It’s no secret that General Motors declared bankruptcy today, and who among us didn’t pause — at least for a second — and think about what it means? General Motors was the world’s largest industrial corporation, and it went out with its once-mighty $70-a-share stock trading for 75 cents.
In its bankruptcy filing, GM said it had $82 billion in assets … and $172 billion in debts.
I don’t know about you, but my first car was a GM product. It was a really cool 1962 Chevrolet Nova convertible in fire-engine red, with red interior. Did you snuggle in the commodious back seat of something from the Heartbeat of America, too? Interestingly enough, though it was huge by today’s standards, the Nova was then considered a “compact,” part of a downsizing revolution that began with the Ford Falcon. But like all Detroit shrinkage, it was soon abandoned. The Nova got bigger, too.
The new GM will not only be much smaller, its cars will be, too. Today’s GM CEO is not some Detroit product but, effectively, a bearded 31-year-old Yale Law student named Brian Deese. President Obama will obviously call some of the shots, too.
By the end of 2010, GM will have only 34 plants in the U.S., down from 47. GM tells me that one of the few certainties post-bankruptcy is that by early next year the company will be building its global small car, the Chevrolet Cruze, in its Lordstown plant in Ohio. It will also build the much-anticipated series hybrid Chevrolet Volt (Detroit-Hamtrack) and the really tiny Chevrolet Spark somewhere.
GM does not have a stellar record building small cars. The Chevrolets Vega and Chevette come to mind, and neither covered the company in glory. But this will be a smaller, smarter post-apocalyptic GM. It won’t dominate the known world, and it won’t have a quarter of the American market anymore. But if it realizes that “small is beautiful,” it just might survive.