General Motors is about to report a massive sales decline for the month of March. GM’s management will acknowledge the loss, blame it on the general downturn in the U.S. new car market, point to a few successful models and move on. Later, the American automaker will report it’s burned over a billion dollars in the last financial quarter. GM’s management will blame the market downturn (again) and the strike at American Axle. The top brass will admit that GM’s turnaround is… delayed. But at no point will they accept responsibility for their plight. Well, why would they?
If I’ve said it once, I’ve said it 169 times: GM’s corporate culture lacks accountability. Despite the fact that the scoreboard clearly shows that the automaker is receiving a dramatic drubbing at the hands of any number of fitter, better and stronger competitors, no one at the top level is willing to step up to the plate. No one takes responsibility for missed opportunities (dozens of vehicles dying on the vine), flawed strategy (FOUR Lambda-based crossovers?) and blatant screw-ups (Fiatsco?). The company is populated by Teflon suits.
In this, of course, GM is not alone. You could make an excellent case that The General’s generals operate under the same CYA mandate that insulates our elected representatives from their failures and broken promises. You could also argue that GM suits suffer from the same misguided and inherently self-destructive sense of entitlement that characterizes America’s political pressure groups. I’m not saying our culture of blame is to blame for GM’s blame-free culture. But the automaker’s attitude reminds me of nothing so much as my local, all-powerful teacher’s union.
Like the Rhode Island Federation of Teachers and Health Professionals, GM’s upper management truly believes that everything they do is for the greater good. Their real mission: consolidate their power; protecting jobs is job one. Though both groups pay lip service to the “end user,” neither is willing to live or die by any qualitative metric. And both depend on PR and spin for their survival, without any real understanding that their actions– and inaction– create an unending stream of mediocrity.
For decades, industry analysts have blamed the United Auto Workers Union (UAW) for their employer’s lousy margins and poor product quality. (Read Arthur Hailey’s Wheels’ for the historical correlation between union members’ imperviousness to dismissal and GM’s crap cars.) Although robots have largely solved the product quality problem, the worker-biased (not-to-say empowering) grievance procedures remain– and continue to prevent substantive progress on the factory floor. But this union power pales in comparison to GM management’s unassailable, like-minded brotherhood.
Did I say like-minded? Perhaps cookie-cutter would be a better term. GM CEO Rick Wagoner is a lifer who rose to the top through the GM’s accounting department; moving from Chief Financial Officer to Chief Operating Officer to CEO. His hand-picked successor, freshly-minted COO Fritz Henderson, was also a GM lifer who also rose to the top via the accounting department; and also attained the position of Chief Financial Officer. Career doppelgangers at the pinnacle of power at GM? How much more inbred– and insular– can a company get?
Is there any surprise that GM has eight brands stuffed with badge-engineered products when its executive roster is filled with badge-engineered executives? I’m serious. Uniformity of management leads to uniformity of decisions leads to uniformity of product. When all the people in charge are all asking the same questions, they’re all going to get the same answers. And the same answers lead to the same decisions which lead to the same results, again and again.
Here’s the thing. GM has finally woken-up to the crisis of their own creation. They now have that “sense of urgency” that analyst Mary-Ann Keller called for several years ago (when the excrement was striking the wind generator). As a result, Rick Wagoner’s mob are doing what they’ve always done– only faster. Their (tail-chasing) downsizing effort is accelerating. Their product cadence is quicker (thanks to re-badged imports). Their PR department's launching new ad campaigns and slogans at an even more furious clip. It’s more haste, less speed.
Ford and Chrysler hired outsiders to reverse their sinking fortunes. Whether or not Alan Mulally or Bob Nardelli has enough time and/or expertise to save the domestic automakers from oblivion is an open question. But at least FoMoCo and ChryCo are trying something new. GM is still ruled by the same man who sees no problem having a bankruptcy-proof pension while asking his workers to take a hit for the team to avoid bankruptcy.
Of course, there will be a reckoning. While the teachers’ union can still use their political muscle to maintain power, GM’s management has lost touch with (and sight of) its constituency: its customers. The "base" has left, and they’re not coming back. No one within GM management may take responsibility for this loss, but they are all to blame.
Good Lord, this is so true. GM’s stuck in a vicious cycle. Too bad for the workers and the history-laden nameplates. The executives are only reaping what they’ve sowed.
