D
aimler may have invented the automobile, and Ford
may have invented the automobile factory, but
General Motors invented the modern automobile
company. When GM was founded in 1908, there
were 253 automakers in the United States, all with
entrepreneurs and engineers, dollar-men and dreamers,
vying to make their fortunes with a technology that was
going to change the world.
Henry Ford was the Bill Gates of the era, quick to
grasp the potential of democratizing automobility. But
GM’s Alfred Sloan was in many ways the era’s Steve Jobs,
intuitively understanding that adding form to function
made the automobile more than mere transport, that it
could transform need into desire.
GM didn’t just pioneer the automotive design studio.
It also pioneered the electric self-starter and automatic
transmission, two innovations that helped make the
automobile even more accessible. GM did the funda-
mental scientific research that led to the development
of the catalytic converter and the airbag. It
was experimenting with electric vehicles and
autonomous drive systems before Elon Musk
was even born. It helped design and engineer the
only car to have ever been driven on the moon.
For almost 80 years, GM bestrode the auto-
motive landscape like a colossus, making and
selling more cars than any other automaker in
the world. It held the top spot on the Fortune
500 list for more than three decades, and when GM
CEO Charles “Engine Charlie” Wilson said in 1953 that
he thought what was good for the country was good for
General Motors—and, more famously, vice versa—it was
simply accepted as fact.
No more.
GM crashed into bankruptcy on June 1, 2009, the
global financial crisis dealing a mortal blow to a company
weakened by years of institutionalized arrogance andinept leadership. It survived, thanks to an injection of
billions of dollars from the federal government that at
one stage saw some 60 percent of the company owned
by the U.S. taxpayer. And although GM paid back every
cent it was obligated to pay to the Treasury, it has never
really recovered. In the decade since, the company that
was once the very definition of the power and strength
and wealth of American capitalism has become the
incredible shrinking automaker.
Last year GM sold 7.7 million vehicles worldwide,
less than the 8.4 million retailed in the recession-
weary year of 2010 and well down from the 10 million
it sold in red-hot 2016. GM is now merely the world’s
fourth-largest automaker in terms of sales, well behind
Volkswagen Group, Toyota, and the Renault–Nissan–
Mitsubishi alliance. Part of that is because GM lost Opel’s
sales contribution when that company was sold to PSA
Group in 2017, but there are deeper issues.
GM’s net revenues are little changed from a decade
ago—$137.2 billion versus $135.6 billion—
though, to be fair, the lengthy United Auto-
mobile Workers strike last year is estimated
to have cost the company $2.6 billion. Net
income has improved over the decade, up
from $5.6 billion in 2010 to $6.6 billion now.
But it’s less than half the 2016 result, when
GM’s global sales were 30 percent higher.
The recent announcement that GM is
to shut down its Australian design, engineering, and
sales operations in 2021—and retire the iconic Holden
brand—continues the string of cutbacks, closures, and
asset disposals over the past 10 years.
GM bean counters can no doubt give chapter and verse
on why all this shrinkage makes good business sense; the
fact that the company lost $20 billion over 20 years in
Europe, for example, suggests it was time to quit. (Yet
PSA’s Carlos Tavares managed to get the business to
turn a profit a year after he took the helm, so you have
to wonder what the problem really was.)
But ponder this: Of the 7.7 million vehicles GM made
last year, almost 84 percent were sold in North America
and China. Once the automaker to the world, GM is now
almost entirely dependent on just two markets. And even
in its home market, GM is slipping: In booming 2004,
GM’s U.S. market share was 26 percent. Fifteen years
later, it barely scrapes 18. And in China, GM’s sales fell
15 percent last year.
GM largely has itself to blame, of course. But it’s still
sad to see the easy confidence and vaulting ambition
that enabled Harley Earl’s rocket-age styling, Ed Cole’s
small-block V-8, Zora Arkus-Duntov’s Corvette, and a
thousand other exciting products and innovations that
transformed the automotive age is no more. QNEWS I OPINION I GOSSIP I STUFFGeneral Motors: The Incredible
Shrinking Automaker
Angus MacKenzie
General Motors
once stood as an
ambitious leader
in the automotive
landscape,
embodied by,
among others,
Harley Earl, shown
here with his
Firebird I, Firebird
II, and Firebird III.
But the GM that
enabled his kind of
iconic leadership
no longer exists.The Big Picture
k every
never
ny that
rength
me thedwide,
ssion-
million
world’s
behind
issan–
Opel’s
to PSAecade
lion—
Auto
mmatedated
n. Net t
de, up
n now.
when
gher.
GM is
g, and
olden
s, andverse
e; the
ars in. (Yet
ess to
have
made
erica
now
even General Motors86 MOTORTREND.COM MAY 2020