Tuesday, April 03, 2007

North American Auto: Reason for Optimism (1)

I know nothing about cars. I've been known to check the windshield washer fluid while meaning to check the oil, and if you asked me what kind of car I drive, I'd tell you that it's a blue one. My understanding of the automotive industry is limited to reading the papers and cramming for job interviews.

While doing research for my paper last week, I expected to find General Motors to be a lumbering bureaucracy, dismissive of consumer taste and a laggard in quality, as it is often portrayed in the media. I was not shocked to find that portrayal to be a fiction. In business school, we're counseled not to fall back on "management is stupid" hypotheses, despite the fact that both the business media and business school professors routinely employ it in their critiques of GM and Ford. Management at these companies is a lot sharper than they're given credit for. GM's quality today matches that of Toyota, its ten brands are not the the unimaginative portfolio of duds that aficionados assert, and it was not so myopic as to invite its current burden of insurance. I'll comment on each of these three issues, as well as the challenges that confront Toyota as the soon-to-be number one automaker over the next couple of days.

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