Three 800-pound Guerillas
If the Iraq War is considered a business model, it is unraveling—just like General Motors (and Ford and DaimlerChrysler).
A number of knowledgeable experts have declared our Iraq incursion not to be winnable. It does not take a language scholar to read between the lines of General Abizaid’s and General Pace’s testimony to see that the Pentagon is beginning to agree.
That’s because no one has a clue about how to deal with three 800-pound guerrillas.
The three 800-pound guerillas are al Qaeda plus Sunni and Shi’a murderers that are turning Baghdad into a scene reminiscent of Michelangelo’s “Last Judgment” on the altar wall of the Sistine Chapel.
The Failing GM Business Model
“For years I thought what was good for the country was good for General Motors, and vice-versa,” said Charles (“Engine Charlie”) Wilson, president of General Motors, during his 1953 confirmation hearings as Eisenhower’s Secretary of Defense.
“Is there a company more dangerous to America’s future than General Motors?” wrote Tom Friedman of The New York Times on May 31, 2006. “Surely, the sooner this company gets taken over by Toyota, the better off our country will be.”
What happened in the intervening 54 years between Wilson’s statement and Friedman’s slashing attack on GM?
Quite simply, GM made America dependent on foreign oil. It had a beautiful business model so long as a barrel of oil cost only a few bucks.
For years General Motors kept on trucking in spite of a huge problem—the fact that $1,500 of the purchase price of every car it sold went toward health care benefits for its employees and retirees. In 2005, that totaled $5.6 billion.
The corporation continued to make money because it satisfied America’s hunger for outlandish transportation—SUVs, pick-up trucks, Hummers and the like.
When the Middle East exploded and the price of oil went north, General Motors’ business model went south. At $3.50 a gallon, we are forced to pay $50 and $100 to fill our gas tanks, deeply diminishing our discretionary income. Dealers’ lots are glutted with shiny, new gas-guzzlers, and the market for used SUVs is non-existent.