All the noise surrounding the bailout of GM this week reminded me of a meeting I had a few weeks ago with an executive that worked for another large car manufacturer. He said that even 10 years ago they could see that they were making a product that was likely to be unviable in the next few years (recession or not) and yet they were structurally and psychologically fixated on making large inefficient vehicles and developing the SUV market.
So whilst we do need to save the jobs of thousands of car workers and that of the related supplier network, should we also be asking a fundamental question about whether this business/sector resembling its current form has any long term viability at all, and if not what long-term re-skilling and remodeling initiatives also need to be put in place?
As Rob Scott from the Economic
Policy Institute said, by
imposing strict new emissions targets without giving consumers
incentives to buy the cleaner cars, the White House was safeguarding
the “shell” of the company, but abandoning many of its workers anyway.
In addition to this, the return of high commodity prices including fuel and steel, further legislation, consumer pressure etc will simply mean bailouts two, three, four, five and more for the tax payer.
So how do you know if you are working for another geriatric company or sector that isn't ready for the challenges we face today? Could it be something to do with high levels of resource dependence, an over reliance on intellectual property, scarily thin operating margins etc?
I don't know. In fact I am not sure even if I work for one now!
Rob Scott's comment can be found here:http://www.deccanherald.com/content/5599/obamas-plan-fire-general-motors.html
