Not so sclerotic: the truth about General Motors

Karl Ludvigsen is irritated by ill-informed criticism of the troubled American auto giant — which was once a model of quick, responsive and decentralised decision-making

Outraged is too mild a word for the way I felt after reading a piece in the 12 November edition of the New York Times about General Motors. Focusing on the faults of this once-great company, its author said the following:

For all its financial troubles and shortcomings as an automaker, no aspect of GM has confounded its critics as much as its hidebound, command-and-control corporate culture. When GM collapsed last year and turned to the US government for an emergency bailout, itcentury-old way of conducting business was laid bare, with all its faults in plain sight. Decisions were made, if at all, at a glacial pace, bogged down by endless committees, reports and reviews that astonished members of President Barack Obama’s auto task force.

This accusation cannot go unanswered. GM was the victim of an accumulating sclerosis which, toward the end of the 20th century, deeply impaired its decision-making capacity and its responsiveness to the marketplace. This was no secret to many GM insiders as well as observers of the industry who bemoaned the corporation’s inability to get to grips with its problems. But to assert that this was GM’s culture throughout its 100-year history is just plain wrong.

The great strength of General Motors through its glory years was its system of strong, independent operating divisions with shrewd central co-ordination. This was a by- product of the way GM was created in 1908 by its founder, William Crapo Durant. A magpie for motor companies, the wheeler-dealer Durant started with Buick as his nucleus. He added Oldsmobile and then, in 1909, Cadillac and Oakland, with Chevrolet joining in 1918.