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Steeped in GM: My Fascination with a Fallen Icon

I just got bumped from my 7:06 am appearance on the Early Show about GM. I'm so steeped in the GM bankruptcy that I didn't even know about the breaking news story that replaced me: a Pennsylvania mother staged a fake kidnapping and went to Disney to celebrate. Or something like that.

I guess this isn't a big story for my morning media buffet of The New York Times, The Wall Street Journal, The Financial Times and Bloomberg. "Maybe you should expand your horizons," noted one of the producers. I didn't have time to explain my fascination with the auto industry. It's not just the impending bankruptcy of GM. There's something so compelling about the fall of a 100-year old brand that helped define this country.

In must be in my blood. My father told me "Your great-grandfather LOVED General Motors. He only bought GM cars and his largest stock position was in GM...he'd be sick about this bankruptcy." It wasn't just my great-grandfather--there were millions who adored their US-made cars and the companies that built them. Just listen to the great Dinah Shore croon about Chevrolet's--it's practically like the national anthem!

But the auto industry no longer defines American capitalism. In the early sixties, GM accounted for over half of all car sales in this country. Today, its market share has dropped to under 20%. And when GM files for bankruptcy on Monday, it will be removed from the Dow Jones Industrial Average and replaced by a soon-to-named company. I'm lobbying for Google, but that's unlikely.

As we say to goodbye to ol' GM, it's worth noting the winners and losers in this fiasco (this was the topic of my bumped segment).


  • Institutional bondholders: does anyone else have a sneaking suspicion that some of the unsecured bondholders are going to make money in this transaction?
  • Foreign car makers: Toyota and Honda face an injured opponent and will gain market share.
  • Lawyers: Bankruptcy lawyers are the new black in corporate firms. They waited through a long expansion and will now be rewarded with big fees.
  • Workers/Suppliers who will be downsized: GM plans to cut over 20,000 jobs in an effort to reduce its workforce from 60,000 to 38,000 by 2010. Suppliers from Alaska to Florida could be impacted, as seen with the Visteon bankruptcy filing.
  • Unions: The UAW concessions mean that workers will give up some benefits. The decision was obvious: better to have a job with limited benefits than no job at all. More significantly, unions have suffered a permanent loss of power.
  • US taxpayers: Fellow shareholders, we now own over 70% of beleaguered company that faces immense competition in a shrinking market. If the "new GM" can't survive, we can kiss our billions goodbye.
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