What were they thinking in the Mahogany Row executive Board Rooms of General Motors in Detroit? What went wrong? Did their executive staff miss a turn signal or proceed through a red light that warned them of a changing marketplace?
Having just received my latest copy of Imprimis from Hillsdale College in Michigan let me share some of the featured content with Juice readers. The front page title reads “How Detroit ‘s Automakers Went from Kings of the Road to Roadkill.” Some heavy words.
The article reads in part that “GM is an institution that survived in its early years the kind of management turbulence we’ve come to associate with particularly chaotic Internet startups. But with Alfred P. Sloan in charge, GM settled down to become the very model of the modern corporation. It navigated through the Great Depression, and negotiated the transition from producing tanks and other military material during World War II to peacetime production of cars and trucks. It was global before global was cool, as its current chairman used to say. By the mid-1950s the company was the symbol of American industrial power—the largest industrial corporation in the world.”
The article goes on to ask the $64,000 question. “How does a juggernaut like this become the basket case that we see before us today?”
Now for a twist. Rather than provide the author’s “five factors that contributed to the current crisis” I challenge each of you to provide your own reasons. You can surely read the entire report as provided in the following link to see if you agree with the guest speaker. Let’s see what feedback we get.
To read the entire speech simply go to the following link:
http://www.hillsdale.edu/news/imprimis.asp
FYI. The school web site is hillsdale.edu
Even though they *said* they were global before global was cool, they weren’t really global.
Sure, they had subsidiaries in Europe, nothing from there fed back into the US.
The US market was pretty much closed to foreign car makers. The predictable result was that “innovation” meant different fins every year. Quality didn’t matter much since all cars were pretty much equally bad. The mentality of “we know best what the customer wants” dates from that era.
Then, the foreign car manufacturers were allowed to sell cars to US customers, and the Japanese car companies took off, with their superior quality.
The US car manufacturers failed to learn from that. It got only masked by the cheap gas prices. They still have the mentality of “we have MBAs, we know best what you stupid customers want”. Recent commercials have the slogan “our best quality ever”. If you turn that slogan on its head, it means that they admit they sold crap in the last couple decades. Why in the world should anybody believe that this year’s model is not just this year’s crap?
A prime example of what these guys do wrong is Saab, the Swedish car manufacturer GM bought in 2000. They turned a quirky car company, with iconic cars with a fanatical following into a car company producing crappy GM cars with a Saab logo glued on.
Compare that with VW, which successfully managed to revive their iconic beetle. And VW’s Golf/Rabbit line has been their cash cow for several decades now. What’s GM’s cash cow??? They don’t have a car that has such mass appeal.
Joe.
Since giving up on GM automotive products, which I once raced, we now drive Toyota’s “cash cows.”
A sad tale that you clearly have exposed above.
After WWII we were the only game in town. Manufacturing in England, Italy and Germany were all demolished. At that time Japan was not a major factor in the auto industry. We were it, take it or leave it.
However we rebuilt Japan after the war and they were smart enough to retain the services of some names which I recognize from my industry activities. Quality guru’s such as management visionary Peter Drucker who “in the 1950’s (Drucker) forecast the importance of computers, and in the 1960s, he foresaw Japan’s rise as an industrial power. In 1997, he remarked about an expected backlash to executive pay, saying, “In the next economic downturn there will be an outbreak of bitterness and contempt for the super-corporate chieftains who pay themselves millions.”
Another name I recognize is “William Edwards Deming (October 14, 1900 – December 20, 1993) was an American statistician, professor, author, lecturer, and consultant. Deming is widely credited with improving production in the United States during World War II, although he is perhaps best known for his work in Japan. There, from 1950 onward he taught top management how to improve design (and thus service), product quality, testing and sales (the last through global markets)[1] through various methods, including the application of statistical methods.
Deming made a significant contribution to Japan’s later renown for innovative high-quality products and its economic power. He is regarded as having had more impact upon Japanese manufacturing and business than any other individual not of Japanese heritage.”
Joe Juran was another quality expert who assisted Japanese manufacturing. “Joseph M. Juran — a man that dedicated his life to improving the quality of products and services to the world. Juran contributed to the Japanese Quality Revolution with Dr. Deming.”
I once invited quality guru Philip Crosby as the guest speaker at our international electronics conference held in Orlando. He created the expression of “Zero Defects” and also the term “DIRFT.” Do it right the first time.
In my discussion with Phil before his death we discussed the American manufacturing attitude which drove other American quality and manufacturing guru’s to Japan where their recommendations were welcome and greatly appreciated.
Decades later you can now see the result.