Following GM’s Chapter 11 bankruptcy filing today, the Internet has been flooded with explanations of GM’s decline. Here’s mine…

Nearly everything wrong with GM can be traced to one source: GM’s senior management has long acted as if it should make all important decisions, and that everyone else involved–middle management, workers, suppliers, dealers–should simply execute their orders.

This essentially tossed a lot of product, market, and manufacturing knowledge that, if effectively applied, would have yielded better, cheaper to produce cars.

It also led to zero-sum thinking all around, where all parties felt they were fighting GM’s senior management, and so pushed for as much as they could get.

This was especially the case with the union. Back in the 1950s GM’s leadership and the UAW struck a deal: in exchange of having no say in how the product was made, the UAW would receive high levels of pay and benefits. In recent decades, GM has forced the UAW to make some concessions. These times, the profits that later followed went towards bonuses, dividends, and acquisitions. They did not go into the product. So why should the UAW make concessions?

Real change will come to GM only when its senior executives admit that they need to forge true partnerships with all of the parties involved, with better cars a shared goal. Since bankruptcy is being used to push through a bunch of unilateral decisions, this hasn’t happened yet.