Last Updated Apr 29, 2009 2:26 PM EDT
CEO Fritz Henderson said this about the plan, "I'm a believer in dealing with reality."
Well it's about time.
All the above will leave GM a far leaner, meaner, and deleveraged company with at least a chance of someday being profitable. It also leaves the Detroit car-maker with four brands: Buick, Cadillac, Chevrolet, and GMC. And that leaves me with a bunch of questions.
Why didn't GM's management come up with a serious restructuring plan like this a long, long time ago? I mean, how much do shareholders have to pay these days to get a CEO who actually deals with reality? And what kind of world was the previous management dealing with? Fantasy? Do they even teach that at Harvard Business School: Fantasy Management 101?
And why does GM even need four brands? If they're concerned about losing customers loyal to a specific brand, isn't it a bit late for that? Multiple brands are expensive, confusing, and defocusing. Most carmakers have just one. A few, like Toyota, Nissan, Honda, and Ford have two - a primary and a luxury brand. And that's all GM needs, Chevrolet and Cadillac.
Lastly, and this is just me on my soap box, but who teaches managers that leverage has no limits? It didn't work for GM, WorldCom, or Spectrum Brands (the Rayovac company); it's not working for California; and it won't work for the U.S. government, either.