Fourth, the company acquired its cost reduction

Fourth, the company acquired its cost reduction capabilities expensively. For instance, GM became interested in what more modern computing management could do for the company, and purchased Electronic Data Systems while it was headed by H. Ross Perot.

Now, would EDS have been willing to take on GM as a customer without being purchased by GM? Probably, because having GM would have been a bonanza, more than doubling EDS's revenues and profits. GM's investment in EDS probably yielded no more benefit to the company than what any other customer would have received, until MBT Panda Sandals,a portion of the company's shares in EDS were used to pay auto worker retirement benefits in recent years. In fact, knowing that the GM business was not a "lock" might have led EDS to perform even better for GM.

Fifth, the company was slow to make structural changes in its ways of operating that would permit GM to shift its business model. Despite much hand-wringing about its high-cost parts operations, the company waited many years before making those activities independent of GM. The company also had problems with Oldsmobile for MBT Habari Sandals, many years before announcing a decision to suspend production of that automobile brand.