Page 86 - Motor Trend (May 2020)

NEWS I OPINION I GOSSIP I STUFF

Angus MacKenzie
The Big Picture

General Motors: The Incredible

Shrinking Automaker

aimler may have invented the automobile, and Ford inept leadership. It survived, thanks to an injection of
may have invented the automobile factory, but billions of dollars from the federal government that at
General Motors invented the modern automobile one stage saw some 60 percent of the company owned
company. When GM was founded in 1908, there by the U.S. taxpayer. And although GM paid back every k every
Dwere 253 automakers in the United States, all with cent it was obligated to pay to the Treasury, it has never never
entrepreneurs and engineers, dollar-men and dreamers, really recovered. In the decade since, the company that ny that
vying to make their fortunes with a technology that was was once the very definition of the power and strength rength
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t

going to change the world. and wealth of American capitalism has become the
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Henry Ford was the Bill Gates of the era, quick to incredible shrinking automaker.
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grasp the potential of democratizing automobility. But Last year GM sold 7.7 million vehicles worldwide,
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GM’s Alfred Sloan was in many ways the era’s Steve Jobs, less than the 8.4 million retailed in the recession-
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intuitively understanding that adding form to function weary year of 2010 and well down from the 10 million
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made the automobile more than mere transport, that it it sold in red-hot 2016. GM is now merely the world’s world’s
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could transform need into desire. fourth-largest automaker in terms of sales, well behind
GM didn’t just pioneer the automotive design studio. Volkswagen Group, Toyota, and the Renault–Nissan–issan–
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It also pioneered the electric self-starter and automatic Mitsubishi alliance. Part of that is because GM lost Opel’s
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transmission, two innovations that helped make the sales contribution when that company was sold to PSA
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automobile even more accessible. GM did the funda- Group in 2017, but there are deeper issues.
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mental scientific research that led to the development GM’s net revenues are little changed from a decade
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of the catalytic converter and the airbag. It ago—$137.2 billion versus $135.6 billion—
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—
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was experimenting with electric vehicles and though, to be fair, the lengthy United Auto-
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autonomous drive systems before Elon Musk mobile Workers strike last year is estimated
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was even born. It helped design and engineer the to have cost the company $2.6 billion. Net
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only car to have ever been driven on the moon. income has improved over the decade, up
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For almost 80 years, GM bestrode the auto- from $5.6 billion in 2010 to $6.6 billion now.
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motive landscape like a colossus, making and But it’s less than half the 2016 result, when
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selling more cars than any other automaker in GM’s global sales were 30 percent higher.
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the world. It held the top spot on the Fortune The recent announcement that GM is
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500 list for more than three decades, and when GM to shut down its Australian design, engineering, and
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CEO Charles “Engine Charlie” Wilson said in 1953 that sales operations in 2021—and retire the iconic Holden
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he thought what was good for the country was good for brand—continues the string of cutbacks, closures, and s, and
General Motors—and, more famously, vice versa—it was asset disposals over the past 10 years.
simply accepted as fact. GM bean counters can no doubt give chapter and verse
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e
No more. on why all this shrinkage makes good business sense; the
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GM crashed into bankruptcy on June 1, 2009, the fact that the company lost $20 billion over 20 years in
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Y
(
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global financial crisis dealing a mortal blow to a company Europe, for example, suggests it was time to quit. (Yet
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weakened by years of institutionalized arrogance and PSA’s Carlos Tavares managed to get the business to
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turn a profit a year after he took the helm, so you have
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to wonder what the problem really was.)
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But ponder this: Of the 7.7 million vehicles GM made
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e
last year, almost 84 percent were sold in North America
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and China. Once the automaker to the world, GM is now
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G
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almost entirely dependent on just two markets. And even General Motors
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once stood as an
in its home market, GM is slipping: In booming 2004,
ambitious leader
GM’s U.S. market share was 26 percent. Fifteen years in the automotive
later, it barely scrapes 18. And in China, GM’s sales fell landscape,
embodied by,
15 percent last year. among others,
GM largely has itself to blame, of course. But it’s still Harley Earl, shown
sad to see the easy confidence and vaulting ambition here with his
Firebird I, Firebird
that enabled Harley Earl’s rocket-age styling, Ed Cole’s II, and Firebird III.
small-block V-8, Zora Arkus-Duntov’s Corvette, and a But the GM that
enabled his kind of
thousand other exciting products and innovations that
iconic leadership
transformed the automotive age is no more. Q no longer exists.
86 MOTORTREND.COM MAY 2020