The Board of Bystanders allow this to be – they are also inbred in the same fashion and live in a glass house with their golf buddies. There is no check / balance for GM upper management just bonuses and company paid perks. When you job has no objectives to measure against you can never fail and always succeed as your friends are only those who measure you.
Aside from poor upper management, how long can the Detroit three continue to dump millions into motor sports of any sort? They all keep losing billions year after year, but pump all sorts of money into motor sports in the guise of advertising.
Anybody out there want to either take a chance on GM Hybrid electric technology or Toyota’s? Anyone think the Volt is a good investment? Remember the headgaskets, trnsmissions, and the recalls for brake?
Who paid for those debacles? The bad news is they are the same crew running it today.
The Union is in a tough spot. They share some blame but in the end they proposed a deal and GM took it. Why not spend the money if it is offered?
What, no fleet dump in March? They seemed to be done the prior 2 months, and maximized the appearance of sales gains when the market and competitors went down.
The funny thing is, we’ve seen this all before in Nissan, prior to Renault buying a stake.
They had an acension policy of “the longer you serve, the more you’ll advance”. This led to an inbred management (which, in turn, led to an inbred product and company) and, dare I say it, a modicum of complacency.
Then, Carlos Ghosn came along and turned the company upside down. This meant severing keiretsu (keiretsu is actually a good idea, providing it’s managed correct, see Toyota), culling management and bringing in fresh people (thus, bringing fresh ideas) and turning the company’s thinking and culture on it’s head. In short, Ghosn re-invented the company.
GM needs this kind of shake up, but I strongly doubt it will ever happen. Until the board of directors (BOD) or the shareholders revolt and say “We want Rick Wagoner out and new management put in!”, GM will carry on down this road. Why shouldn’t they? Rick (for all his faults) truly believes what he is doing is right (he is a professional, remember!) and while the BOD back him, why should he think any differently?
I must admit, GM have made some bizarre decisions, the FIATsco springs to mind. If a lower level manager caused the company a 1/5th of that $2 billion, they’d have been sacked (incidentally, that $2 billion that GM “gave” FIAT was what financed their turnaround!).
In conclusion, GM need a shake up from the roots. They need fresh management and a new perspective. They need a Carlos Ghosn or a Lee Ioacoca. What they have are the Marx Brothers. But while GM needs turning around, Rick Wagoner is still thinking about his career, that’s why he fended off the “Renault-Nissan” attack. He wants to be the one to save GM, even if, clearly, he’s not doing the job. Even, William Ford stepped down to make way for Alan Mulally.
There’s an old Chinese saying which I think GM’s management need to heed:
“Society would advance a lot quicker if people didn’t worry about who got the credit”.
Needless to say, Toyota figured this out a long time ago……..*
* = When Fujio Cho retired as CEO (but stayed on as president), Aiko Toyoda wanted to become the next CEO of Toyota. But it was decided by the BOD and upper management, that he was too young and inexperienced. So, Katsuaki Watanabe, got the job and Aiko Toyoda is being groomed to take over after Katsuaki Watanabe’s tenure is over. They did what was best for the company, not what was best for their careers.
In this, of course, GM is not alone. You could make an excellent case that The General’s generals operate under the same CYA mandate that insulates our elected representatives from their failures and broken promises.
I think you’ve hit upon the crux of the problem; it is not just GM, but some general management disease in the U.S. in which those who take responsibility are buried by those who avoid it. Thus there is always lots of action, but not much to show for it. The efforts which could go to actually doing something are consistently replaced with actions to make it appear that something is being done, and that illusion has become more important than the act.
One might attribute this phenomenon literally to the growth of image consciousness brought on by film and television. What we see is not real, but has the appearance of reality, so we begin to accept the illusion as fact.
Nonetheless, it’s very sad that all three of our once-great automobile manufacturers are circling the drain and there is virtually no discussion about this at a leadership level. And with the exception of tiny splinter groups, like TTAC, the majority of the populace goes about their daily lives thinking that the America they grew up in will just keep plugging along, because it did so in the past.
Thanks, Robert and keep singing. Some of us are listening!
Classic definition of doing the same things over and over and but expecting different results ….
GM’s management will acknowledge the loss, blame it on the general downturn in the U.S. new car market, point to a few successful models and move on. … GM’s management will blame the market downturn (again) and the strike at American Axle..
