What GM Can Learn from IBM

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Why the muted enthusiasm? Battery-charging stations. This is the problem that Henry Ford faced in 1914, when gasoline filling stations were few and far between. Ford's solution was to sell his Model T at such a low price that consumers were willing to buy gas by the gallon in grocery stores. It took 20 years for a third-party (oil companies) to build filling stations by the thousands to meet the demand for gasoline generated by Model Ts.

GM doesn't have 20 years to turn itself around, of course, but it may not need that many. Recently an Israeli company called A Better Place has captured a lot of attention with a visionary strategy of building a network of quick-charge stations for city travel and battery-changing stations for longer trips. The company has already embarked on prototype stations in Israel, Denmark, Japan, and other places and has signed a deal with the affiliated automobile companies Renault (RENA.PA) and Nissan Motor (NSANY).

To date, GM has shown no interest in the concept, a response that led New York Times columnist Thomas Friedman to lament that bailing out Detroit struck him as similar to "pouring billions of dollars into improving typewriters on the eve of the birth of the PC and the Internet."

The Need for Electric-Auto Infrastructure

GM mentions in its report to Treasury that it is increasing its investment in electric-vehicle battery development, with more than 1,000 engineers and technicians directly involved. Dreams of breakthroughs in battery capacity are nothing new, of course: A century ago, Thomas Edison tried to develop a vehicular battery that could be charged in a few minutes and fit inside a suitcase. GM's thousand engineers and technicians notwithstanding, a major advance in something as thoroughly familiar as electrochemistry is likely to prove as elusive today as it was for America's greatest inventor. Hopefully, GM does not envision its future in electric automobiles as wholly dependent on spectacular breakthroughs in battery performance.

Meanwhile, GM's rejection to date of any major role for itself in building and running something far less elusive—the infrastructure for mass electric-automobile travel—is all too reminiscent of IBM's brush with death. Back then, IBM refused to give up the one thing that was dragging it down—a mindset stuck on products; then Gerstner came along, and IBM embarked in a big way on selling services by the hour.

The auto industry is at a crossroads today similar to the one the tech sector confronted in the early days of the Web. One suspects that GM's future will depend on its ability to sell Volts not only in showrooms but by the mile. Hopefully, it will come to realize this before the patience of the American taxpayer runs out.

Cook is emeritus professor of marketing strategy at Tulane University's Freeman School of Business.