CONC: flash-based notebooks

Flash drives will make hard-drives obsolete.

CONC: GM bankruptcy is a good thing.

In response to a post on The Truth About Cars

re: A Rose by Any Other Name

Mr. Farago,

Neither you or I hold an M.B.A., but we can still discuss business
qualitatively. Any pundit (including you or I) knows that GM and Ford
need to make more desirable cars. But it's a tricky business
proposition when one has high fixed costs like too many factories,
overpaid laborers and overpaid retirees.

It is that it relatively easy for other companies to have niche
successes compared to GM and Ford. Murano: success! Mini-cooper:
success! xB: success! Let's say, hypothetically, that GM engineered,
manufactured, and marketed the entire BMW line-up. It would be a
colossal failure. GM would be bankrupt withiin a week (rather than in
a few years).

The fact of the matter is that the Chevy Cobalt, which is relatively
cheap, solid, pleasant, and bland will sells more units than BMW's
entire line-up for the simple reason that there are many more
mainstream car buyers than there are well-heeled driving enthusiasts.

My point is that GM is in a terrible position. In order to make more
desirable cars to various consumer niches they would have to make
smaller runs of cars. No can do.
If they continue to make bland M.O.R. cars, their market share will
continue to slide because of all the niche cars nibbling at the edges.

Basically I take issue with your simplistic assumption that by
engineering better, more refined cars, more differentiated cars GM
and Ford will sell more cars / make more money.
The fact is that the scale of GM's car sales are (still) so mind
boggling that I think they have no where to go and are trapped by
their cost-structure. If they make cheaper, shoddier cars, their
sales will obviously slide. Less obviously, if GM upgrades their cars
and charges a corresponding premium for those improvements, their
sales will also slide! And if they are selling nicer cars at a
premium, but tens of thousands or hundreds of thousands fewer units,
they can't possibly pay for all their fixed costs.

The question isn't even "what should GM do?" it is "what can GM do?"

again, I'm not an MBA so I don't know exactly what bankruptcy allows
for. But if it allows wholesale liquidation of factories and allows
them to layoff AND stop paying about 15% of their assembly line
workers, then that may very well be the best thing that they can do.