I always wonder about the excuse du jour (or du saison) in this business. Historically, and across all brands, sales drop after Christmas through late winter /early spring.
If anybody has really good access to archives, what explanations have been used for the Feb. and Mar. sales drops over the last ten years by GM or anyone else? Might make some entertaining reading.
/JT
The problem is that the people with the real power to change things have no interest in doing so. Wagoner and the board are doing just fine riding the company into the dust. The shareholders can just sell and walk away. So how about we pass a law preventing sale of stock for 5 years. This would give shareholders some incentive to wake the hell up, and dump the board with Wagoner the first to go. Otherwise I’m afraid we’ll have to just keep hoping that lightning strikes. Why would anyone buy this stock; now or for the last ten years? Maybe they believe in miracles. It would be interesting to see a breakout of shareholders by type; large pension funds, individuals, etc. I just can’t believe anybody with an ounce of smarts about the car business, or business of any kind would touch it.
RF:With out a doubt the best and the most acurate Death Watch ever You have captured in words what many of us less literate and elequent hourly workers have known for years.
The sense of urgency that you write of,stops dead after it reaches about 2 levels above me and I’m at the bottom.
I’ll say again as one of your harshest critics,
!well done!
Michael
I have no idea as to what GM will report as sales figures for March. What I CAN tell you as a member of a sales force at a GM dealership selling Buick, Pontiac, GMC and also having a Cadillac franchise is that we were very busy and will have an excellent month. Also, friends at a nearby Chevy store tell me they were very busy as well.
I think you’ve hit upon the crux of the problem; it is not just GM, but some general management disease in the U.S. in which those who take responsibility are buried by those who avoid it. Thus there is always lots of action, but not much to show for it. The efforts which could go to actually doing something are consistently replaced with actions to make it appear that something is being done, and that illusion has become more important than the act.
I wanted to repeat edgett’s first paragraph because it is 100% true in this day and age. I do this as one of the guys who constantly volunteers or is forced to take responsibility for others. It is also true these individuals are typically totally unable to distinguish between activity and effectiveness.
Let’s remember that the Fiatsco happened over a 1986 GM decision to not spend $110 million dollars developing a small Diesel engine for Europe and instead used that money to pump up executive bonuses. They thought that Diesel engines in Europe were a fad.
Where have we heard this before, or rather, since?
The top level management compensation and insulation from risk that can be seen across industries is truly sickening. Check the $10M payout to the CEO of Countrywide Bank, one of the architects of the current housing crisis and I can’t wait to see what the upper echelon of Bear Sterns pulls in this year. The amount of greed it takes to ask everyone to sacrifice, or to cost them their whole life’s savings, while they hoard more money than could ever be spent is stupefying.
It is up to investors and customers to put an end to this. Accountability from these people has to be demanded.
guyincognito: It is up to investors and customers to put an end to this. Accountability from these people has to be demanded.
Not to be a gigantic cynic, but I’m not holding my breath.
Nothing short of a depression will wake the masses to this problem. There are plenty who’d rather sweep this under the rug. Or even worse, truly believe that C-level Execs deserve such salaries/benefits in times of financial crisis.
It is up to investors and customers to put an end to this. Accountability from these people has to be demanded.
The customers don’t need to care. They have plenty of other choices, and they’re buying them.
The investors need to push the board into action. What’s needed is a prominent shareholder who can impose changes on them. Although Kirk Kerkorian tried that, and we can see how far he got.
Not to disagree with the maint point of the article (that GM needs new blood at the top, along with a healthy does of accountability), but when the article says that GM will experience a “massive” decline – exactly HOW big is massive?
And isn’t every auto maker hurting right now? This is a down market for everyone. Again, I understand that GM can not bear a downturn as well as Toyota, but I highly doubt that it will be the only one to show a big year-to-year decline in sales for March.
Also – don’t automakers formally tally fleet sales on a quarterly basis? Will we be able to determine exactly what percentage of GM’s (and everyone else’s) output is going to fleet customers?
Spot on.
Leadership=Destiny
Ford has a chance w/ Mullaly (and to his credit he does not pretend he can work magic).
You’re exactly correct, simply doing the same thing faster will not change the results, perhaps just speed their arrival.
Wasn’t Al Einstien that proposed the insanity definition “doing the same thing again and expecting different results”.
I don’t WANT GM to go under. I’ve been through a lay-off from a floundering company myself and feel for those in this mess. But I currently THINK they are still headed that way.
