A lean, green GM needs new leadership
Tomorrow, it's likely that the new GM will be born. And word has it that it's going to fire 450 managers and change its corporate color from blue to green. I am not sure whether other people buy cars based on the color of the corporate logo or even the number of managers the company employs -- but I know that these don't matter a bit to me. I am more interested in which company makes the best cars.
And changing GM so it makes cars that more people will buy is probably the key to its survival. That's why keeping Fritz Henderson as CEO of the new GM looks to me like an idea whose time has passed. What's needed is someone with a compelling track record of taking a traditional and previously successful company that is down on its luck and bringing it back to life.
He would be the best person I can think of for the job. Gerstner has the ability to come into an organization as an outsider, figure out what needs to be fixed, decide who should solve what problems, and then lead the charge for change.
In an organization like GM, addressing those challenges will be extremely difficult and critical to those who depend on the new GM to succeed. As Gerstner said about GM, "It denied the fact that customers really didn't want the products they had. They wanted to stay with what they did." This is the right diagnosis and I believe Gerstner has what it takes to turn around the problem.
Gerstner had effusive praise for Obama and I think Obama should use all his persuasive skills to get Gerstner to change his mind about serving. Since the U.S. now owns 61 percent of GM, it is in our financial interest that Obama convince Gerstner to run the new GM.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.



























Reader Comments (Page 1 of 5)
7-09-2009 @ 10:31AM
janscolofsky said...
GM won't be able to compete until it makes cars with much better designs. Just look at how ugly some of their cars have been recently. Would you have bought a Pontiac Aztec, even with a $10,000 rebate? Look what Renault did when they formed an alliance with Nissan. Nissan now has about the best designed line of cars now and puts any GM design to shame.
Reply
7-10-2009 @ 12:36AM
mickey said...
This is living proof how two-faced GM is, old GM, new GM, old GM, new GM, blue, green, blue, green, blue, green, old, new. I WOULD RATHER BUY A CAR FROM THE AYATOLLAH IN IRAN THAN FROM GM. NEVER BUY GM.
7-09-2009 @ 11:00AM
cheez said...
Funny the NEW Toyota Venza looks alot like the Pontiac Aztec.
What a joke. Patriots don't buy Japanese cars . Do you get a Japanese flag with your New Japanese built car??
Reply
7-09-2009 @ 11:08AM
janscolofsky said...
Actually it looks nothing like the Aztec, which has to be one of the ten most ugly cars of all time. I didn't say I bought a Japanese car, especially since I have a Chrysler Town and Country Minivan, I was just acknowledging the fact that Nissan's cars are very well designed while GM's cars on the whole are not.
7-09-2009 @ 11:10AM
slicric13 said...
Gentlemen:
In response to your request to contact legislators and ask for a bailout for the Big Three automakers, please consider the following, and please pass my thoughts on to Troy Clarke, President of General Motors North America. Politicians and Management of the Big 3 are both infected with the same entitlement mentality that has spread like cancerous germs in UAW halls for the last countless decades, and whose plague is now sweeping this nation, awaiting our new "Messiah," Pres. Obama, to wave his magic wand and make all our problems go away, while at the same time allowing our once great nation to keep "living the dream." Believe me folks, The dream is over!
This dream where we can ignore the consumer for years while management myopically focuses on its personal rewards packages at the same time that our factories have been filled with the world’s most overpaid, arrogant, ignorant and laziest entitlement-minded "laborers" without paying the price for these atrocities. This dream where you still think the masses will line up to buy our products for ever and ever.
Don't even think about telling me I'm wrong. Don't accuse me of not knowing of what I speak. I have called on Ford, GM, Chrysler, TRW, Delphi, Kelsey Hayes, American Axle, and countless other automotive OEM's throughout the Midwest , during the past 30 years and what I've seen over those years in these union shops can only be described as disgusting.
Troy Clarke, President of General Motors North America, states: "There is widespread sentiment throughout this country, and our government, and especially via the news media, that the current crisis is completely the result of bad management which it certainly is not."
You're right Mr. Clarke, it's not JUST management. How about the electricians who walk around the plants like lords in feudal times, making people wait on them for countless hours while they drag ass so they can come in on the weekend and make double and triple time for a job they easily could have done within their normal 40 hour work week? How about the line workers who threaten “newbies” with all kinds of scare tactics for putting out too many parts on a shift and for being too productive?
(We certainly must not expose those lazy bums who have been getting overpaid for decades for their horrific underproduction, must we?)
