Can the king's horses - the White House Auto Task Force - and it's men, including new Chairman Ed Whitacre, ever put GM's Humpty Dumpty back together again?

…and all the king’s horses, and all the king’s men, couldn’t put Humpty Dumpty back together again.

Was Humpty Dumpty a cannon used in the siege of Colchester, in 1648, the hunchbacked King Richard III, or Prince Humperdink of Romania?  Exactly how that nursery rhyme came to be, and who it refers to, is one of life’s little mysteries.  But in modern times, you might better apply the name to General Motors, which was forced to declare Chapter 11 bankruptcy in the hopes of putting things back together again.

This Humpty Dumpty’s fall was an agonizingly slow one.  When I first started covering the auto industry, back in the late 1970s, GM still controlled nearly half the U.S. market – it held roughly the same market share, in fact, as the Big Three collectively do today.  But each year, point by point, GM began to teeter and totter.  To many, it was just a question of timing as to when this corporate egg would lay splattered on the pavement.

Barring some unexpected setback, the 101-year-old company won’t wind up as an omelet.  In two days of hearings, earlier this week, GM and government officials repeatedly stated their goal of pulling off a so-called “363 Sale,” a move that would effectively ditch the old company’s debt and unwanted baggage, creating a leaner, more efficient “new GM.”

The target date is still July 10th and, in fact, the Obama White House is reserving the right to pull the plug if the bankruptcy process goes beyond then, though few expect that would happen if things stretch out a few more days.

But while the president’s Automotive Task Force is scooping up the yolk of this broken egg, GM certainly won’t resemble the Humpty Dumpty that long sat atop all its competitors.  Only four of the old eight North American brands will survive.  Three – including Hummer, Saturn and Saab – are being sold off, while Pontiac, the fourth, will be shuttered and abandoned.  GM, meanwhile, is selling off a majority stake in its huge, German-based subsidiary, Opel.  And, as CEO Fritz Henderson told TheDetroitBureau.com, in a Q&A, last week, “We’ll be operating in a power-sharing environment,” where others might very well be calling the tune that GM will have to dance to.

At least, that’s the way the scenario seems to be playing out.  But will GM be happy to be just another player fighting for its share of the industry’s spoils and scraps?  Or does it have a longer-term vision that might, in fact, be aimed at eventually putting Humpty Dumpty back together again?

That’s a question that several sources have raised with me, in recent weeks, since news broke that Edward Whitacre, Jr., was coming onboard as General Motors’ new Chairman.  The onetime engineer is a driven man, as he proved during his long tenure at SBC, the one-time “Baby Bell” that pulled off the seemingly impossible, reassembling various bits and pieces of the U.S. telecommunications system back into AT&T.

True, it’s not the monolithic phone company that existed before a court-ordered break-up, several decades ago, but neither is the “new” AT&T just one among equal spin-offs.  What Whitacre stitched back together is a leaner and more efficient company than the old Ma Bell, but it’s also the real power in the American telecomm business, today.

Was that one of the reasons that the White House was attracted to Whitacre, who has pointedly noted he has zero experience in, and relatively knowledge of, the automotive industry?  Is his primary goal to pull the old GM back together?

Actually, that’s neither likely nor logical.  The grandeloquent giant pieced together by Billy Durant, nearly a century ago, and then melded into a profitable enterprise by the legendary Alfred P. Sloan, reached its zenith in the late 1950s and early 1960s.  Then it began to believe its own press clippings.  By the 1980s, former Chairman Roger Smith sensed that change was needed, but in his heart, he was convinced that GM was essentially infallible.  All it had to do was toss out a few billion here, a few more there, and all its problems would vanish.

Even CEO Rick Wagoner, ousted, in March, when it became apparent Chapter 11 was the only option, couldn’t truly believe that GM might fail.  Despite all the cuts made during his tenure, Wagoner also kept trying to expand the automaker, inking a number of alliances with players like Fiat and Subaru – virtually all of which failed, by the way.

So, don’t expect to see Whitacre rush out and buy up a few more troubled brands.  GM is better off without Saab and Hummer.  Saturn, well, that once-promising marque is just a victim of 20 years of mis-management.

But Opel?  It’s interesting to note why talks with Magna have stalled.  A month ago, it appeared the Canadian supplier and its Russian partner, Sberbank, were set to take majority control of the German operation.  But suddenly, that deal is up in the air and several other bidders have re-emerged.  According to numerous sources and printed reports, a key snag is that GM is demanding the right to be able to repurchase Opel, or at least a majority stake, once its finances are back in order.

Yes, as Henderson told TheDetroitBureau, there are some very good partnerships, and you don’t always need to be calling the shots.  But in an industry that’s almost certain to undergo more attrition, it’s risky to leave your fate up to others who may have a conflicting agenda.

The Chapter 11 process is teaching GM a much-needed lesson: simply being big isn’t always a good thing.  There are good assets – which will be transferred to the “new” GM – and bad ones, which will sold off or closed.  Going forward, Whitacre and the slimmed-down General Motors management team will need to be much more careful in what they wish for, but it’s very likely that if they can staunch the bleeding, stabilize share and rebuild their financial war chest, they very well could try to rebuild GM into a global powerhouse, again, rather than just another mid-size manufacturer.