The “Turnaround” is proving to be the myth many of us thought from the beginning.
So…if GM does actually pack it in – and become something akin to what has happened to many other auto brands (bought by Tata perhaps??)- many have said what a disaster it would be for the economy. But if other makers step in and produce better products – with plants in more or less the same geography (sorry Flint – you’re still out), then what happens?
Certainly long seniority autoworkers making top dollar will be out – but certainly they must realize by now they are in serious jeopardy. The executives seem to be well insulated. As a customer who used to have ONLY big three products in my driveway, I now have none and am happy about it, so the customer doesn’t lose.
So it all comes down to investors.
By now, General Motors stocks should not be held in as a high regards as they used to so the wise investor should have bailed somewhat by now. So what’s the problem??
I thought that when GM announced the new CEO would be ANOTHER COO, you could go ahead and end the DW series. It is over. Seriously, what GM needs is a product obsessive/market driven guru, what they will get is another in a long line of widget managers. GM got confused decades ago when the line about “in the business of making money not cars” started getting taken as the gospel so that one could essentially forget about cars entirely. No one wanted to admit the truth, that cars were what made the money. That and their fundamental belief that P.T. Barnum was right about the consumer. Alas, they ran out of suckers. Sigh.
But Ricky will retire to Aruba with his top buddy at Bear Stearns, so who cares…..?
Wow RF,
I doubt you have time, but if you could expand this to a book, it would be a bestselling business book.
It occurs to me that the teachers may actually be doing a good job for their students. By teaching them to avoid “losing” at any cost, they may actually be teaching the best way to rise in the corporate structure of today.
The reality is that we should be teaching kids that you have to risk losing to be a real winner. Failure is okay, and there is a new game starting tomorrow (if not sooner). This whole trophy for showing up, no keeping score thing has to die, or our country may die of it.
@ Sajeev,
Me niether.
We make the cars
We sell the cars
And this is what we say.
What’s good for General Motors, is good for the USA !!
I agree there is no accountability, but I don’t agree that promoting from within is the problem. Toyota promotes from within and they seem to be able to ask the right questions, and get realistic answers. When things go bad at Toyota they actually try to fix them rather than amp up the PR.
I suspect Toyota execs, at least in Japan, all seem very much the same – doppelgangers, at least in appearance. And those that rise to the top have worked for Toyota for decades.
So I’m not sure fresh blood is what’s needed at GM. I think what’s needed is the ability to recognize reality, and deal with it. Maybe changing the corporate culture is more important than changing the figureheads who pretend to be in charge.
Toyota has a philosophy to follow. GM doesn’t. Maybe it’s not Toyota’s cars that GM needs to emulate.
As far as hiring within, success breeds success and Toyota has seen plenty of that over the last several decades while the Big 3 have not. GM hasn’t realized this yet. I’m sure that the intelligence exists within GM to make them successful, but without accountability, that intelligence is wasted.
And I am very much behind the mutiny against exorbitant failure-proof compensation. When someone makes, oh I don’t know, HUNDREDS of times what their employees make, the perspective is different, especially when they have a golden parachute to ease their fall, while other folks, even living within their means, don’t have the luxury of never working again if the top folks nuke the company. I understand market forces have pushed executive compensation in this direction, but I don’t understand why a single person should benefit in failure. I’d love for someone – ANYONE – to rationalize this in a way that doesn’t include the phrase “it is what it is” or the word “market” and actually has some sort of logical basis.
Skooter: I am curious, as you state the sales at your dealership have been brisk, how many of the vehicles were sold at substantial discounts, rebates or zero percent financing? How many of those vehicles I wonder did GM actually make a profit on?
Mr. Farago is correct, the culture of CYA bureaucracy is strangling America and the financial results are getting ugly, in certain segments of the private sector (autos for example) and government sector.
You should see what the Teachers Union is doing to California, over half the massive state budget goes to public schools already and we are facing a $20 billion deficit.
It is one thing to move product, but if you are not making any profits, what’s the use?
And yet despite all it’s faults, GM is one of the largest vehicle producers on earth. Could it be that all that is happening is that the big 3 oligopoly of yesteryear is now a competitive market with the rules of a competitive market?
In a perfectly competive market, profits will tend to be at the going interest rate. Labor rates tend to fall to a rate just high enough to supply the workers needed. New entrants will be coming in and some old ones will disappear but few will notice or care.
