We’ve identified NYT (and former Detroit News) scribe Bill Vlasic as a Motown cheerleader ever since ever. Bill’s not happy with that assessment. Can’t see it. Which is kind of strange. I mean, read this piece in The Times chronicling GM’s slide into bankruptcy and try and find one– one– instance where Vlasic takes CEO Rick Wagoner and Co. to task for running what was once the world’s largest automaker into the ground. It’s full of the usual weasel words and waffle. To wit: the headline. “Driven to the brink.” Not driving over the brink. Driven to the brink (by external events, of course). Vlasic and his partner lead their “story” with the termination of GM’s CXX SUV program (you hurt your what?). “‘It would have been very difficult in today’s environment to spend a couple of billion dollars to do a replacement [for the GMT900 SUVs],’ said Robert A. Lutz, G.M.’s vice chairman and head of product development. ‘Reality had set in.'” And when did Maximum Bob get this wake-up call? May. Of this year. There’s more, but those of you who easily offended by GM’s mismanagement and media stooges should avoid the jump.
The rest of the article is a potted history of GM, focusing on the recently terminated Janesville SUV plant. “Potted” as in you’d have to smoke a lot of pot to view it as anything other than corporate spin/fiction. “What is clear is that Detroit, among its other miscues in recent years, particularly overindulged its romance with S.U.V.’s, leaving it tethered to a product line that may prove to be the industry’s undoing.” Over-indulgence? Jeez, we’ve all done that! “G.M. began sensing the vulnerability of the market in the summer of 2005, when gas prices shot up in the aftermath of Hurricane Katrina. Sales of big S.U.V.’s dropped sharply, just as G.M. was in the midst of the first stages of a broad turnaround plan.” Doh!
“‘The market kind of fell off a cliff, which was very difficult to deal with,’ said Mark R. LaNeve, head of G.M.’s North American sales. ‘It was burning down just when we were trying to do our turnaround.’ Yada yada yada. “Mr. Wagoner also pointed out that G.M.’s biggest rival, Toyota, invested heavily in new truck production in the United States just as the pickup and S.U.V. markets were crashing. But big trucks were never the underpinning of Toyota’s success, and the Japanese juggernaut never lost sight of its goal of becoming a leader in hybrid gas-electric vehicles and small cars. G.M. is just now making an all-out effort to catch up in the small-car arena, and its hybrid sales are still far behind Toyota’s.”
While the is more of less accurate, the softly-softly approach clearly shows where the journalists’ sympathies lie. Anyway, sorry, can’t go on. Just had breakfast.
Link to Times article in your article doesn’t work. Link at end works.
Happy_Endings :
Sorted. Thanks.
Nice article, but it doesn’t go to the core….Management is made of morons. As simple as that.
Sorry, Mike, it’s not as simple as that. While simple solutions have a strong appeal, they’re rarely valid. Worse, they deflect attention from the real problems and the real solutions. GM’s problems go well beyond the personalities to the system itself, maybe even the American way of doing business itself.
Which is scary, so we’d rather think it’s all about the people.
GM’s execs are smart people, and they’ve actually achieved a lot at GM: greatly reduced manufacturing costs and a leading share in China come to mind. They haven’t achieved enough, of course. But–as much as I think I would have personally done some things better–few people placed in the same positions would have done better overall.
Why havent’s these people been replaced? For the same reason most employees that peform under expectations aren’t replaced: you usually come out behind when you try.
By the way, what was the CXX? An even larger variant of the Lambdas? Seems I’m out of the loop on this one.
I agree largely with MK. Rick Wagoner doesn’t lack intelligence – courage, perhaps, but not intelligence. The truth is that it’s very easy to play armchair CEO but in practice it’s quite difficult to run a company. The best example of that is Cerberus and their hired guns (Nardelli, Press) and the abysmal job they’re doing “turning around” Chrysler.
That said, there’s no question RW and his predecessors failed GM’s shareholders miserably.
The New York Times is to credibility what GM is to farsighted strategy. If the Chrysler merger doesn’t work out, maybe GM should consider a strategic alliance with Pinch Sulzberger’s outfit.
Just GMs luck (not that I am saying they lack for ineptitude). The price of gas plummets…but the population is too broke to buy it (or new vehicles) or too shit scared to take the chance.
PS Oh good! Dirty cheerleaders!
“Save the cheerleader, save the world.”
But–as much as I think I would have personally done some things better–few people placed in the same positions would have done better overall.
The successes enjoyed by the leading companies in the automotive industry indicate otherwise. It is quite possible to sell cars at a profit, if the people in charge are competent.
Rick Wagoner’s jobs as CEO are to create a strategy and to articulate a vision for the company. His strategy has been precisely the opposite of what was needed and he needs a Seeing Eye dog for the vision thing.
The NYT article claims that “in retrospect, G.M. made one bet too many on the market for S.U.V.’s.” I learned as a child that one should not put too many eggs in one basket. Wagoner was a kid, too, so he shouldn’t have needed retrospect to know that.
The auto markets in the US, Canada, western Europe and Australia are mature markets. The implication of that fact is that it is of critical importance to keep your competitors from taking your customers, because there aren’t many new ones entering the market.
Allowing the Civic, Corolla, Camry and Accord to go virtually unopposed in that kind of market was a tremendous mistake. People such as Wagoner are directly responsible for allowing that to happen.
