Profits at GM prove that telecom guys are smarter than car guys

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When I first started in the telecom business I worked for a guy named Charlie Snell. Charlie left General Motors after more than 20 years because he was fed-up. Charlie would regale us at lunch with tales of an environment that stifled any creativity and innovation. This was 25 years ago. I loved cars as much as the next guy, but after a few of Charlie’s stories I was glad to be working in telecom.

Charlie was managing a network upgrade project.  We were upgrading our data links from 9,600 bits per second to 56,000 bits per second. My job was to configure the equipment then travel to remote sites and make sure these high-speed connections were working. Some people in the company objected to this extravagance – claiming that no one would ever need that much bandwidth.

In the 25 years since I worked for Charlie, the telecom industry has changed the world. Billions of people who had never made a phone call now have access to a cell phone. Most people I know have a multi-megabit Internet connection that costs less per month than a tank of gas and a high-speed wireless router that costs about the same as a couple of car washes.  The Blackberry and iPhone I carry in my pocket have more computing power than the data center did when I worked for Charlie. In addition to being great phones, they give me anywhere anytime access the whole world of information and entertainment.

Compare that to the auto industry. The two biggest innovations in 25 years have been windshield wipers that pause, and cup holders. A year ago GM lost $13Billion in the second quarter alone and the vultures were circling. The choice came down to leaving them for dead, or trying something new. Former AT&T CEO Ed Whitacre was brought in and a year later GM posts a $1.3 Billion profit.

Just imagine what could happen if telecom guys ran the auto industry for awhile. Cars would have wireless technology and would talk to each other. Cars could drive themselves around without hitting anything. On the highway they would inform each other about traffic conditions and suggest alternatives. You could get out of your car and it would go refuel itself and then find its own parking space, moving from sun to shade depending on the temperature. If it was time for an oil change, the car would drive itself over to Jiffy Lube and back while you were at work, stopping off to pick-up your dry cleaning. You would send a message to the car as you were getting ready to leave and it would turn on the heat or AC and meet you at the front door.

Having returned GM to profitability, Mr. Whitacre says he’s retiring. The good news is that his successor is another telecom guy, Daniel Akerson. If he brings along more telecom guys we can expect to have flying cars that run on garbage in a few years. I’m going to buy some shares.

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Ken King

1 Comment

  1. michael newkirk on

    To be fair, it would have been much more impressive if Mr. Whitacre had made a profit without benefit of 2/3 of the GM acquired debt being wiped away in bankruptcy. And, the vultures were not circling, they had already landed and eaten most of the carcass and a new animal had arisen out of Chap 11. Let's see in 10 years if they are still around without government intervention..I bet not.

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