Let GM Go

By Oh Young-jin

Assistant Managing Editor

In March 2005, I felt agitated following reports on the last breath in the Terri Schiavo saga. Schiavo, a Floridian woman, was kept alive on a feeding tube in a persistent vegetative state for the previous 15 years.

Her husband, Michael, insisted that Terri deserved a respectable death, citing medical experts' opinion that her brain was extensively damaged and didn't function. The Schindlers, Terri's parents, opposed it, believing their daughter was still partially capable of facial expressions to show joy and sorrow, which the autopsy later confirmed were muscular aberrations.

Terri died of dehydration after the removal of her feeding tube on a court's order March 15 that year, leaving her country as divided as ever between pro-lifers and pro-choice supporters. I found myself sad to let her go but relieved in a hope that her family would regain a semblance of their normal life after her death.

Now, GM resembles the corporate case of Terri Schiavo. The biggest of Detroit's Big Three carmakers has been on a life support system for a long time, with its feeding tube connected to the commercial aspect of American patriotism, or the `Buy Made in USA'' spirit. Without it, GM couldn't have survived a long series of poorly-built cars whose production costs exceed their price tag, or its CEO for seven years, Rick Wagoner, would not dare to demand taxpayers' money for bailout.

The fate of GM, not a corporation but an institution, gets America as emotionally divided as did the Schiavo case. Supporters believe that it is on a short-term rough patch and government handouts can be used as a bootstrap to pull it out and get it up and running again, while opponents insist on letting it die its natural death at the end of a corporate evolutionary cycle.

For a couple of reasons, I am far more convinced than with Terri in 2005 that GM should go.

First, contrary to Terri, I think GM can have another life.

To get it, GM should go through a painful phase of restructuring, either though a government-sponsored bankruptcy or a court-mandated workout under Chapter 11 protection. This process should reduce payrolls, ditch unprofitable lines and cut new deals with labor. Perhaps at the end of the process, the name GM may be history, just like Lehman Brothers, the bankrupt investment bank on Wall Street, with the most viable of its brands to be spun off and operate independently. The breakup of AT&T; is an example.

The death of GM as we know it will send a message that there is no corporation that is too big to fail, helping USA Inc. get rid of moral hazards. This could rally the support of American taxpayers, who are disenchanted with the Bush administration's preferential treatment of AIG or Citigroup, while obtaining their consent on its unpopular ``flooding-the-markets-with-dollars'' policy. In turn, it will hopefully hasten the end of the global financial crisis and help children of GM regain consumers' confidence.

For this process to kick in, GM needs a leadership change first. Although it is unfair to dump all blame on the current leadership, Wagoner and other leaders are very much associated with GM's plight. Besides, Wagoner turned out to be a source of bad publicity during his recent appeal before U.S. Congress, turning himself into another Fuld, the leader of now-defunct Lehman, who blatantly excused himself and blamed the government for his bank's failure.

For any doubters, a look at the current price of GM stocks would help. Already, investors have given their no-confidence vote.

The change should emulate the extent of the Bush-to-Obama transfer, not necessarily by race but capability. Considering the complexities of GM operations, a new leader should possess in-depth knowledge of the company.

Recommending somebody at this juncture is awkward for me but, more importantly, could harm his standing at GM. But, believing that he stands on his own merits and his integrity is well established, I recommend Nick Reilly, the current GM chief in charge of Asia-Pacific operations, based in Shanghai.

From his extensive experience with GM, he knows the company inside and out, but being from the United Kingdom, has been insulated from its inner workings.

He has shown his skills in dealing adroitly with labor unions― especially with the union of GM Daewoo Auto and Technology ― and proved to be a trust-builder. Besides, he is leading GM's operations in China, the future of any global carmaker. I had an opportunity to look at him interact with his Korean employees during an interview and appreciated his ``people-first'' leadership, which turned GM Daewoo around after five years in charge (To be fair, I also had an interview with Wagoner during an international motor show). Behind Nissan's turnaround was Carlos Ghosn. GM needs somebody like Ghosn. I see a Ghosn in Reilly.

This column doesn't represent the viewpoint of The Korea Times but that of its author. Disrespect is intended neither for Terry Schiavo nor her family _ ED.

[출처 : 코리아타임스]