Brutal, unforgiving change was inevitable
Checking the site Thursday for news, as I do several times each day, the outdated chart caught my eye. I sat there, stunned, mulling what the confluence of prevailing business culture, the "creative destruction" of the Great Restructuring and the flight of a few prominent cowards (CMA and DCX) had wrought in Michigan:
Of the 10, five were listed with a simple red "1.00" and an "NA" for stock price -- because they're bankrupt or gone, glaring testaments each to the inability of some of this town's most prominent corporate players to, first, understand and, second, to respond aggressively to fundamental competitive threats until it was too late.
There was General Motors Corp. and its spurned parts unit, Delphi Corp. There was bankrupt Visteon Corp. and Lear Corp., nearly so. There was Kmart, bankrupt, revived, then decamped to Chicago and absorbed by Sears Holdings Inc.
No. 6 is DCX, the defunct ticker symbol for DaimlerChrysler AG, the disastrous German-engineered "merger-of-equals" that fell apart and shunted Chrysler, like an unwanted foster child, to two subsequent owners and one bankruptcy. No. 7? Comerica Inc., the regional bank with a 150-year history in Detroit that bolted for Dallas in a bid to raise its price-to-earnings ratio.
How's that PE workin' out for you, guys, your financial manifestation of what some Texans call "all hat and no horse." A Michigan company my eye.
Only three Michigan companies on my nostalgic chart remain unscathed, for now, by bankruptcy or predation: Ford Motor Co., Compuware Corp. and American Axle & Manufacturing Holdings Inc., the most likely of the survivors to take its own turn in the ditch depending on the outcome of GM's blast through bankruptcy.
Of course, there are others: Crowley Milner, Hudson's and Jacobson's in retail; NBD and Michigan National in banking; Handleman, which ended up on the wrong side of Wal-Mart; Upjohn and Gerber among the outstate stalwarts -- none of them with the financial strength to be acquisitive, only to be acquired and to disappear.
That was the '90s, mostly. The Great Restructuring of the past year is creative destruction of a different kind, an indiscriminate force attacking Michigan's corporate foundation and making all the excuses for failing to change -- the culture, the unions, the customers, the competition -- sound so lame, even absurd.
Unintentionally, my useless stock chart holds the results of the market's referendum on Michigan's prevailing business culture, a reflection of the Big Three automakers that set the standard 'round here for executives, salaried and union workers alike.
No need to say what the results are. They're all around us -- communities contracting, schools cutting programs, jobs disappearing, companies being dismembered in bankruptcy when they aren't preparing to wipe out shareholders or deny retirees pensions promised to them.
Kmart, with its dirty stores, surly staff and tawdry merchandise through the '90s, couldn't match Target and simply couldn't grasp Wal-Mart. GM understood Toyota, economies of scale and common processes, but its execs couldn't get there fast enough nor were they held accountable for failing to do so.
The bankrupt suppliers are creatures of the Detroit auto culture. They're inextricably linked to the companies that pay their bills and define what they are, from Southfield, Dearborn and Troy to Ruesselsheim, Shanghai and Sao Paolo.
Could it have been different? Possibly, but not likely. That would have required a revolutionary leadership to bury the past, embrace new competition and bridge the chasms of culture blocking change before real, brutal and unforgiving change became inevitable. Like now.