Up today: General Motors.
This one actually would make a whole lot more sense that buying Sprint. GM is a product company, although arguably it's two companies - a concept company and a production company and never the twain shall meet.
GM, like so many automakers has come out with some astounding and beautiful creations, but somehow, the trip between the concept group and the production side of the house seems to involve a round trip to Mars, followed by passing the plans through a shredder, taping them back together, losing them, finding them in the compost heap, peeling off the tape and deducing from the traces left on the tape the original plans.
From a strict asset point of view, GM is a great deal for someone who wants to buy it and sell off the assets at the current market valuation of $2B. But GM needs a lot of things right now first and foremost, cash. That's something that Apple could certainly help with, but given GM's current burn rate (close to $7B), I'm not sure that the purchase would be a good thing given the rest of the economic climate.
Automobiles are a necessity for many americans, but are also a luxury purchase in many ways. Given the economic slump, new cars are going to be pushed to the bottom of people's shopping lists. From an investment point of view, putting money into a local garage is probably a better bet. People are going to be doing everything they can to keep their current car running longer rather than get tied into a loan for a new car.
However, there are a lot of similarities between Apple just before Jobs arrived, and GM today. Both bleeding cash left and right, with no real sense of direction and a ridiculously scattered product lineup that doesn't match consumer expectations or needs. Or more precisely, is trying to be everything to everyone. 95 individual models in the US market alone! That's insane. Plus there's Opel and Vauxhall in Europe which add another 32 models.
GM also desperately needs help in making the migration to newer environmentally friendly technologies, similar to Apple's migration away from OS9 to a modern multi-tasking OS.
I don't know if GM would be a good investment for Apple, but I would definitely say that GM desperately needs to do exactly what Jobs did at Apple upon retaking the reins:
- Pick a core fleet of products and get rid of everything else. Sell them or kill them, but focus on something
- Identify a growing market as the key to moving forward. That would be hybrids or all electric, but pick one and run with it. Distraction is the killer.
- Learn the mantra "real artists ship". Concepts should be built with an eye towards production.
- Get an identity. 11 brands and over 100 models is just too much.
GM also has a whole slew of other issues to deal with involving their current union structures and pension plans, of which I know very little, but would definitely have an impact on any purchase or investment.
I think that Jobs has the intellectual capacity and management rigor necessary to put GM back in the black, but it seems to me that this would be an unnecessary distraction for him while trying to navigate some very difficult economic times. On the other hand, this just might be the perfect opportunity to see how Apple's management team handles things while Jobs is busy elsewhere, but not out of the loop.
Answer - not sure if it's a good idea, but it would certainly be interesting...