The BIG Picture: GM could learn a lot from the nursing home industry
John O'Connor, Editorial Director
Thanks to General Motors and Uncle Sam, you now are. But, you're hardly alone. Our little club includes about 300 million of our closest tax-paying friends.
That's because our elected officials have decided to get into the auto business. Under a sweetheart deal, our government will erase the automaker's unsecured debt in exchange for company stock. That means you and I will have a 72.5% stake in the new GM.
But the government's investing acumen hardly ends there. We're also on the hook for another $30 billion. That's on top of the $19 billion check we recently mailed to GM's headquarters.
But at least the revamped company will quickly change the habits that drove its marketshare from 54% to 19%, right? Not so fast. Turns out the new GM looks and acts an awful lot like the old GM.
Yes, the old CEO is gone. But at least five of the new board's members will be holdovers from a regime that rarely favored any change. As for a leash being put on the unions that figured out how to get paid even when work wasn't being done? Well, it seems the U.A.W. has been given a bigger leadership role. Hmmm.
GM continues to make cars and trucks in 34 countries. But the firm is hemorrhaging cash.
So what should really be happening? I'm a fairly new owner, but I do think GM might take a lesson from the nursing home sector.
When I began writing about nursing homes in 1990, the following views were accepted as gospel: nursing homes did not need to change, the media was needlessly picking on the industry, quality care was optional, and assisted living was not really a competitor.
Many operators have since learned the fallacy of these assumptions the hard way. Today, the nursing home field is far from robust. In fact, there are actually slightly fewer facilities. But what has changed dramatically is the culture within them. Most now embrace quality. They also see innovation, execution and service as the keys to success. There is no “we're too big to fail” mindset in long-term care, as many operators have in fact gone under.
So GM, take a lesson: Your future is not in seeking handouts that only delay the inevitable. The firm needs a fundamental change. The sooner that happens, the sooner we reluctant tycoons can get back to our day jobs.