A Gm Postmortem: Lessons For Corporate America

No one can relish watching the very public humiliation of Robert C. Stempel or the trauma his forced departure has caused at General Motors Corp. Given the carmaker's massive and deep problems, though, something had to happen sooner or later. So it's worth considering what lessons this messy episode offers for the rest of Corporate America.

-- Management can't hide. That's the biggest implication. All through the 1980s, managers hustled to make their companies competitive and to boost shareholder value--lest they fall victim to foreign rivals or to the raging takeover wave that was replacing poor managers. Not mighty GM. It drove along merrily, unresponsive to the changing car market. It never bothered with poison pills or other antitakeover devices, counting instead on its size for protection. But size means little to car buyers or creditors: GM's red ink, along with the prospect of sinking credit ratings that would deny it access to equity and commercial paper, eventually prompted independent directors to bring in new management.