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GM's Bankruptcy And Flawed White House Thinking

It's the typical story "in these uncertain times." You have a big issue that is tearing up the wires and you look for an angle that is inspiring.

Enter the New York Times with "The 31-Year-Old in Charge of Dismantling G.M." Here's the young, dynamic guy, fresh from the grad school ranks, (he hasn't even graduated yet) who's making a difference in the biggest bankruptcy in history. Mr. Brian Deese:HarvardYale man. He is another symbol of youth and vitality that typifies the Obama White House. He's the perfect face to personify the new direction for both GM and our country.

Only one troubling thing for your intrepid marketing podcast host and keeper of all things BeanCast: I can't believe anyone could read this article and not think with incredulity, "This whole bankruptcy was pushed through because an inexperience grad student, with no political experience, thought it would be a good idea?!?"

It Just Sounds Like Arrogance

Now I don't doubt that he's a smart and savvy guy who grasps situations unusually well. But I'm troubled by this quote from the article: "Every time Mr. Deese ran the numbers on G.M. and 

Chrysler

, he came back with the now-obvious conclusion that neither was a viable business, and that their plans to revive themselves did not address the erosion of their revenues."

This is simply a chicken or the egg argument! Part of GM's problem, in particular, was lack of consumer confidence. And when a popular administration waffles in their own confidence and starts pushing for bankruptcy, it essentially ties the hands of the company in question. While there's no doubt that there were no assurances that the GM plan would work, to say it was not "a viable business option," strays a little too close to arrogance for my tastes.

What would have happened if we hadn't made such a big fuss about bailout, and did for the auto makers what we did for the banks? The banks seem to be recovering more quickly aren't they? Sure, we grumbled about the money and insolence, but it worked. Who can say now what would have happened if we hadn't drug out Detroit's failings for so many months, trashing their reputation in the process? All I know is Rick Wagoner (the now deposed GM chief) knew a lot more about cars than Mr. Deese does.

Destroying Confidence

I'm fairly familiar with the internal situation at GM through some contacts I have. And I can tell you that the entire company, though scared, believed they could make it. They believed in the leadership of Rick Wagoner and they believed in their plan. But both were stripped away, along with their own confidence by this government led bankruptcy. And now to find out it was largely the result of one inexperienced man's urging is just plain insulting.

Again, no offense to Mr. Deese. I would probably like him very much. I even think that now he has inspired two bankruptcies to come into play, both will turn out well. (We have no choice but for them to turn out well.) I just question whether both were as necessary as he believed. And I definitely think that this is a story that the White House would have done better to leave untold.

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