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Kathryn Kolbert

Kathryn Kolbert

Kathryn Kolbert, a public-interest attorney and journalist, is the Director of the Athena Center for Leadership Studies at Barnard College, an interdisciplinary center devoted to the theory and practice of women's leadership.

Laud the White House, not Woodward Ave

Question: After a well-chronicled, 30-year decline into bankruptcy, General Motors is now profitable again and going public. What does it say about its former executives, directors and union leaders that such a large, complex organization could be revived in less than two years? What factor best explains why leaders don't take the hard but obvious decisions necessary to prevent an impending disaster?

As a child born and bred in the Motor City, I was raised to believe in Lee Iacocca's watchword: "As GM goes; so goes the nation." GM's turnaround has been much anticipated and appreciated, and most importantly good for the people who rely on the car industry for their livelihood.

But while GM management and unions should be acknowledged for their contributions, the leaders to be applauded here came from the White House not Woodward Ave. A mess as big as GM's could not have been fixed this quickly without the U.S bankruptcy code that allowed GM to wipe out its debt and the millions of dollars infused into the restructured company by the Obama Administration. This took guts and calm at a time when there was no good economic news and vigorous political opposition.

And thanks must also go to Chinese consumers who are buying GM cars at an astounding rate. Hopefully the current management, with the help of the UAW, can keep the new GM in gear as they move forward.

By Kathryn Kolbert

 |  November 15, 2010; 1:18 PM ET
Category:  Accomplishing Goals , CEOs , Corporate leadership , Crisis leadership , Economic crisis , Government leadership , Making mistakes , Managing Crises Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
Previous: Reviving a boiled frog | Next: Too big to U-turn


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I read RTINIDIANA comments with interest and yes he is prejudiced. I think we can safely assume he was a union employee and not a salaried employee. I think it was unfair for the US gov't to bail out union employee while giving salaried employees and investors the shaft.

Posted by: TeddyW | November 23, 2010 3:10 PM
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Laud the White House? Really? The people that allowed the stock holders in GM to get screwed while rewarding the Labor Unions who had a hand in the destruction of the company?

Posted by: akdonner2 | November 21, 2010 8:07 AM
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Actually, GM reported an income tax benefit of $25 million in their 3rd quarter report.


Posted by: AndrewDover | November 20, 2010 8:40 PM
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GM isn't nearly fixed.

Its only "profitable" because of two factors: 1) They are effectively paying no federal taxes at the moment. That's part of their bailout. I assure you that your personal finances would look great if you paid no taxes. 2) For the short term, you can make most any business look good and profitable. The test is for 5 years.

GM has bloated labor costs, they have a line of cars that would be great if this was 1990. And they're now burdened with this bailout. A lot of principled people will not buy cars from this monstrosity called GM simply because they represent the hubris of the current government.

I would rather see them bankrupt, restructured, and the union agreements fundamentally altered.

Posted by: Ombudsman1 | November 20, 2010 6:01 AM
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I too was born and bred in the automotive culture, the difference between you and me being that I was raised in the central Indiana automotive sphere of component plants that existed in Anderson, Marion, Kokomo, Indianapolis, Muncie and New Castle. In the 1960s GM was a huge employer; for example in Anderson alone GM employed over 20,000 people, and just guessing I would say that all of the companies probably employed between 50, 000 and 75,000 workers in this area.

Never did I consider that the automotive industry could find itself in such desperate straits. My parents met at a GM plant, and as an adult I worked for GM for thirty years. I'm not sure that I have eaten more than a handful of meals in my life that were somehow not paid for by a GM paycheck, since all my friends and their parents also worked for GM. By extension, the UAW has been a very important part of all of our lives around here.

I know there are a lot of people in America who loathe the aid that was given to GM through the TARP funds and the instructions of the auto task force during 2009. And I also realize that many people despise the UAW. But given the number of active jobs that were saved (and we should not forget how many jobs were also sacrificed) and the pensions of a goodly number of us that were saved that otherwise would have went to the National Benefit Guarantee Corporation, a government agency, I feel that the efforts of the Obama administration were justified. And even though I am a Democrat, I feel that George Bush, by releasing TARP funds to rescue the industry (bridge loans??), also deserves a lot of credit.

Finally, a question: Was it not Charles Wilson, GM's president in the 1950s, who has been incorrectly quoted over the years as saying either "As GM goes, so goes the nation" or "What's good for GM is good for America" and who actually said "For years I thought what was good for the country was good for GM, and vice versa" instead of Lee Iacocca? Lee certainly was good for the auto industry, being heavily involved in the design and launch of the Ford Mustang, and in his efforts after moving to Chrysler to secure loan guarantees from the government (the first auto company bailouts) and in the launch of the mega-successful Chrysler minivan line. This phrase may have been Lee's watchword, but I don't think he was the originator of it. Of course, I'm a GM guy, so I may be prejudiced.

Posted by: rtinindiana | November 18, 2010 11:48 AM
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