Daddy drove a ’59 Cadillac and it was the first of many he was to buy brand new, that nowadays classic with the CBS taillights. White over yellow, it was huge and powerful, grand and slightly ridiculous by today’s standards, but it represented General Motors at their Zenith.
At one time the world’s largest corporation, I guess my first dose of culture-shock came when I read that Google was worth more than GM. Google? A web search engine existing in cyberspace, worth more than an international corporation with hundreds of bricks-and-mortar plants, millions of cars rolling off those production lines and a presence in most countries of the world? Was this possible? Didn’t I just see a special-edition armored Cadillac limousine carrying our president to his inauguration? Surely I did and surely this national bragging right between Cadillac and Lincoln can’t seriously be at risk.
Charlie Wilson’s famous statement “What’s good for the country is good for General Motors, and vice versa” was once true and yet GM stock, the darling of coupon-clipping blue-haired little old ladies, is in the dumper and its bond rating just a notch above ‘junk.’ Is it possible that the net worth of this icon is now below that of Harley Davidson?
It is and that’s a fact.
The American automobile business never had to come from behind and that may have been its fatal flaw. The car and the lure of the open road were always American. GM’s current trauma is like finding that the cowboy has been reinvented and improved upon in Japan, then sent back to ride the American west. Like all industrial disaster scenarios, GM’s is complicated but that complication has simple roots and hubris in the executive suite is the key. We are the auto industry and we’ll run it as we damned please. My daddy bought his first new Cadillac as the initial Mercedes Benz imports hit the U.S. market, but daddy never gave an import a look. It was a Cadillac he was after, but I buried my daddy in 1965 and in many ways his death marked the beginning of the end for General Motors. Mother and dad drove Packards and Cadillacs and now they’re both dead, as is Packard and it’s anyone’s guess if Cadillac will see the end of the decade.
GM told the American car buyers what they wanted and America bought it . . . for a while . . . actually, quite a long while. But the Japanese asked. While GM kept grinding out big, profitable cars, the Japanese listened to the market and never stopped innovating, never let up on fit and finish and never looked back. Today, Toyota has the hottest hybrid electric-gas car in the industry and GM is still saying it can’t be done. My father-in-law called them ‘rice burners,’ but imports swept the American market, across all age groups.
GM has too many badges and too few customers. Oldsmobile is gone and Buick will probably follow unless Pontiac takes the fall in its place. GM’s precipitous descent to within an eyelash of junk-bond status has to have chilled the executives at Chrysler and Ford. America’s gold-standard industries are fading and it remains to be seen if this is emblematic of the sunset of American power and prestige. Our nation rebuilt the destroyed nations of the world after WWII with Marshall Plan funds and never drew a heavy breath. We keep telling ourselves and others that we’re still the most powerful nation on the face of the earth, but an internet search engine is worth more than our once-dominant industrial behemoth and a discount retailer is America’s current entry as largest corporation in the world.
Does this portend the end of the beginning or the beginning of the end?