The auto industry gets a lot of attention in this course…most of it negative and most of deserved.  The Economist made the General Motors bankruptcy its cover story this week in most of the world and published several pieces about the long decline of GM that led to this point.  Although the current economic situation is easy to blame, at best better times would likely have only delayed the collapse of the once dominant car maker.  The story of the GM collapse can be related to many parts of our course from working with the value chain (unions, customers), to quality concerns, to fixed/variable costs management, to closing under-performing segments earlier, etc.

The filings lodged at 8am with a court in Manhattan were testimony to the size and complexity of the 101-year-old company and to the scale of the problems that had finally overwhelmed it. Until 2008, when it was overtaken by Toyota, GM was the world’s biggest carmaker, producing well over 9m cars and trucks a year in 34 different countries. It has 463 subsidiaries and employs 234,500 people, 91,000 of them in America, where it also provides health-care and pension benefits for 493,000 retired workers. In America alone, it spends $50 billion a year buying parts and services from a network of 11,500 vendors and pays $476m in salaries each month.

The decline and fall of General Motors. Detroitosaurus wrecks. Jun 4th 2009. From The Economist print edition

The bankruptcy of General Motors. A giant falls. Jun 4th 2009. From The Economist print edition