Behind GM

By Jennifer Hopfinger
December 5, 2008 12:57 PM

Fortune magazine features an iconic red 1957 Chevrolet Bel Air convertible on the cover of its December 8th issue, along with the headline, “GM: Death of an American Dream.” The image of the automakers glory days are a far cry from today’s dire straits. The story, by Fortune writer Alex Taylor III, offers an insightful “corporate memoir” of his time covering the beleaguered automaker.

Taylor began his career as a reporter in Michigan and has been a business journalist for 32 years, including 23 years at Fortune. Over the years, he’s visited General Motors operations around the world, interviewed scores of executives and analysts, and attended countless auto shows and news conferences--and so, has a unique perspective on the depth of the company’s big problems. “It was the great American company when I started covering it three decades ago,” he writes. “But by clinging to the attributes that made it an icon, General Motors drove itself into ruin.”

His personal observations about the culture at the three big automakers are telling: “Ford executives tend to be scrappers skilled at bare-knuckle office politics, while the top brass at Chrysler traffic in bravado and charisma. Not at GM. Guys like (Chief Executive Rick) Wagoner set the tone: smart, sincere, diligent--modern-day Eagle scouts … They prefer stability over conflict, continuity over disorder, and GM’s way over anybody else’s.” And that kind of thinking at GM has led to decades of declining market share.

GM’s story has been a “tale of accelerating irrelevance.” As customers, competition, and technology changed, the company did not. The article recounts the writer’s early days covering the company--the strikes, the layoffs, the engineering problems, the troubled city where GM was headquartered--and chronicles the more recent mistakes he’s watched the company make--failed new products, inexplicable changes in strategy, botched attempts to adopt new technology.

In Taylor’s most recent story about the company--in January 2008--he suggested that a turnaround at GM was finally at hand. And then high oil prices and tanking SUV sales blindsided GM’s undiversified North American business, and the credit crunch whacked GM finance arm. Taylor says that he isn’t opposed to a government bailout of GM, but he wonders if this company, that has been declining the whole time he’s been covering it, is even capable of turning itself around with Washington’s help, or if bankruptcy might give it the leverage it needs to truly reposition itself.

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Copyright © 2009 Donald W. Reynolds National Center for Business Journalism