All the bad mouthing of GM products makes for some pretty good bargains. Sometimes it pays to not follow the crowd. A lot of people are satisfied with average cars and do not require the nuanced superiority some see in the transplants. This is GM’s market share and may last a long time.
Toyota has a philosophy to follow. GM doesn’t. Maybe it’s not Toyota’s cars that GM needs to emulate.
GM does have a philosophy. It’s right on their website:
General Motors has undertaken a corporate-wide cultural revolution to reclaim our “Position of Excellence” within the marketplace. Building customer enthusiasm is not an easy task, but the right mix of technology and a diverse work force has produced a noticeable corporate agility and an aggressive management style that’s changed the way we do business. We are intensifying the way we market our divisional and vehicle brands to our customers.
Notice that “build cars that people want to buy” isn’t part of it.
If Gm was a sole company amongst the diverse universe of Complex US -based Nasdax-tied hardware companies that manage to compete globally with gadgets and movements, whether in wristwatches or stamping benches, I would foresee that changing CEOs would do the trick. But I see it as the American national peculiarity of being out of touch with tiny precision mechanisms. And here we go, cars are crammed with those tiny gizmos. GM is just the biggest and most noticeable, but smaller, not less devastating hardware extinction tragedies happen on daily basis in the land of free. Freedom is like a frame of picture, if it is too tight, the glass cracks and picture wrinkles, if it is too lose, the picture falls out. Reinvent the frame of freedom, teach that freedom also has been bolted together by responsibility, not only consumerism. Only a despotic Car industry Hitler can turn agonizing Gm around. A precision obsessed freak, a productmonger, diversity guru, fit-and-finish workaholic, sophistiphile, a texture excelsior.
Take care of the product, stocks will take care of themselves…
GM’s managers under Wagoner made the mistake of trying to create a car brand called GM. End of story.
“Iceberg ahead!”
“Hard port round!”
Hitguy,
0 % percent played a big role in moving many vehicles. Did GM make money on them? I really don’t know. Did our dealership make money? Yes. I only offered the information as a possible insight as to GM’s sales for March.
It’s not touched on in this editorial, but GM has recently demonstrated that they have redeveloped capability in engineering and manufacturing vehicles, with efficiency and quality as good as anyone in the world. All of the recent launches, starting with the GMT900 pickups and SUVs, continuing with Solstice/Sky, Lambda CUVs, new CTS, Aura/Malibu have been on time, high quality, and well received in the market. Hell, no one in the world can crack the code for the Corvette’s value equation. There is intrinsic value in that investment and capability, and the possibility of unlocking it from under the shoe of GM’s oppressive financial obligations keeps the dealmakers on Wall Street a-twitter and the stock at least in the double digits (same can be said for Ford, though they are struggling to get back into double digits).
And not all of GM’s foreign excursions have been failures. Wagoner was the guy that placed the China bet 10 years ago, even inside the company most thought he was crazy, and there are still risks to doing business in China, your capital is always at risk. But it’s making significant contributions to the corporate bottom line, and GM is positioned to ride the growth in China, as well as other parts of the region. The Daewoo purchase is also looking like a winner, picking up another strong engineering organization and successful manufacturer of small to midsize cars. Fiat turned out to be a loser, except for the diesel technology and a few years of purchasing cost savings, but it’s not the only story.
A thoughtful, trenchant analysis. Yes, the base has left, and isn’t coming back. But the loss in market share has been a constant for GM since 1970 or so. You would think that someone, anyone, in the company would have looked at this one puzzling situation, and come up with a “Marshall Plan” type strategy to stem and then reverse this fatal decline of their share of the market. Everything, and I mean everything that the management teams have come up with to turn things around since then has been a band-aid at best. The unwillingness to take responsibilty for results goes back to this period as well.
To think that when I was in business school (in the early 70s) GM was still held up as the model of organization and management. ‘Tis a sad, sad demise of a once great American business.
“I think you’ve hit upon the crux of the problem; it is not just GM, but some general management disease in the U.S. in which those who take responsibility are buried by those who avoid it.”
This observation is spot on. I suspect that part of the problem is the so called education and training MBA students get at our nations “top” universities.
Wagoneer and G.W. Bush, for example, are both Harvard MBAs. Much of the top management of traditional US based companies got there by way a handful of highly rated MBA programs. What exactly did they learn there?
