Daimler 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 its Steve Jobs, intuitively understanding that adding form to function made the automobile more than mere transport, that it could transform need into desire.
GM not only pioneered the automotive design studio. It pioneered the electric self-starter and automatic transmission, two innovations that helped make the automobile even more accessible. It did the fundamental 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 born. It helped design and engineer the only car to have ever driven on the moon.
For almost 80 years, GM bestrode the automotive 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. 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 and inept 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-recovery year of 2010, and well down from the 10 million it sold in 2016. It 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 UAW 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 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 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.
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.
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