(EDITORIAL from the Korea Times on June 3)

Great to Gone
Firms Should Learn Valuable Lessons From GM's Fall

General Motors' filing for bankruptcy protection Monday is literally a
once-in-a-century event not just in American but global industrial history.

How the 101-year-old automaker, which has long been the pride of all U.S.
manufacturers and pledged to usher in another century of prosperity only a year
ago, has come to arrive at such a sorry state in so short a time should be
subject to a study by management gurus.
Even through amateurs' eyes, however, some problems were too apparent to miss. It
may sound somewhat cruel, but if a company beset by so much of the proverbial
``internal troubles and external threats'' as GM had remained unscathed, that
would have been rather strange.
As is well known, the domestic troubles in GM's case started with its management,
which turned a blind eye to global industrial trends toward smaller, more
fuel-efficient and less polluting vehicles but stuck to gas-guzzling models.
Unionized workers who wouldn't budge a bit in their welfare benefits through good
times and bad undoubtedly deepened the woes of GM, or rather the entire U.S. auto
industry.
The ``dinosaur's" fall could have come a bit later had it not been for the surge
in global crude prices and stiff challenges from Asian and European competitors.
So serious were the troubles GM was in that even the U.S.-triggered financial
turmoil and consequent global economic recession look like the straw that broke a
camel's back.
U.S. President Barack Obama and his auto task force seem quite confident to turn
GM around into a leaner and meaner player, but whether and when they will be able
to pull this off is anyone's guess.
It remains to be seen how many U.S. motorists will remain loyal to their troubled
carmaker particularly at a time when the industry itself is reeling from an
overall demand slump. GM will of course shift its production focus to lighter,
gas-sipping models, which will take considerable investment of time and money,
though.
Much to the relief of the domestic policymakers and autoworkers, GM-Daewoo has
been categorized as a ``good GM" unit to be included in the ``New GM" to be
reborn in a few months after harsh restructuring. Otherwise, it could mean the
chain bankruptcy of the local unit as well as losses of 17,000 jobs, a number
that could surge to several times higher if workers at numerous parts suppliers
are included.
For GM-Daewoo to survive and even thrive, concerted efforts of its managers and
labor unionists are a prerequisite. The management is urged to turn the Korean
unit from a simple assembly plant to one of its global bases of small-car
manufacturing. Unionized workers for their part should struggle to sharply
enhance their competitiveness, mindful of the harsh reality that they should be
able to win over competition with GM's Chinese and Mexican offshoots.
If the world's largest carmaker for 77 years can fall in a year or two, most
Korean manufacturers' fates could prove to be little more than dayflies.
(END)