2013] DUTY TO THINK STRATEGICALLY 451
bankruptcy in 2008,1 but for 77 years it was the largest automaker
in the world.2
Despite GM’s success, monsters lay beneath the surface. For
years, GM failed to produce smaller, safer, more fuel-efficient
vehicles in response to changing demand.3 As a result, it
increasingly lost market share to foreign competitors over the
course of three decades.4 GM also lagged behind its foreign
competitors in standardizing its manufacturing processes and the
platforms, body architectures, and components that it used to
manufacture its vehicles.5 Without such standardization, GM not
only faced substantially higher manufacturing costs, but it also
lacked the manufacturing flexibility to respond to changes in
These failures left GM flat-footed when the financial crisis
struck in 2007–2008. Ultimately GM, together with Chrysler,
received roughly $80 billion in federal financial assistance at the
time of the crisis,7 and GM was forced to file for bankruptcy
protection to restructure its business in a way that would enable it
to compete in the future.8
While we may never know the true causes of GM’s collapse,
one factor in that collapse appears to be flaws in GM’s process for
managing its strategy. For example, numerous auto industry
experts have found that GM formulated its strategy for the creation
of gains on the basis of unrealistic assumptions about its
competitive environment.9 Even the Presidential Task Force on the
Auto Industry, formed to investigate the causes of GM’s and
1. See Fortune 500: A Database of 50 Years of Fortune’s List of America’s
Largest Corporations, CNN.COM, http://money.cnn.com/magazines /fortune
/fortune500archive/full/1998/ (last visited Feb. 21, 2012).
2. See BILL CANIS & BRENT D. YACOBU CCI, CONG. RESEARCH SERV., THE
U.S. MOTOR VEHICLE INDUSTRY: CONFRON TING A NEW DYNAMIC IN THE
GLOBAL EC ONOMY 43 (2010), available at http://www.fas.org/sgp/crs/misc
3. See infra Part II.A.3.
4. See OBAMA ADMINIST RATION, DE TERMINATION OF VIABILITY
SUMMARY: GENERAL MOTORS CORPORATION (2009) [hereinafter GM
VIABILITY SUMMARY], available at http://www.whiteho use.gov/assets
5. See infra Part II.A.3.
6. See infra Part II.A.3.
7. See C
ONG. OVERSIGHT PAN EL, JANUARY OVERSIGHT REPORT: AN
UPDATE ON TARP SUPPORT FOR THE DOMESTIC AUTOMOBILE INDUSTRY 18
(2011), available at http://cybercemetery.unt.edu/archive/cop/20110402010325/
8. Neil King, Jr., & Sheila Terlep, GM Collapses into Government’s Arms,
WALL ST. J., June 2, 2009, at A1.
9. See infra Part II.A.1.