losses were staggering. Apart from the human tragedy, which is substantial,
some surprising interpretation of the dilemmas the company faces was presented
at the press conference.
The financial drain on General Motors is staggering. Management had to do something. The tragedy, of course, is the loss of 25,000 jobs. That’s a lot of lives changed, many of them for the worse. The company’s claim that health care costs are significant in its competitive decline is also a significant concern. Hopefully, GM won’t try to bail on its health care as United Airlines bailed on its pension promises. If GM cuts back on health benefits, it will open the door for others to follow. We are at risk of moving backward in creating social policies responsive to everyone
These are substantial and real concerns. But tonight’s national television news mentioned two other dynamics that were significant for other reasons. They reveal strategic issues that mass market organizations must consider today.
The first was a statement that the auto industry has changed radically in the past five years. The manufacture and marketing of automobiles changed so rapidly in five years that General Motors has fallen dangerously behind its competitors.
One of the most important issues facing mass organizations formed at the turn of the last century is adapting to new realities, customer demands, marketing, manufacture, accounting, a whole slew of challenges. Managers and organizational structure are not as flexible as required in a rapidly changing marketplace. CEO Rick Wagoner’s remarks state the issues clearly; “crisper product execution, shorter life cycles, better quality, lower cost.”
I reviewed the book, The Support Economy a while back. In it, Shoshana Zuboff and James Maxmin analyze the decline of mass organizations such as GM. They contend that the corporate model of managerial capitalism is not serving the needs of customers today.
A second intriguing point made in tonight’s coverage is that GM is in the arts and entertainment “business.” This claim is worth a book. It’s far too multi-faceted for a short blog entry. A basic manufacturing giant is re-defining its brand image to incorporate a new definition–arts and entertainment. ABC’s Ann Compton reported this remark was made by a GM executive. It’s more than a throw-away line.
In this society material goods are representational. They represent something else, automobiles especially. Now, GM is saying it’s art and entertainment. That’s quite a difference from basic transportation.
There is a wealth of cultural ore to be mined in this statement. Undoubtedly there is more to come.