A year ago (oh, how time flies when in the midst of a great recession), the world was a much different place. Yes, mortgage foreclosures were increasing, yet feew predictated a collapse. GM was sputtering along, although defiant that they were entering a financial hellstorm. Chrysler and Damler (former owners which sold out) were wrangling over whether or not they misled. Oil at the time was setting records approaching the $150/barrel mark with a few analysts predicting $200 was just around the corner. And we mustn’t forget, the giant ponzi schemes like Madoff, Stanford and a multitude of others that came tumbling down. Oh how so many things have changed. And many of these events were truly, Without Warning Events.
Today, the world is a much different place, and I’m pondering the future viability of GM & Chrysler. Can they be truly turned around? Regardless of the final outcome, one simple theme will ring true.
It’s easy to rescue, it’s difficult to rebuild.
Now that GM has been bailed out and Chrysler has been bailed out and rescued by Fiat - what’s next. Can these organizations truly make the dynamic and dramatic turn-around they desperately need to achieve? Since their excess baggage has been off-loaded, can they become world class competitors? Will they be able to retain existing talent and entice new talent to join their organizations? Or, will this simply become a short term fix to a problem that should have been allowed to expire.
Bottom line: Organizations that become too big to fail have many unintended consequences - most of them originating from silent problems. And yes, it’s easy to rescue. Now comes the hard part.
