However, it was the people with decades of business experience that got us where we are today. So, exactly what good is this experience that everyone needs it.
I don't mind smart people with limited relevant experience having opinions or even defending them vigorously. However three passages in particular struck me:
Mr. Deese was not the only one favoring the Fiat deal, but his lengthy memorandum on how liquidation would increase Medicaid costs, unemployment insurance and municipal bankruptcies ended the debate.
Every time Mr. Deese ran the numbers on G.M. and Chrysler, he came back with the now-obvious conclusion that neither was a viable business, and that their plans to revive themselves did not address the erosion of their revenues.
How is he drawing his conclusions? Does he really have a deep enough understanding of the underlying model when he 'runs the numbers'?
From there, he can make it quickly to the press office to help devise explanations for why taxpayers are spending more than $50 billion on what polls show is a very unpopular bailout of the auto industry.
I'm sure the NYT is not giving us the whole story, but there's a piece of me that worries that what makes this guy successful is not intelligence (though he certainly may be smart) but charisma. Just because you can sling a good presentation / memorandum and speak eloquently about it does not mean you should be setting critical government policy about tremendously complex problems.
Just as in any other field, there are those with experience that are good at their jobs and those that are bad at them. This does not mean that someone with no experience should be hired to do the job.
In this case though, the job to be done is one that noone has experience doing. Putting an operation like GM into receivership is unprecedented.
And expecting experience in the face of unprecedented events that require restructuring the old order is somewhat counterproductive. You do not want someone who is determined to save certain features of the old order merely because that is what they understand; what is needed is someone who is comfortable mediating the different forces at work and discovering workable approximations of the new order that minimise the damage overall.
High finance is different from business experience. Yes the two worlds cross-pollinate, but by and large they are not the same. In some ways, it is like software development and IT. I contend that it is the people who did not learn the lessons of the past that were more likely to decide to become over-leveraged (let alone the massive pressure to do so as it seemed to be working for everyone else.) I presume (baselessly) that the appreciation for experience and history is something that is cultivated and evolves over the length of a person's career.
That being said, adaptable and intelligent people should be able to pick up on business decisions relatively quickly if they are given adequate support staff.
And this is the auto industry. Their bad decisions based on their vaunted experience has led them to the situation they face now.
Experience didn't save them. Hell on the other side, experience didn't make Toyota the company it is now (although they did recently post a loss, they are hardly in GM's position). Willingness to disregard that experience and try something that made sense did.
Years of experience is a poor indicator of success.
Experience did make Toyota the company it is now. If you read about LEAN, it is all about learning from what you do, and performing constant variation to see if you can do things better. it is NOT about "disregarding that experience."
The present shape of the auto industry is complex, and not simply attributable to the hubris of its leaders. The outsourcing of parts manufacturing, a labour union that is too strong, a lack of funding for attractive design, a government that offered too many protections, and last but not least, the entitlement culture of the american auto industry.
The American auto industry was not competitive. I am not suggesting it was easy to make money, I am suggesting that we simply did not keep up the hunger for "new & better". To say that is merely the product of age and experience is foolhardy at best.
The change to LEAN and JIT production was a radical new way to produce cars. That's what I meant by disregarding experience, not that they are completely fly by the seat of their pants all the time. They completely revamped what it meant to be an automobile manufacturer by trying a new process they had no experience with. They realized experience isn't a goal in and of itself and that sometimes it can be a hindrance.
When the driver of a race car has a terrible accident, it isn't a sign that someone with less experience would have successfully avoided the crash at that speed.
