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GM: Where's Steve Jobs When You Need Him?

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Only rapid innovation can save the American auto industry.

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In 1900, The Ladies Home Journal made a series of predictions about what the world would look like in the year 2000. Some of the predictions were eerily prescient ("Photographs will be telegraphed from any distance"), others were endearingly overly optimistic ("No mosquitoes, nor flies"), while others still seemed inspired by one too many hits from that snuffbox ("Oranges will grow in Philadelphia!")

But it's the excitement about the future of cars that now seems most striking.

"Automobiles will have been substituted for every horse vehicle now known."

If only! If only we were so optimistic about the automotive industry today. Instead, General Motors (GM) looks worse than Rocky after his bout with Clubber Lang. The whole company looks sadly beaten down, a dying animal flailing hopelessly around. "Please sir, can I have a bailout?" While politicians and economists argue about life support, the future seems pretty clear: GM is DOA.

The implosion of GM would be a terrible thing for thousands of workers and their families. Lost health insurance, lost retirement benefits, lost seniority. One giant after another has fallen in the last year - and the shockwaves just keep multiplying.

The collapse of GM would be a terrible thing for the American soul. It'd be like losing the Statue of Liberty. Or baseball. Or Delaware. We'd feel like something was missing: An amputee reaching for a phantom limb.

But if we let ourselves forfeit our fascination with cars, the fault will be ours alone. In the next decade, America will need to reinvent its automobile industry the way it's reinvented the tech sector. GM could stand to benefit from learning how to do this from another GM: That is, Generation Me.
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No positions in stocks mentioned.

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