Stop trying to play the blame game and get the job done GM

June 2, 2009 – 4:12 pm – No Comment

There’s no need to point fingers at GM for the bankruptcy it had to file. Now is the time for the company to try to come back from the brink of extinction rather than try to figure out whom or why.

Several news articles today are about which cars doomed General Motors or “Who’s to blame for GM’s Bankruptcy?” In the articles, everything from management to the Pontiac Aztec are mentioned as reasons for the fall of the once mighty auto maker. In a previous post, I blamed the auto company’s poor quality and lack of fuel efficient cars as the reason in recent years. However, it has taken years and a multitude of events to transpire for this to happen to GM.

Now is the time for GM to get their act together.

Today GM took the first step by announcing that someone is willing to buy the Hummer brand. While it was good while it lasted (or not), Hummer would have been completely done away with without a buyer. However, now that there is a buyer, GM will be able to recover some of the costs that it lost in acquiring Hummer. There was little known about the potential buyer of the brand other than that they are looking to aggressively finance the Hummer brand and its future product programs.

The government will be taking a huge risk by taking GM by the hand and basically leading it through chapter 11 proceedings. GM hopes to have everything in order to come out of bankruptcy in just a short 60 – 90 days.

The road back to profitability for GM will be bumpy and isn’t traveled often, most companies that file for bankruptcy never come out and are forced to liquidate rather than prosper.

Chrysler has shown that it is possible for a large company to come out of bankruptcy quickly, as long as it is helped along by the government anyway. Chrysler is planning on selling the majority of its assets to Fiat, an Italian car maker. The move would help the company along and it would make a move out of bankruptcy fairly quickly.

In the attempt to restructure, nine GM plants will close completely and three will idle while GM ponders its future plans.

David Cole, the chairman of Center for Automotive Research in Ann Arbor, Michicgan, said, “We are at the threshold of a dramatic increase in profitability for the industry, and we are increasing household formation in this country by one million a year, so demand is growing.”

At least there is a bit of optimism in the face of all the pessimism surrounding GM and its bankruptcy filing.