The problem isn’t with oil prices, but with pretending that the job of the CEO of a car company is to be an oil futures speculator. GM should have competitive product available for any market condition that the world can throw at them, and not just a perfect economy with $1.00/gallon gas.
I tend to agree with tone of TTAC. NYT has lost its soul long time ago and stopped being leader in their respective field, just like GM. The tendency to blame everything around the company, but company and management appears to be the trend du jour.
In its 100 years history GM could not produce small efficient and powerful engine in US. Their domestic small engines do not compare to Japanese or European. Same applies to smaller sized cars. The best GM cars come from Opel today. Management at GM had the same data as Honda and Toyota, yet they wasted disproportionate amount of funds and time on production of monster trucks expecting cost of oil to be low.
I am not trying to be arm chair CEO, but Honda, Toyota and Nissan although forayed into high profit high risk large truck segment, did not bet house on it. BTW, Honda/Toyota still sells minivans, because they better then domestic.
Those are achievements of “Red Ink” Rick and his sidekick Putz, um Lutz (read what Lee Iaccoca has to say about the lad). GM wasted an excellent opportunity to join forces with Renault-Nissan and now company one foot in grave waiting for taxpayers to bail them out.
When Chrysler was looking for government help in 80’s Iaccoca payed himself $1/year. I would like to see Rick & Putz to show such integrity.
Regarding situation at Chrysler. It is dismal, but based on published information (which may not be accurate since company is private and has no stringent reporting requirements of a public company) they have cash, their expenses are in-line with their profits (or losses). Yes, they have no cars to sell, but it was as much Nardelli fault as banking crisis.
MK is right that running a big company is hard, but I have to side with Pch101 and autonut. For decades the executive suite at GM has presided over the production of many inferior vehicles, some egregiously so. There is no excuse for continuing to disappoint your customers. Now, it may be that engineers, stylists and assembly plant chiefs deserve some of the blame. (Does no one at GM know how to make a 4-cyl. engine as smooth as Honda’s?) But even in that event, good executives would have long ago gone looking for better talent. And good executives would have realized long ago that GM’s legacy costs were getting intolerable.
Maybe the problem with Detroit’s executives is that they are paid so much that the job attracts and retains the wrong kind of people. Meanwhile, folks who are only willing to accept 1/10th as much money take on the top jobs at places like Toyota, Honda and Volkswagen. VW is easy to poke fun of for their US market mis-steps, but they are globally a vastly more profitable and better positioned company than any of the 2.8.
So take up the new executive chant: “Less pay, Better work”.
Hayden Panettiere is SUCH a hottie. mmm.
The system is the enemy. U.S. executive compensation schemes reward senior managers for keeping financial markets happy. They focus on quarterly profits, not patient investment for the long haul. If Wagoner keeps GM alive with taxpayer bailouts he will undoubtedly be eligible for a bonus.
What gets portrayed here as the brilliant corporate strategy and execution of foreign automakers is actually just the result of them responding to the market conditions in their own country ($4/gal gas in Europe or Japan would be cause for celebration) and building competitive products there. Their attempts to build competitive products for the unique market conditions here (at least until 18 months ago…) were spotty at best (T-100? Previa? Gen 1 Odyssey? Titan?)
The two things the Japanese companies do better than the US carmakers are 1) they learn, and 2) they don’t crap on their suppliers. Both of those are based in their culture, they don’t really know how to operate WITHOUT doing those things.
When the story of the demise of the domestic industry is written, their treatment of suppliers, and how that hurt their competitiveness, will be one of the main themes. Consider this story:
http://www.crainsdetroit.com/article/20081007/FREE/810079986
Why do you crush a supplier that has delivered you a technology that a) has been implemented in your vehicles before anyone else; b) is really cool, works great; and c) had a recall that, while pricey, is probably is not entirely their fault. Incredible
Michael Karesh :
GM’s execs are smart people, and they’ve actually achieved a lot at GM: greatly reduced manufacturing costs and a leading share in China come to mind. They haven’t achieved enough, of course. But–as much as I think I would have personally done some things better–few people placed in the same positions would have done better overall.
I disagree. These people in those positions were and are PAID very well. I think it’s quite right to expect them to actually DO BETTER. Not merely to “do the same as anybody else in that position”.
Accepting this performance level is the same as accepting incompetence. When did that become so commonplace?
And yes, I blame them, and all those who came before them, as well as all of the people who put them in charge! They are all individually and collectively responsible for this 30-year slide of General Motors.
“The System” be damned. Human beings have ingenuity and creativeness; the ability to CREATE the “System”; and therefore, the ability to CHANGE the “System”.
The fact is that in this long line of incompetence, nobody in management used their God-given talents. It’s shameful.
John Horner and Gardiner Westbound are on the right track.
My apologies to everyone who’s already seen this page, but I must trot out the executive summary of a report I submitted to GM back in 2001, based on a year-and-a-half of fieldwork inside the company’s product development organization:
http://www.truedelta.com/execsum.php
Michael: It sounds like those things go back decades, and that many of those factors (the lack of trust, the parochialism) extend beyond just product development.
Yes, they do.
GM (and many other American companies) have consistently overlooked the nature and importance of interpersonal relationships. They’ve acted as if people are like car parts, and can be swapped about and instantly achieve full potential. This is far from the case.
If I had to identify who did the most to destroy GM, though, that would be Roger Smith.