General Motors bankruptcy

"They earned it." Parallel to the steel-company bankruptcies of the 1980s. GM's $50 billion plant-and-equipment budget in the 1980s could have bought Toyota outright on the Tokyo exchange. GM bountied robots-for-people while Toyota developed the Toyota Production System.

There was a lot of nepotism — not necessarily family nepotism, but people scratching each other's backs. When you got into management in the steel companies, they were pretty corrupt. In the 1930s, Bethlehem Steel had six of the top ten paid executives in the United States working for Bethlehem Steel, and Eugene Grace, who ran Bethlehem Steel through the '30s and '40s, got paid a bonus on every ton produced. Even though during the Depression Bethlehem was losing money, he got paid a bonus for every ton produced. Whether they were making money or losing money, he made a fortune. People just kind of accepted this as the way it was with management. A lot of these companies like Bethlehem went bankrupt a few years later in the '80s. When General Motors went bankrupt and someone asked, well, what do you think about General Motors' bankruptcy, my comment was, well, they earned it. The steel companies earned the bankruptcies they went through. There's a lot of arrogance.

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