Government loans have kept General Motors (GM) from slipping into the abyss since last year. Now, as a condition for even more funding, Chairman and Chief Executive G. Richard Wagoner Jr. has been sent packing by the White House. In his new book, Why GM Matters: Inside the Race to Transform an American Icon, William J. Holstein
chose to walk a precarious line between providing a legitimate and objective explanation of how GM wound up at the brink of disaster and defending the pre-ouster Wagoner as a victim of circumstance rather than a principal architect of a failed business model. So it's fair to say that Holstein, a seasoned business reporter for such publications as BusinessWeek, Fortune, and U.S. News & World Report, has both the best of timing and the worst of timing.
In Why GM Matters: Inside the Race to Transform an American Icon, William J. Holstein walks a precarious line between providing a legitimate and objective explanation of how GM arrived at the government welfare line last year and defending Wagoner as a victim of circumstance rather than a principal architect of a failed business model. However, Holstein, a seasoned business reporter for such publications as BusinessWeek, Fortune, and U.S. News & World Report, has great timing. Indeed, his account might be best as an e-book that gets updated weekly.
Why GM Matters excels when Holstein draws on the extensive access he was given to GM product executives such as garrulous Vice-Chairman Robert A. Lutz or designer Bob Boniface. A chapter on the development of the Chevy Volt offers a glimpse into the future of driving in the U.S. And Holstein's keyhole access will be enjoyable to those who still recall Motown's history of glamorous sheet metal.
Holstein also does a professional job of framing some of the issues that bedevil the automaker though they are not of its own making. These include its gargantuan employee-benefits burden, which puts it at a competitive disadvantage to countries with national health care, including Germany, Japan, and China. The author also peels some of the green off Toyota (TM), reminding us, for example, that that company was building gas-guzzling pickups and SUVs in the U.S. long before it broke ground on a Prius plant.
But Holstein is too nice. At times, he lays it on thick, as in a quote from board member George M.C. Fisher on Wagoner: "He is one of the most wonderful human beings I have met in American business." Yikes. Where is the book editor?
More important, Holstein describes the company's colossal mistakes of the 1980s, such as not taking Japan seriously enough, but has little to say about later blunders. Foul-ups perpetrated during Wagoner's watch as CEO and as the protégé of his predecessor, John F. Smith Jr., include failed and costly alliances with Isuzu (7202.T), Fiat (FIA.MI), Suzuki (7269.T), and Subaru parent Fuji Heavy Industries (7270.T). There is a whole chapter on GM's China endeavors but no critique of Wagoner's questionable attempts to sell Buick, Chevy, Cadillac, Opel, and Saab there—a lineup that mirrors GM's overstuffed U.S. brand portfolio. And while there's a lot on GM's newest, high-quality vehicles, how about a recounting of the infamously ugly and ill-starred Pontiac Aztek?
Holstein sometimes gets too caught up in details of dubious value. Take his chapter on GM's OnStar telematics system. Although that business reportedly makes money for GM now, it was long an analog albatross in a category that has rapidly gone digital and wireless. He also goes deep into the Kansas City (Kan.) car plant where GM has been driving "lean manufacturing." But GM continues to run behind Ford (F) as well as the Japanese in its manufacturing strategy. Holstein doesn't go into that.
The author also often leaves quotes maddeningly unchallenged. For example, by Wagoner's own admission it took him five years after he became CEO to create a global management scheme that streamlined product development. "Why'd it take so long? Cause I didn't think the organization was ready," says Wagoner. That's hardly a stirring battle cry.
GM still does matter to a great many U.S. car owners and job holders. And while the company and its defenders, including Holstein, often argue it is too big to fail, Wagoner and his predecessors dubbed too many problems—the sorts of things other CEOs tackle—as too big to fix. And that, more than anything, is why GM is where it is.