I grew up in a Ford family; I married a Ford woman. Our 2002 Focus has been a noble steed. So GM’s bankruptcy hasn’t bothered me too much.
Ford apparently has survived because it strengthened its cash position when Alan Mulally became CEO in 2006, and because its cars are considered to be better than Chrysler’s and GM’s. (Plus it appears to be a bit more open to innovation and market-responsive than GM has been). GM also got a little too involved in the home-mortgage business, as well as playing complex games with its pricing.
Though Chrysler’s slide hasn’t provoked much weeping and wailing (except among certain pension funds), GM’s has. It’s yet another sign (as if one were needed) of the USA’s heavy-industry rust-out.
Nostalgia isn’t a solid foundation for an economy. So where do we go from here?
On the infotech side, it looks pretty bright. The buzz phrase right now is cloud computing, and despite its name, it’s actually pretty practical. In cloud computing, your computer typically has little software of its own. Instead, it uses the Internet to access an outside server with free infrastructure, like Google Documents for word processing. If you don’t need much “cool stuff” on your computer, the cloud’s pretty dang cheap, especially if you use a $300 (or less) netbook.
But what else are we good at? Well, there’s financial innovation, which is all that GM appeared to be good at in the last decade or so.
But as Michael Mandel argues in a recent BusinessWeek cover story, the United States is losing its touch for real (as opposed to “shadow”) innovation. He asserts that the American pipeline in areas such as life sciences and new industrial technologies (green, nano, and so on) is currently running at a trickle.
The netbook/cloud phenomenon, in its quiet way, represents a really remarkable technological breakthrough. But if we’re going to truly recover from the current economic malaise, we’ll need to get off the keyboard and get in touch with our inner mechanic.
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