Do you folks really not know about this stuff? How about this great sentiment abridged from Mr. Clarke's sad plea: "over the last few years we have closed the quality and efficiency gaps with our competitors." What the hell has Detroit been doing for the last 40 years?!? Did we really JUST wake up to the gaps in quality and efficiency between us and them? The K car vs. the Accord? The Pinto vs. the Civic? Do I need to go on? What a joke!
We are living through the inevitable outcome of the actions of the United States auto industry for decades. It's time to pay for your sins, Detroit ...
I attended an economic summit last week where brilliant economist Alan Beaulieu from the Institute of Trend Research surprised the crowd when he said he would not have given the banks a penny of "bailout money."
"Yes,” he said, “this would cause short term problems," but despite what people like politicians and corporate magnates would have us believe, the sun would in fact rise the next day and the following very important thing would happen. Where there had been greedy and sloppy banks, new efficient ones would pop up. That is how a free market system works. It does work if we would only let it work."
But for some nondescript reason we are now deciding that the rest of the world is right and that capitalism doesn't work - that we need the government to step in and "save us". Save us my ass. Hell - we're nationalizing and unfortunately too many of our once fine nation's citizens don't even have a clue that this is what is really happening.
But, they sure can tell you the stats on their favorite sports teams.
Yeah - THAT'S really important, isn't it?
Does it ever occur to ANYONE that the "competition" has been producing vehicles, EXTREMELY PROFITABLY, for decades in this country? How can that be? Let's see. Fuel efficient. Listening to customers... Investing in the proper tooling and automation for the long haul.
Not being too complacent or arrogant to listen to Dr. W Edwards Deming four decades ago when he taught that by adopting appropriate principles of management, organizations could increase quality and simultaneously reduce costs. Ever increased productivity through quality and intelligent planning. Treating vendors like strategic partners, rather than like "the enemy." Efficient front and back offices. Non-union environment.
Again, I could go on and on, but I really wouldn't be telling anyone anything they really don't already know down deep in their hearts.
I have six children, so I am not unfamiliar with the concept of wanting someone to bail you out of a mess that you have gotten yourself into. My children do this on a weekly, if not daily, basis as I did when I was their age. I do for them what my parents did for me (one of their greatest gifts, by the way). I make them stand on their own two feet and accept the consequences of their actions and work through it. Radical concept, huh. Am I there for them in the wings? Of course, but only until such time as they need to be fully on their own as adults...
I don't want to oversimplify a complex situation, but there certainly are unmistakable parallels here between the proper role of parenting and government. Detroit and the United States need to pay for their sins.
Bad news, people - it's coming whether we like it or not. The newly elected Messiah really doesn't have a magic wand big enough to "make it all go away." I laughed as I heard Obama "reeling it back in" almost immediately after the final vote count was tallied. "We really might not do it in a year or in four." Where the Hell was that kind of talk when he was RUNNING for office.
Stop trying to put off the inevitable, folks. That house in Florida really isn't worth $750,000. People who jump across a border really don't deserve free health care benefits. That job driving that forklift for the Big 3 really isn't worth $85,000 a year. We really shouldn't allow Wal-Mart to stock their shelves with products acquired from a country that unfairly manipulates their currency and has the most atrocious human rights infractions on the face of the globe. That couple whose combined income is less than $50,000 really shouldn't be living in that $485,000 home.
Let the market correct itself folks; it will. Yes, it will be painful, but it's gonna be painful either way, and the bright side of my proposal is that on the other side of it all is a nation that appreciates what it has and doesn't live beyond its means and gets back to basics and redevelops the patriotic work ethic that made it the greatest nation in the history of the world, and also probably turns back to God.
Sorry - don't cut my head off, I'm just the messenger sharing with you the "bad news".
I hope you take it to heart.
7-09-2009 @ 2:35PM
JIM said...
CHEEZ. My money-my decision.
7-09-2009 @ 10:36AM
Pierre said...
So the posed question is: "Will the new GM have the right leadership?"....the REAL question is will GM get (or have) the "right" leadership that knows how to build and sell quality cars, or will they get the "right" leadership that has the "right" politics to make their politically motivated overseers happy? There is a HUGE difference between the two.
Reply
7-09-2009 @ 10:45AM
dave said...
I am sorry GM but you bit the hand that fed you when you left the Delphi salary retirees who had worked for you for 27 years and up out to dry. You took care of the union because of a contract but refused to help the salary people. We now are paying 800.00 a month for medical and our retirement is headed for PBGC to take over the payments which will be another loss for many people. My loyality to you will be the same as your loyality to me and my next car will be a Ford.
Reply
7-09-2009 @ 11:08AM
Rick said...