@willbodine
But the loss in market share has been a constant for GM since 1970 or so. You would think that someone, anyone, in the company would have looked at this one puzzling situation, and come up with a “Marshall Plan” type strategy to stem and then reverse this fatal decline of their share of the market. Everything, and I mean everything that the management teams have come up with to turn things around since then has been a band-aid at best.
In order to fix that bloodletting someone at GM would have had to accept facts on the ground in the US. They didn’t, and massaged numbers by their wild foreign forays. They ignored product – while thinking they were building the best product possible.
They’re no different from Captain Tungsten, who sees it as his obligation to sniff the flower in a field of manure as far as GM is concerned. Denial only works as long as no one points out you’re delusional.
Cpt. Tungsten-“GM…quality as good as anyone in the world”
CR, JDP VDS and even True Delta all show GMs average below the industry average. A close tracking of the last few years suggests they may even be losing ground. Again.
What do you base your statement on?
Just wondering.
Bunter
You guys keep beating this mantra of “flawed stategy” with four Lambdas.
Facts don’t hold this as true. The Feb 08 sales from Automotive News:
The three Buick, GMC and Saturn Lambdas racked up:
11,976
Ford Edge total: 11,638
Even almost outsold Lexus’ COMPLETE product lineup! 12,203
Nissan Murano sold 10,076.
Total Hyundai truck: 10,187
So, excuse me when I confuse an editorial with facts , but I’m having a hard time seeing exactly which manufacturer is doing a whole lot better!!
The TRUTH is probably somewhere between Captain Tungsten and Mr. Farago (and Stein X Leikanger).
GM’s new vehicles ARE much better. The new Malibu is a huge leap over the old one. (But then, it had to be.) The new pickup trucks have defended GM’s position in the full-size market. The Lambdas are earning very good reviews, and at least give SUV-weary customers another option. If those vehicles weren’t available, I have no doubt that a fair number of full-size GM SUV owners would be heading to the Toyota or Honda dealer to buy one of their crossovers.
But GM still has too many divisions. Ford is matching the sales of the Lambda trio with ONE vehicle (the Edge). The Malibu is probably stealing more sales from the Aura, G6 and Impala than from the Camry and Accord.
And GM’s quality still lags too far behind that of the industry leaders. Automobile recently completed its long-term test of a GMC Acadia, and while the reviewers praised the performance and interior quality of the vehicle, they were disturbed at the signs of deterioration and sloppy quality in a relatively low-mileage vehicle. The latest ratings in Consumer Reports are also a cause for concern.
(I would not characterize the Solstice and the Sky as having “high quality,” and the vehicles have earned decidedly mixed reviews for their real-world performance. They are not high volume vehicles, but they were touted as an example of GM’s new ability to get high-quality, competitive vehicles to the market quickly. They look good, but that’s about it.)
I also see a company that is prone to declare TOUCHDOWN! when it is only about halfway to the goalposts.
GM is making improvements – but those improvements aren’t enough to keep up with the competition, and its brands are still competing more with each other than with Honda, Toyota, Ford, etc. And the softness in the auto market has the potential to devastate GM, and overwhelm its efforts to remake itself.
You guys keep beating this mantra of “flawed stategy” with four Lambdas.
Facts don’t hold this as true. The Feb 08 sales from Automotive News:
The three Buick, GMC and Saturn Lambdas racked up:
11,976
All things being equal, it costs more to sell three labels than one. That requires three advertising budgets, three sets of inventory to manage or mismanage, three distribution networks and three brand management programs.
For the multiple branding strategy to work, they have to charge progressively higher prices, so as to increase their margins, in order to make up for the higher costs.
I’d rather be in Lexus’ position than in GM’s. It’s no secret that Toyota makes money, while GM loses money, even though GM sells (slightly) more vehicles. Sales volumes should not be confused with success, particularly when a lot of those sales are discounted.
gawdodirt-divide those sales figures by the number of dealersships represented.
It gives yet another perspective on how “successful” the Lambda’s are. There are still a lot of domestics sold in many markets (rural, small individually, sizable as a group) where they are virtually unapposed by the “furrin cars”.
This also bolsters their retention stats.
Some thoughts.
Bunter
jthorner,
“Much of the top management of traditional US based companies got there by way a handful of highly rated MBA programs. What exactly did they learn there?”
