The twin demises of GM, last year as the world’s biggest car company and a now as a viable financial entity, is encouraging plenty of people to attempt to discredit the US giant as a car-builder. We’ve already heard many ‘industry experts’ (as well as predictable platoons of news media know-nothings) criticising the giant company for not building cars the public wanted.
This is a gross oversimplification of the situation. One disastrous factor, above all, brought GM low. It was a series of decisions, made 50 years ago for the most benevolent reasons, to provide existing and retired employees with benefits the company has not been able to afford for at least a decade. As departed chairman Rick Wagoner memorably put it, GM is a company with 300,000 employees, which is responsible for the pensions and medical bills of 1.1 million people.
The truth about GM’s car-makers, both the pared-down American concern and the newly-devolved bits on this side of the Atlantic - is that they have already designed and are well advanced with producing many of the cars that will be needed for tomorrow’s market. The US company’s new financial freedom, afforded by this Chapter 11 bankruptcy, will allow the company to build cars on a similar cost basis to the US-based Japanese for the first time in decades.