Wednesday, December 2, 2009

Resignation of GM CEO

The latest casualty in the continuing saga of General Motor's attempts to find its way in this recession plagued automotive industry is CEO, Fritz Henderson.  By all accounts, he did the right things to restructure GM, change its culture, and improve product performance in the marketplace.  But apparently this was not enough or fast enough for the board, which now represents the government as a major stockholder. The firing illustrates the difficulty of the task, particularly in a tightening consumer market.  There is simply no room to manuever.  The bottom line: it may have been more efficient, and humane to let GM die.

GM's talented autoworkers and executives could have been deployed by the more effective foreign automakers domiciled in the U.S.  Unleashed from the constraints of foreign content laws, pressures of competing with a subsidized giant, recalcitrant unions, and byzantine distribution systems, these producers could have ushered in the renaissance of the U.S. automotive industry.  The American people's love affair with the car will see to that.  Unfortunately, what we have is a car wreck in slow motion, financed by the government through we, the taxpayer.

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