Sputnik moment – or GM moment?

Sputnik moment – or GM moment?


General Motors' executives repeatedly caved in to United Autoworkers' demands for wages, health benefits and pensions the company could not afford over the long term. Small and inexpensive foreign cars were allowed into the U.S. market and, as their quality improved, began to flood the U.S. market.
GM executives failed to see what was happening, and if they saw it, to act upon the new reality. Thus, at the end of the last decade, the U.S. government acted.
The company was taken into receivership. Shareholders and bondholders of GM were wiped out. Hundreds of GM dealerships closed. Now, a new GM has come out of bankruptcy to take its place as one of a dozen major auto companies in the United States and the world.

The failure of GM was a failure of leadership. Executives lacked the vision to see the challenges coming. They lacked the courage to resist the demands of union bosses. They lacked the decisiveness to act, when sacrifices were clearly required.