Tuesday, November 22, 2005

General Motors And The Tribune Co., Both Slipping

The lead story in the L.A. Times this morning reports that General Motors is going to close 12 plants and reduce the number of its workers by 30,000.

Meanwhile, the New York Times yesterday reported that Google is going to compete with the newspapers, it predicts quite effectively, for classified ads.

The NYT remarks, "Google Base could take a bigger toll on local and regional newspapers. So far, those papers have managed to maintain their connection between their readers and the goods and services in the same market. By allowing its audience to customize content and post it for free (all the while selling ads against the audience that information aggregates), Google could all but wipe out the middle man, which could be your friendly neighborhood daily paper.

At the same time, Toyota is moving up and General MOtors decidedly down.

The bottom line is that both GM and the Tribune Co., for now owner of the LAT, are in crisis. The executives of both companies have failed to keep their eye on the future. They've failed to compete successfully, although, if they were smart, they could compete. They're in many respects doing in their skilled work forces, through buyouts and layoffs, forgetting their obligations to them as part of work communities.

The answer for GM is to start producing the kind of vehicles Americans want. And one answer for the newspapers is to start competing on the Web, which most have scarcely done. A really visionary L.A. Times would widen distribution, not perhaps to the New York Times level of a full national distribution, but certainly in California and the West. Money spent on distribution today would result in circulation and advertising tomorrow.

I got a comment on yesterday's blog, noting that the L.A. Times had only a 12-page First Section yesterday.

Someone identifing him or herself as a "former UPI Reporter/Editor," wrote, "It is sad what is happening to the L.A. Times. It's even worse that such an important city as Los Angeles has two poor newspapers (Times/Daily News). Only 12 pages today, is why I've decided to cancel my subscript to the newspaper, and go with the NY Times. To use the Chicago Tribune as a standard for what to achieve is also sad. Who will step up and buy the L.A. Times and save us from the Tribune Co?"

Well, to reply, my new subscription bill finally arrived from the L.A. Times yesterday and through April 28, the charge is only $44.80. The New York Times, good as it is, is going to cost me hundreds of dollars during the same period.

If the L.A. Times keeps its foreign staff, revitalizes its editorial pages, and somehow contrives to get out from under the Chicago losers, not all is lost. I challenge any evaluation that the LAT is a "poor" paper. Not yet. This blog is being written with the aim of preventing it from becoming one.

I feel fairly confident General Motors will figure out how to bring itself back into America's good graces, just as Chrysler has done. That's why I continue to invest in GM.

But, as LAT auto writer Dan Neil once wrote, it may take new leadership at GM.

There's no hope for the Tribune. They should sell out -- now. Californians should own the L.A. Times.


Anonymous Anonymous said...

Wow Ken, your thoughtful and thorough approach to investing matches perfectly with your insightful and informed political commentary. Bravo!

11/23/2005 3:16 PM  

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