Alright, we’ve got to wake up.

GM’s latest plan is for the federal government to take a majority stake in the company, in exchange for $11.6 billion in new “loans”. That’s in addition to the $15.4 billion the company has already skimmed from taxpayers. That’s over $25 billion government dollars being misappropriated to prop up a doomed private entity. Doesn’t that alarm anyone?

This is nuts.

The government has no business being in the car business, no experience running a major multinational corporation, and lacks even the proper incentives to operate profitably. GM is going to fail one way or another, and the only question is how many of our kids’ dollars they’re going to take with them. It may be fair to say that the government, GM management and the UAW are trying to prevent people from getting hurt, but we’re past that now–people are going to get hurt. The company has been mismanaged for decades, and the executive suite, the UAW and the government are all complicit. GM shareholders assumed this risk when they invested in the company, and their investment has now gone belly up. Too bad.

There will be a flurry of analysis over the next few days about this deal, and the pointy-headed pundits will evaluate it down to the last detail. But the end result is obvious to anyone with common sense: it will flop, and it will take billions and billions of taxpayer dollars with it. The government and the UAW as majority partners in running a giant private enterprise? Does anybody really believe this has a chance of working? Let the market work, let the investors lose their stakes, let the company try to reorganize in bankruptcy court, and let’s get on with it.

In When Growth Stalls I talk about the problems of a loss of focus, a loss of nerve, and a loss of management consensus, all issues with which GM has struggled. But this one tops them all–loss of sanity.

When we conducted our first wave of research into stalled growth among former Inc. 500 companies, we were intrigued to discover how many of them had at one time been pioneers in their industry, which (by definition) gave them 100 percent market share. By the time we fielded our study, however, the average market share of these companies was only 16 percent.

That’s not surprising. As any industry matures, increasing competition will carve it up into smaller and more tightly-focused market segments. Still, it’s no fun to climb to the top only to watch your market share decline year after year (just ask GM).

One of the more notable companies currently struggling with this phenomenon is Nokia, the nearly 150-year-old Finnish corporation that became the global mobile phone leader in 1998. Nokia is one of the most powerful brands in the world and has sold well over one billion mobile devices. That’s a lot of phones.

Alas, it’s hard to stay big. In the past few years, as the economy sputtered and competitors stalked, Nokia’s share of the mobile device market began slipping. It was forced to fight off a bevy of low-cost competitors at the volume-driven bottom of the market and the Blackberry and iPhone phenomena at the margin-driven top. In its recent quarterly earnings release, Nokia reported that its mobile device volume was down 19 percent from last year, while the industry was down only 14 percent. That cost Nokia two points of market share, from 39 percent to 37 percent.

The company does have a lot of cash and new products in the pipeline, but it’s tough to fight a multi-front war. As the industry continues to struggle (Nokia predicts a 10 percent industry volume decline in 2009), the company’s smaller competitors are likely to get even more aggressive, whether out of opportunism or desperation.

Nokia’s strategy, according to internal documents, is built to leverage “scale, brand and service.” It will need all three operating at peak performance to keep from sliding further back as the year plays out.

“S&P Warns on GM, Chrysler Debt”

–The Wall Street Journal

Dell has just launched a new, ultra-thin laptop with a base price of $1,999. It’s sleek. It’s slick. They call it a “luxury laptop,” and John New, director of consumer marketing at Dell, says, “We’re focusing on the fashion.”

Knowing Dell, it’s probably a great product. It’s also a great example of a loss of focus. The Dell brand was built on being quick, dependable, customizable, and affordable. Now it’s about sleek and luxurious too. The company once specialized in serving corporate customers. Now it specializes in the consumer market too. And data centers. And families. And the direct channel. And retail. Oh, and televisions. Did I mention digital cameras? Phones? MP3 players?

Don’t get me wrong. I’ve always been a fan of Dell. But it’s hard to see how a company that used to parallel, say, Toyota, in terms of its product breadth and reliability, can succeed by emulating GM. Not only will the company be hard pressed to maintain leadership in any one product category (let alone several), its identity is getting fuzzier by the day.

I’m not sure what Dell stands for anymore. Trying to be all things to all people usually results in being nothing to no one. Sometimes you can stretch a brand so far it rips.