My guess is that they learned a unifying language and thought structure that has allowed them to create a monopoly on management much like the accountants and lawyers have done. I suppose next we will see regulators pushing to demand that CEO’s of public companies have an MBA and some sort of club membership card license to keep the job.
General Motors Corp. gave Chairman and Chief Executive Rick Wagoner a 33% raise for 2008 and equity compensation of at least $1.68 million for his performance in 2007, a year for which the auto maker reported a loss of $38.7 billion.
In addition to his base pay, Mr. Wagoner has been awarded 75,000 restricted stock units valued at $1.68 million, based on GM’s closing stock price yesterday. He was also given stock options…
http://online.wsj.com/article/SB120483742779317431.html
B-b-but…where will we find such Stellar Management Talent to run American industry into the dust if we don’t obscenely compensate the MBA class for massive failure and mediocrity?
Rick’s compensation was determined by the ‘market forces’ of a hand-picked supine board composed of other executives and back-scratching cronies.
gawdodirt
You guys keep beating this mantra of “flawed stategy” with four Lambdas.
You mentioned the problem right there, flawed strategy. Selling the same vehicle under three(soon four) brands is a strategic error. It is not a design error, a production error, a product, or sales error. The sales success of the Lambdas speaks to the quality of the design, production and product. However, the continual loss of money and (at this point assumed) low margins on these vehicles speaks to a strategic error. As pch pointed out, selling under multiple brands costs more than selling one. Strategic errors are, by definition, leadership or executive errors.
No one has detracted from the capability of GM engineers and workers to produce world class product. The issue is leadership allowing such product to be produced. The issue is the executive culture which surrounds and is ultimately responsible for the product and process.
‘Taint what you do, it’s the way that you do it…..
Meanwhile GM sales just drop 13% from last March, and they are still pumping huge incentives on the vehicles to move them. Have they funded the VEBA? Where is the money going to come from?
If it’s good to have four division sell versions of the Lambda, wouldn’t it be even better to add the CUV to the Pontiac, Cadillac, Hummer and Saab brands as well? And why aren’t there Buick and Hummer-badged Corvettes for the P-B-GMC and the Cad-Hummer-Saab dealerships? GM really lacks imagination.
NetGenHoon :
No one has detracted from the capability of GM engineers and workers to produce world class product…
Well, I hate to stir this pot, but sometimes, I’ve gotta wonder about that. I or somebody in my family has owned Cadillacs, Buicks, Chevys, Pontiacs, Olds…
I’ll be nice here. The quality of parts, fit, finish, and build is often…”lacking.”
…The issue is leadership allowing such product to be produced. The issue is the executive culture which surrounds and is ultimately responsible for the product and process.
I’ll grant you that lack of leadership may be partly to blame for my above comments.
‘Taint what you do, it’s the way that you do it…..
I disagree. Most often, it comes down to what you do or don’t do. Like the Buick Celebrity, fresh off the lot, with no oil filler cap. Or the Trans Am with no spark plug wire guides, allowing the wires to come into contact with hot engine parts. Or the rust coming up from UNDER THE PAINT on the Olds’ trunk deck…
I think it would be a worthwhile experiment to fire every GD MBA in sight and put people in charge who actually understand the technology and products.
“I’ll be nice here. The quality of parts, fit, finish, and build is often…”lacking.”
I see literally dozens of new GM vehicles every day. I see virtually no defects or “lack” of quality build.
So where exactly do you experience these problems?
The three Buick, GMC and Saturn Lambdas racked up: 11,976 Ford Edge total: 11,638
So Ford got done with one vehicle what it took GM three vehicles to do. Uh, that proves the point.
It is a lot cheaper to design, build and market one vehicle than it is to make three versions of it. The Lambdas have a great deal of unique sheet metal and interior parts for each design while the Edge obviously has only one set of sheet metal and interior design. Ford is kicking GM’s butt in design & marketing productivity. I would also bet that the Edge’s factory and supply chain costs are lower per vehicle than in the Lambda trio’s.
They should take these golden compsation packages and put that money to the workers. We’ve slaved endless hours to build quality products. Only to be blamed for issues from design and mismanagment.
You poor workers, slaving away at a $30/hr job. I hear Walmart is hiring if you got it so bad. Seriously, I don’t doubt that you work hard, but how can you claim being underpaid for the work that you perform?