evidence of that. So perhaps that obsession won’t change much once Toyota achieves what everyone knows it will.


Then again, a lot of people who only pay limited attention to Toyota and lean might begin to wake up. Flint notes that after it falls to number two, GM will not be under such a bright spotlight anymore. As he puts it, “People will stop blaming General Motors for everything that goes wrong in the world.” The spotlight on Toyota will brighten by a few notches. That can only be good for the push to become lean.


Perhaps Flint’s most surprising suggestion is that Toyota won’t reign as long as GM did.


“GM was on top for three-quarters of a century, and that's impressive. Toyota won't do that. The world moves faster now. In 15 years maybe the Koreans (Hyundai) or the Chinese (Shanghai Auto) will overtake it,” he predicts.


Is he right or wrong on that point? Let us know what you think.


 

1 comment:

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