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Took them long enough June 3, 2008

Posted by truthspew in Uncategorized.
Tags: , , ,

Now comes news that GM is closing the doors on four truck and SUV plants in Canada, the U.S. and Mexico.

The corporate world has become so bureaucratic that it makes even government look positively enlightened. That it took General Motors this long to decide to stop producing the road behemoths is a clear illustration of that fact.

One of the things I learned in my economics classes was that there are economies of scale and diseconomies of scale. In other words being big has advantages such as raw material purchasing power, labor agreements, etc. But it also has disadvantages like the inability to easily make a cost cutting decision at the proper time, or even managing staff.

I recall a study that said the optimum group size is 150 people. Anything over that and the group starts to break down. There was an example of a webbing manufacturer in Delaware who each time a plant grew to 150 he’d open another plant and start again. GM is now past the 150 mark even with the massive layoffs they’ve had.

And GM has been in financial trouble since the 70’s. A friend of mine worked in the financial side of GM back then and he told me some of the things that went on. Lets just say financially speaking I wouldn’t want to be in any of the auto manufacturers right now.

But one has to wonder, will GM ramp up production of more economical vehicles? It’s funny I was watching a retro Bell System ad the other day and came across a Dodge commercial for their Horizon 024. That little car got 30MPG city, 50MPG highway. How the hell did we get away from that?

I see a car in my future. I’ve been able to live without one for a very long time but that’s easy when one lives in the center of ones microcosm. But both my career and Keyron’s will require a bit more mobility. My enhanced mobility requires a 10-15 mile radius, his could be slightly bigger.

In my case I can get away with something that gets sub-par mileage. I note a fairly recent vintage Ford Expedition for sale for $1,100. I know those beasts get a whole 13MPG. For Keyron it’ll have to be a small car, probably a Honda Civic. And I’m seriously considering a motorcycle for the warmer months.

But the fact it took GM this long to realize it had a dead albatross around its neck is an amusing look into corporate life.



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