General Motors
General Motors held the #1 global automaker position for 77 years - until it didn't.
General Motors held the #1 global automaker position for 77 years - until it didn't. The company that defined industrial centralization in the 20th century fell to Toyota in 2008, not because GM was incompetent, but because it couldn't evolve fast enough when the fitness landscape shifted.
GM's strategy was storage: 30-60 days of parts inventory, 60-90 days of finished goods - $10-15 billion tied up with $500 million to $1 billion in annual warehousing costs. The buffer protected against strikes and demand spikes, but it hid quality problems and created massive exposure. When the 2008 financial crisis hit, GM couldn't sell cars fast enough. Inventory depreciated faster than it moved. The company filed Chapter 11 bankruptcy on June 1, 2009, with $10+ billion in inventory write-downs.
GM tried to learn from Toyota. The NUMMI joint venture in the 1980s gave GM direct access to lean manufacturing. But you can't jump from 'bare rock' to 'climax forest' in five years. Culture change takes time and sequence. GM had the blueprint but couldn't implement it - and by the time they understood why, Toyota had already taken the crown.
Cautionary Notes on General Motors
- Failed to replicate TPS despite NUMMI partnership
- Lost 77-year #1 position to Toyota in 2008
- Filed Chapter 11 bankruptcy June 1, 2009
- Stored wrong resource type (depreciating inventory vs. fungible cash)
- $10+ billion inventory write-downs during 2008 crisis
General Motors Appears in 4 Chapters
GM exemplified industrial centralization with multidivisional structure maintaining strong central control during the 1900-1970 era.
See centralized architecture →GM scaled back EV targets by 2024 as EV sales growth slowed, validating Toyota's bet-hedging approach over pure-play commitment.
See cyclical adaptation →GM's NUMMI joint venture failed to achieve Toyota-level results, demonstrating that succession requires time and sequence - you cannot skip stages.
See cultural succession →GM's 30-60 days of parts inventory tied up $10-15 billion in capital, creating massive exposure during the 2008 crisis and $10+ billion in write-downs.
See storage strategy risk →