GM is going to cost the American taxpayer 10 billion dollars and still be in same boat it was in six years ago.

I was reading the other day about what cars are still selling for GM. Turns out it’s Cadillac’s, big GMC trucks, the new Camaros, and ultra-high performance and specialty Corvettes. In some models, they are getting over sticker for these cars.

GM
General Motors 2012 Trans Am that was never made except as a one-off

Now, to hear the Administration tell it, you would think these were the cars that put GM out of business. They have emphasized the manufacture of ‘green’ cars such as the Chevy ‘Volt’ and econoboxes in the new GM lineup. They are going to try and compete with the Japanese and Koreans in making cheap cars still using that thirty dollar an hour union labor here in the US. The program has been a loser for GM, with Volt sales falling 35% in March 2013, from March of 2012, to a paltry 1,478 units – roughly one Volt sale every other month per dealership.

Five bucks says another bankruptcy or at least another bailout of some sort will be imminent with THAT business model.

People buy American cars because they want cars with power, luxury and style- not MPG. To be sure, a lot of Americans buy economy cars, but that’s not our strong suit.

GM has always stood for American Exceptionalism- and for years took heat for it. But that’s what brings in the dollars. Was GM mismanaged? Yes, but not because they made big powerful autos- it was because they took forever to bring them to market and didn’t manage their finances to prepare for bad times.

It’s not the first time that happened though. In fact it happened before and the response was very different than a government bailout and electric cars.

In 1915, the US economy changed dramatically, and in that year GM was hurt by the introduction of lots of cheap autos made by competitors. People said back then “GM is finished”, and “you can’t build a company with Cadillac’s”.

Instead of bailing out, they defended their products and although almost failed, they published an ad defending their business practices. Today, that ad is considered one of the greatest ads EVER run by any company in the advertising industry- even though it only ran once. People flooded their showrooms to see what GM was selling. Here is a copy text of that ad, which was called “The Price of Leadership” (written by Theodore McManus) which ran in a full page ad, with single picture of a Cadillac:

In every field of human endeavor, he that is first must perpetually live in the white light of publicity. Whether the leadership be vested in a man or in a manufactured product, emulation and envy are ever at work. In art, in literature, in music, in industry, the reward and the punishment are always the same. The reward is widespread recognition; the punishment, fierce denial and detraction.

When a man’s work becomes a standard for the whole world, it also becomes a target for the shafts of the envious few. If his work be merely mediocre, he will be left severely alone – if he achieve a masterpiece, it will set a million tongues a-wagging. Jealousy does not protrude its forked tongue at the artist who produces a commonplace painting. Whatsoever you write, or paint, or play, or sing, or build, no one will strive to surpass, or to slander you, unless your work be stamped with the seal of genius.

Long, long after a great work or a good work has been done; those who are disappointed or envious continue to cry out that it cannot be done.  Spiteful little voices in the domain of art were raised against our own Whistler as a mountebank, long after the big world had acclaimed him its greatest artistic genius. Multitudes flocked to Bayreuth to worship at the musical shrine of Wagner, while the little group of those whom he had dethroned and displaced argued angrily that he was no musician at all. The little world continued to protest that Fulton could never build a steamboat, while the big world flocked to the river banks to see his boat steam by.

The leader is assailed because he is a leader, and the effort to equal him is merely added proof of that leadership.  Failing to equal or to excel, the follower seeks to depreciate and to destroy – but only confirms once more the superiority of that which he strives to supplant.

There is nothing new in this.  It is as old as the world and as old as the human passions -envy, fear, greed, ambition, and the desire to surpass.  And it all avails nothing.

If the leader truly leads, he remains – the leader. Master-poet, master-painter, master- workman, each in his turn is assailed, and each holds his laurels through the ages. That which is good or great makes itself known, no matter how loud the clamor of denial. 

That which deserves to live – lives.*

 

GM should remember that philosophy and pay off the government, even if they have to fire half their people to do it. They should go back to making fine cars and let the Chinese and Koreans squabble over who can make the best piece of junk. Furthermore, they should pressure the US government to force foreign countries to open their markets to GM products the way we open our markets to them.

GM should make as many Corvettes and Cadillac’s as people want to buy, and government should not be telling them what to do– or any other car manufacturer. “Limited Production” should not be in the GM dictionary. In 1965 when Lee Iococa saw the demand for the Mustang, against the advice of his own board of directors who wanted a ‘limited’ run of the car, he made Ford change almost every production line over to the new Mustang , and in 1966 they sold over 500,000 of the things. When confronted about that, and that people were worried the market might get flooded, lowering the price and the profits, Lee simply said- “Well, then we will invent something else”.

Now THAT’S a car guy.

The writer of that article, Theodore McManus put it best:

“The real suggestion to convey is that the man manufacturing the product is an honest man, and that the product is an honest product, to be preferred above all others.” 

We need them at the helm of GM– not bureaucrats who couldn’t run a lemonade stand profitably.

 

*THIS TEXT APPEARED AS AN ADVERTISEMENT IN THE SATURDAY EVENING POST, JANUARY 2ND, IN THE YEAR 1915, COPYRIGHT, CADILLAC MOTOR CAR DIVISION

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