Dave: My guess is that the Delphi hourly retirees will soon be in the same boat as the Delphi salary retirees in regards to the health benefits as the VEBA plan will simply be a lost cause for lack of funding. As far as the pensions are concerned, I think that virtually all pension plans as well as the FBGC will be busted by 2011. It's not a pretty story but then again I did not write the book.
7-10-2009 @ 12:12AM
Mike said...
I started working for GM in 72 at Harrison Radiator,then they changed over to Delphi that was there biggest mistake. But I can remember the salaried people would always laugh at us when we went on strike. They would always distance themselves from us because they thought they where above us in some way. They would make fun of the UAW. But I don't like to see anyone loose there pensions.
7-09-2009 @ 10:52AM
David said...
I am no longer a GM fan. After having purchased many of their vehicles I will never, ever again have one. Their leadership, current and past, is pitiful. They have absoulutely soaked the taxpayer, closed many established dealerships and just plain poor managers.
Reply
7-09-2009 @ 10:56AM
John said...
Most GM products aren't that bad. I've bought new GM products since 1986. I've had mostly Corvettes and SUV's. However after buying 2007 Tahoe and watching it lose all its value in 15 months and the strong arm tactics of GMAC if you get behing one payment (a mere 731.00 a month), never again, never again.
Reply
7-18-2009 @ 5:48PM
LovePontiacs said...
About time some Managers get fired. They should have started at the top and worked their way down the line. The tough, hard working production worker putting their heart and soul into making each vehicle gets the shaft again. Let's hope they really clean house again, starting at the top (yes, even though he is new, he allowed the demise of Pontiac to continue). In my opinion (of, course, I'm not privy to all the details), they should be working to eliminate those employees who have allowed poor decision after poor decision after poor decision to be made (and the designers of these "fine" cars and trucks. It isn't always about numbers. Why not eliminate non-productive vehicles instead of entire product lines? Pontiac is the best looking vehicle in GM's car line. Some DOPE made the decision to turn Pontiac into the Gee, what is it? product line. What about those worthless Buicks, the redundant GMC (nothing more than a little more expensive Chevy), the cheap Chevy and, of course, those Cadillac product lines that are nothing more than "look at me, I have more money than brains" vehicles? What thanks the loyal Pontiac owners get from GM. I've owned three Pontiacs in my lifetime, not to mention the six Pontiacs that my parents have owned through the years. What a load of crock! Loyal Pontiac owners get nothing in return. It will be a cold day in **** before I buy a new GM vehicle. My 2000 Grand Prix was the most reliable vehicle I owned. Thanks GM! I hope that a very successful (American Company) buys Pontiac and makes them more successful than the "new" GM is going to be.
Reply
7-09-2009 @ 11:07AM
Blavk American US War Veteran said...
Boycot GM ( Government Motors ) & Chrysler & all other companies that took the bail outs. They are never going to pay this money back any way, we the people US taxpayers will be paying the bail outs back with higher taxes & service charges just wait & see.
Send Washington DC & Wall St. a message vote these folks out of office that voted yes for the bail outs, that is a change I can believe in. The US. government bailed out the rich & foreign investors, had to keep the Arabs, Chinese & Japs happy so BOYCOT ! I'm a Black American US War Veteran & reired from Chrysler I have just been fuc*** with my pension & insurance, just wait it will happen to you to.The Great Black Messiah the Anti Christ will not fool me any more. So BOYCOT take America back vote for a change.
Reply
7-09-2009 @ 11:12AM
PhitandTrim said...
In case you didn't notice, we just took America back from that gang of liars and incompetents. The choice we had was clear and the American people spoke. It must really burn you racist air soles to see what happened.
7-10-2009 @ 7:27PM
LARRY said...
with an obama appointee and the uaw --they have no leadership at all- just pay check collectors and thieves
Reply
7-09-2009 @ 11:09AM
Michael said...
It is funny how a CEO can drive a company into the ground get fired and still come out smelling like a rose.
Reply
7-09-2009 @ 11:16AM
Okie Clem said...
I have bought new GM cars many times since the first in 1946. I'll not buy another as long as the UAW has such a huge part of the ownership. UAW is killing the goose that lays the golden egg.
Reply
7-10-2009 @ 12:11AM
Mike said...
The Goose was cooked by management with there poor product line not the UAW. You see most of these comments people are saying GM isen't makeing good designed cars.
7-09-2009 @ 11:17AM
Greg said...
Boycott the American companies that took the bailout money because they won't be able to pay it back, brilliant. This will ensure they won't be able to it bay it back.
Reply