What to do with GM?

June 3, 2009

Now that we, the people, own GM – what should we do with it?

As the new stewards of a once-crucial part of the national economy, it seems to me that we owe it to ourselves to act like self-interested business owners. That means making information-driven choices. If the previous owners of the business (e.g. shareholders, and the corporate board) had made prudent decisions, they would still be the owners; now it’s our turn – can we do better?

We have to ask ourselves: In the new market, what is the best way to deploy our resources to ensure that our business thrives? The answer may not resemble the status quo. Michael Moore argues for continued manufacturing, but of mass transit solutions (buses, trains) in the long term, and “greener” cars in the near term.

What his vision lacks is a connection to the larger system: production of buses and trains, absent parallel funding of the rights-of-way and other infrastructure to make them usable, would doom our business to much the same fate as the previous incarnation of GM: producer of great quantities of unwanted vehicles.

Moore tries to patch that hole with hybrid and electric cars, but that only gets our business into competition with Toyota, Honda, Ford and others with a huge lead in those areas.

So, I argue there’s a different path: let’s build and sell complete transportation systems. We have the engineering and manufacturing capabilities, let’s put them to a slightly different use than designing and selling individual cars, and instead develop the enabling infrastructure ourselves.

We’ll sell turn-key solutions, and probably at a bargain price, because future sales of the rolling stock and maintenance items will provide a long tail of income.

The solutions we provide should be carefully thought out to meet the specific needs of our customers, but always with the future firmly in mind.

What to do with GM? - June 3, 2009 - chad r. frost