Campbell Op-Ed: Entrepreneurs Will Reinvent GM's Castoffs

John Campbell
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Posted: Jun 22, 2009 7:07 PM

IBD Editorials

Entrepreneurs Will Reinvent GM's Castoffs

By Rep. John Campbell | Investor’s Business Daily

Before I lost my mind and entered politics, I was in the car dealership business for 25 years. In fact, I was the first Saturn retailer chosen back in 1988, and served on the Franchise Operations Team. I opened one of the first 25 stores in 1990 and eventually owned and operated five Saturn Facilities in Orange County, Calif.

Saturn was truly an American innovation with a great concept, rethinking how cars had been built and sold over the previous 50 years. But Saturn was an entrepreneurial idea, smothered inside one of the world's biggest nongovernmental bureaucracies.

Saturn needed to move, change and react quickly, but it was prevented from doing so. Even Saturn's breakthrough, one-page union contract was eventually replaced with a standard UAW agreement.

The one area where Saturn remained true to its mission, however, was at its retail-dealer level. These committed independent businessmen and women continued to provide customers with industry-leading levels of care and innovation.

Some became disenchanted with GM and the UAW's lack of commitment to the brand and its ideals and left. But many stayed, and that's what Roger Penske is now buying. He wants an excellent, dedicated and creative dealer body through which to sell and service cars.

Penske is already the distributor in the United States for the Smart car (built by Mercedes), which has demonstrated significant success. He will have the option of having other manufacturers build Saturn branded cars and/or sell other brands with the promise of Saturn treatment and service.

Suppose an upstart electric car company wanted national distribution for its cars — perhaps Saturn would be a good place to get that? Or suppose Peugeot, Renault or other foreign automakers wanted back in the U.S. market, Saturn stores could prove to be a ready and willing conduit.

This sort of "Best Buy" of car retailing, or "contract manufacturing" instead of a company owning the plants that build its cars, is a new and untried concept in the car business. It's risky, but it just might work. That's what entrepreneurs do. They take risks to create something new. Sometimes they succeed. Sometimes they fail.

Saturn can work in the Penske organization. There is no question that it won't be the American-built small car company it set out to be, but it may fulfill the second part of its mission, redesigning how cars are built, sold and serviced. It clearly wasn't working within the GM-UAW structure, and the Obama-UAW bureaucracy now running GM will undoubtedly be many times worse.

Hummer, Opel, Saab, and Chrysler's Viper are all in the process of being sold to smaller, more nimble companies in North America and elsewhere. These troubled brands now have hope when freed from the costs, obligations, arrogance and structure of GM, nationalization and the union's intransigence.

General Motors has been nationalized and is a pawn of the state and the UAW; this will only postpone its inevitable demise. GM as we knew it is gone. The melancholy about the collapse of this great symbol of American manufacturing has permeated through to America's core.

But GM lasted over 100 years. That's actually not bad in a world where technologies and competition change as fast as they do today. How many other companies from 1908 can you think of that are still around today? This is not a failure of American business, but rather a piece of history that is a shining example of American industry for over 100 years.

The fact that GM didn't make it to the 200-year mark is a testimony to free markets and free choice that punish companies that do not change and reward better and fresher ideas. It was a great company once. But time has now passed.

Today, parts of that once great industrial behemoth have a new lease on life with their new smaller owners, and someday, someone will probably take over Chevrolet and Cadillac, revitalizing two of the world's great brands. This is what happens after companies are freed from suffocating government, politicization and bureaucracy.

The story of the American automobile and the American entrepreneur is far from over. The automobile has been a symbol of American independence and freedom since Henry Ford first wheeled the Model T off the production line in 1908, and personal transportation is part of the American ethos. It allows us to go wherever we want, whenever we want without restriction.

The Obama-Pelosi cabal would like us to get out of cars as part of their quest to make us conform to the behaviors that they believe we should have. That won't work. Americans love freedom too much.

The companies will be different, the names will be different, and how cars are powered will be different. But America's love affair with the automobile and its role reinventing it is not over yet.

Put your foot to the floor and enjoy the drive.


Campbell is a second-term congressman representing California's 48th district.