Howes: So long Generous Motors

Feb 9, 2019
Originally published on February 11, 2019 10:58 am

Generous Motors is officially gone.

The automaker’s plan to idle and try to close five North American plants is hurtling toward a Titanic battle over the direction of Detroit’s auto industry.

Two sides with totally opposed views of the market today where technology is heading and how it will affect jobs and investment will play out this year  the most consequential since the auto bankruptcies a decade ago.

Plant closings beget angst and distress in plant towns across the Midwest. They signal decline, an embrace of reality, and sometimes both. They’re disruptive and demoralizing. They threaten to undermine small businesses and property values. And that’s why they enrage politicians scare communities and draw intense media attention even when times are tough.

But when they aren’t? It’s worse. Here’s a company like General Motors booking pre-tax profits of roughly one billion dollars a month in the United States – and the company expects more of the same this year thanks to launches of big, profit-rich pickups and SUVs.

None of it supports a lament of corporate impoverishment.

You see, the old rules no longer apply: this industry is changing at blinding speed. Record profit margins and historically high sales rates are supposed to be great news in Detroit. But they’re not so much – not now. The race is on with Silicon Valley for advantage in ride-sharing, in electrification, in the self-driving vehicles that promise to change the way this town’s done business for 100 years.

Where are the unions representing autoworkers here and in Canada or the politicians in Lansing and Washington demanding that GM reverse its plant closings? Are they making any effort to understand the implications of the looming transformation the tech invasion of the industry and what it really means for their members and the people they represent?

Naw, it’s easier to fight the last war with gripes about product allocations, corporate greed and GM’s obligation to American taxpayers and the country 10 years after its bankruptcy and bailout. Got news for you: GM’s brass has moved on, even if the rest of America hasn’t.

Welcome to the new GM paradigm. Responsible stewardship of the taxpayers’ investment 10 years on means reckoning with reality and managing for the future not nursing nostalgia for the ol’ Motor City.

This is a transition alright. And it’s a brutal one at that. A decade after GM and Fiat Chrysler emerged from bankruptcy and Ford Motor managed to escape its own Chapter 11 the automakers are facing change they often can’t control. They must manage it – or die.

GM CEO Mary Barra puts it simply. Her company is trying to transform from one that was,“all things to all people” into one that is strategic, fast and disciplined.

Delivering those qualities, consistently, isn’t usually associated with Detroit. But it’s the price to stay in the game or to lose and disappear.

Daniel Howes is a columnist at The Detroit News. Views expressed in his essays are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.

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