Wednesday, September 30, 2009

Losing a Planet

GM made a critical decision today, severing the underperforming Saturn brand after Penske could not find suitable long-term manufacturing to carry the brand forward. While I was disappointed to see the brand disappear, I understand the decision to move forward and leave the losses behind. This is never an easy decision, in fact, I doubt anyone at either Penske or GM wished this to be the outcome. What it does show is that our manufacturing base has been crippled in this country. With no factory or supply chain to turn to, Saturn fades away to a soon-to-be-forgotten entity few will write into the history books as anything other than a well intentioned but poorly executed experiment.

The business model Saturn started with was novel, efficient, and perhaps could have been a success given leadership being a bit more progressive in design and marketing. The product began with a cult following, strong sales, and customer loyalty before floundering with the American consumer and receiving an artificial lung from grandpa GM. The recent surge it experienced was a futile attempt at a comeback, and ultimately, too little too late.

We are evaluating similar models we have employed. With each of our lines of goods we have to make those same hard decisions - do we persevere or cut bait and move forward? Some of the lines have succeeded greatly, while others have found a hard start and even slower growth pattern than what any of us had envisioned. The important lesson here is that you learn from each of them and evaluate the next having a keener perspective and perhaps a bit more wisdom than before. I hope that GM learns from this, but I also hope the American public learns that stripping away the manufacturing base in this country is a short-sighted plan that could ultimately disable our ability to produce the durable goods we need to survive.

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