General Motors has certainly seen better days. Not only has the company’s stock price fallen 50 percent over the past year, but it is struggling with plans to cut 30,000 jobs over the next three years while closing nine North American factories. To make matters worse, billionaire investor Kirk Kerkorian recently dumped a whopping 12 million shares of GM stock. And yesterday came the coup de grace — news that Toyota plans to produce 9.06 million vehicles next year, surpassing GM to become the world’s largest car maker, knocking GM out of the top spot for the first time in seven decades.
Seemingly lost on many reporters is the fact that Toyota’s move is not as important as the other challenges GM faces; a company’s profits matter far more than how many cars it’s churning out. Nonetheless, it was nice to see theWall Street Journal respond to the cascade of bad news today with a long, thoughtful take on GM’s problems. The article offered an interesting prognosis for the near-term future and explored some of the less publicized battles brewing within the company.
As one might expect, the Detroit papers also provided extensive coverage of the travails of the city’s largest corporation. But what they offer in volume, they lack in depth. The Detroit Free Press, for example, ran a piece today looking at the effect Toyota’s announcement might have on the automaker, and the region in general. The piece rightly points out that profit, not volume, is the important variable. It also features quotes from a local GM autoworker, the chairman of the Center for Automotive Research and GM spokesman Dan Flores. But the Freep’s reporters, who by virtue of their proximity to GM ought to have superior sources, seem not to have spoken to a single corporate insider. As a result, a large segment of Detroit’s newspaper reading population has very little information about what GM is planning to do to counteract the flood of setbacks.
As for the paper’s other two GM articles, neither offered anything above and beyond the Journal’s reporting. One was a newsy report on Kerkorian’s stock sale, which “helped feed in to the drop in GM’s share price to its lowest level in 23 years.” Despite being at the center of the action, the Freep did not get in touch with anyone who could provide enlightening stories about Kerkorian’s frame of mind or the reaction to the sale from GM’s corporate chieftains.
The paper’s other GM story was a lament to the automaker’s allegedly declining fortunes - tracing the tragic arc of one of the national economy’s most important engines and a cultural legacy to boot. Not fluff, exactly, and not bad. But like the paper’s other two offerings, this story did not appear to have been written by someone who had recently breached the perimeter of GM corporate headquarters.
The Detroit News, meanwhile, published a story about Kerkorian’s stock dump that was indistinguishable from the Freep’s report and many others. It did not deliver a business-minded analysis of the company’s problems, and although its reporters could probably meet a GM executive or two simply by going to the local bar, there was no evidence that they tried to do so.
This is perplexing. GM is not only the biggest game in town in Detroit, but it is hugely important to thousands of communities around the world whose local companies supply the behemoth. That makes for a lot of people who’d like to get a feel for what’s being discussed in the boardroom. Is there a plan to fix the world’s largest car company? What is it and who’s making it? Are office politics keeping good ideas from reaching the top? What is the real story here?
We don’t know, but we’re guessing nobody can tell it better than Detroit’s hacks. They just need to get out of their cubicles and spend a little more time in the bars.