I have always encouraged caution to companies that sleep with an elephant. If it rolls over you're dead. I know how crushing that is because I have done it and been killed. Too bad I was never hired as a consultant to General Motors.
Now the elephant itself is dying. The companies that have been sleeping, albeit in fits and stops over the last couple years, are wide awake. They are desperately seeking solace from the great elephant hospice -Uncle Sam. Except the hospice is encouraging the elephant to stop fighting. Just let go it counsels. Poor elephant is simply delaying the inevitable they say.
Of course the immediate family, Lear, Magna and American Axle who used GM receivables as the back up to their credit lines, are the least able to want to let go. Their own stock prices are cratering and market caps are actually in a number range regular people can understand. Boo Hoo they are wailing. No matter that they didn't Black Swan their futures. There are plenty of people on the Fortune 500 List of Richest People who can afford to buy any one of them lock, stock and barrel. Foreign investors must be swooning.
Unfortunately the cities around Detroit like my hometown Toledo are swooning too but for the opposite reason. "When Detroit gets a cold Toledo sneezes" is a common saying here. Voting against legislation that didn't support the auto industry was heresy. Situated at the intersection of I-75 and I-80/90, setting on the navigable Lake Erie and within 50 miles of at least eight major universities Toledo seems at the perfect spot for all kinds of transportation hubs and distribution centers. But like many small cities close to large industrial centers Toledo kept its scarce resources focused on an elephant. It was warm and restful for nearly 100 years. Now Toledo finds itself walking behind the elephant and everyone knows what that gets you.
It's easy for small businesses to get in this position. Don't let it happen to you. Learn from OPM - other people's mistakes - and you won't have to find yourself begging for the other OPM - other people's money...like your neighbors. It might be painful but you'll be able to respect yourself in the morning.
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