Corporate Eye

The GM Demise — Some Observations

I recall a 1967 GM product, a Pontiac Tempest. What a piece of junk. The transmission leaked and despite some heated calls between GM customer service and the auto dealer, the problem continued. Finally, in disgust I went to a transmission shop and got it fixed.

Years later, when I was cleaning out the trunk, I found a cigar butt that was sprayed with the paint used to paint the trunk. Apparently, an assembly line worker tossed it there.

One car but it was indicative of quality problems that would dog the company right up to its recent bankruptcy.

Then there was a course I attended that was given by noted guru Peter Drucker. He lectured about GM and how Alfred Sloane in the 1920′s changed the company into the icon it was until June 1, 2009. Then I came upon this in the Financial Times –

GM, Drucker and the role of the guru

June 1, 2009 4:16pm by Stefan Stern

Can’t let today go by without making a short comment about the decline of General Motors. This was one of the organisations that Peter Drucker knew best. He based his 1946 book Concept of the Corporation on what he had learned there.

While the book is often seen as an extended hymn of praise to GM, it did not go down well internally. As Rick Wartzman pointed out here last year, GM managers did not like the critical bits – especially when Drucker had the nerve to suggest that things might have to change if the company wanted to survive.

In the 1990s Drucker himself said, immodestly but not inaccurately, that GM’s potential problems had been foreseen by him 50 years earlier.

Gurus are always right in the end. You just have to be patient.

Then there is this from Gary Hamel’s recent blog (a must read)–

Ever since I can remember, GM’s defenders have been arguing that the company was making progress; and they were right. GM has been getting better for a very long time-but it’s been 40 years since it was the best. The Chevrolet Malibu and Corvette ZR1, the Buick Enclave and Cadillac CTS-V: these are exceptional cars by anyone’s standards. Problem is, they are even more exceptional when judged against the persistent ordinariness of GM’s other products. For years, excellence at GM has been an occasional aberration, rather than an all-consuming passion.

GM has a daunting list of issues to deal with–

  • The US government, GM’s largest stockowner may find it difficult to avoid meddling in business decisions
  • Talent Management, will the company find it difficult to attract top management?
  • How will it deal with what may be the largest organizational change in corporate history?
  • How will it rebuild its tarnished reputation?

These may be just the tip of the iceberg. Many stakeholders have “skin in this game”, we will see.

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 The GM Demise    Some Observations
Ed Konczal has an MBA from New York University's Stern School of Business (with distinction). He has spent the last 10 years as an executive consultant focusing on human resources, leadership, market research, and business planning. Ed has over 10 years of top-level experience from AT&T in the areas of new ventures and business planning. He is co-author of the book "Simple Stories for Leadership Insight," published by University Press of America.
 
Comments

I too had a 67 Tempest. A friend of mine was following me one winter evening when I stopped at a STOP sign. However, he hit a patch of snow, gently bumping my Tempest from behind. Little damage with the exception of the Tempest name plate on the trunk. It broke with the “Tem” falling off. From that day forward it was simply called the “pest.”

Seems fitting, all things considered.

GM, Ford Motor Co. and Chrysler Group LLC are suffering from their sins of the past
“It doesn’t take long to lose your reputation for making reliable cars, but it takes 10 to 15 years to get that reputation back,”

Read full article at –
http://www.bloomberg.com/apps/news?pid=20601109&sid=aE9iwWSyHXR0

Hmm, maybe taht Pontiac Tempest is haunting GM

Richard Turner

Foreign competition and an uneven playing field favoring the imports have killed the American auto industry. The fact that Americans can only absorb a finite number of vehicles anually, and the fact that we allowed the market to be flooded by auto makers we never knew existed has hastened the demise of our once coveted industry having been recognized as the backbone of America.
Having said that, we must also critique our beloved former “Big Three” and understand that they had not a clue as to how to manage a company let alone produce a quality vehicle. Allowing the unions to ride rough shod over them and simply pass the incurred costs on to the consumer was a formula for eventual failure. Poor quality and hi prices are not a winning combination. Competition had a distinct advantage in these areas and they through persistance broke down the walls of our auto industry. They are now America’s transportation of choice and deservidly so. The only thing in this world that is constant is change!

Good bye GM.Ford,Chrysler, you will soon be going the way of Studebaker,American Motors,Hudson,Nash,Packard, Etc,Etc.

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