GM and GE: The importance of staying relevant

by Diane Wilson

Poor, poor, poor GM, which as of Tuesday had a market cap of $690-million, making it the littlest company in the Dow Jones Industrial Average, according to The Globe and Mail. I am mixing apples and oranges but you'll get the point when I tell you that Canada's own George Weston announced sales of $34 billion and earnings of nearly one billion and yet, many people could not tell you what that company does. Weston has a market cap in excess of $8 billion.

It would appear that GM may be turning out the lights now that its executives have been busy dumping their stock in the company, sending shares to $1.09, a level last seen in 1933. This is the company whose products your parents really, really wanted. This is the company, that save for a short stint, has occupied a prestigious spot in the Dow. How many people dreamt of Cadillacs and Camaros and Firebirds? Lots. This was definitely the top car maker, as anybody who grew up on Pontiac Parisiennes while aspiring to Sedan deVilles will tell you. The moment -- the very moment -- that a person had achieved the latter meant that he had arrived. (This was more of a he thing than a she thing, back then.) It was not a debt ridden moment but a signature event in the life of an individual because Cadillac was the very hallmark of wealth and success.

So the Dow is going to soldier on in all likelihood without GM. General Electric will now be the lone link to the past because GE is the only original component of the Dow, dating its inclusion to 1896. It will be interesting to see where the Average meanders over the next few years by way of components. It was exciting when Intel and Microsoft were added because it indicated tech was more than a passing fad. Perhaps the Dow will go for a biotech next?

The Dow provides a nice reading of America and progress. It is at once a graveyard for companies that fail to adapt and a prism through which to analyze corporate success.I am going to toast Thomas Edison's General Electric, and congratulate Jeff Immelt for keeping his company relevant 119 years later, as he has built up infrastructure and wind energy and medical technology and water treatment, and tossed out the old. As Immelt and others were redefining their companies, what the heck was going through the minds of execs at GM? I would really love to know.