Our American automotive industry is in deep distress, a quagmire mostly of their own creation. How could GM stay asleep at the wheel, remaining ignorant and indifferent for so long? How could Michigan politicians look the other way for so many years, all the while permitting the big three to sink further into the pit? I watched with disbelief at what I heard from Senator Carl Levin (D-MI) while watching Sunday morning's edition of NBC's Meet The Press. It was a familiar scene of political whine, wanting relief but not wanting to accept responsibility. The American consumer is not a bottomless source of revenue. They are however, smart enough to desire solutions under the right conditions.
In the 1970’s, the lead-sleds produced by our domestic auto industry began competing with a new breed of cars coming from Japan. The industry ignored the challenge, seeing it as nothing more than a nuisance; after all, they were the Detroit Collective and who could possibly compete with that! Such arrogance possibly predicted their current state.
This situation did not occur overnight, rather over the course of several decades. The current effort to save the American auto industry will be a long and arduous one, an effort that will demand many concessions from all sides. There must be significant restructuring, new laws, new management and most important… a new vision. How can GM compete successfully and profitably in this new age? While there are many reasons for their failure and plenty of blame to be thrown around, there are several simple strategies that might be readily employed to get our US Auto Industry back on track, hopefully enabling their very survival. There is a great deal at stake and little time for fence straddling. Massive action must be taken before Congress agrees to loan any more money.
I submit that GM should restructure its entire manufacturing, sales and marketing strategies, investing considerable time and study of its rivals Toyota, Honda and BMW. After all, they appear to be doing things right and have been growing fiercely at a time when GM, Ford and Chrysler have been losing market share and profits. Heck, anyone can visit BMW’s state-of-the-art manufacturing facility in Greer, SC and schedule an in-depth factory tour. That is a hint for all of you GM corporate and production managers and board members: Go tour the plant, see how Brand X does it and do likewise!
Toyota, Honda and BMW build their high quality cars right here in America with American workers, proving that it certainly can be done here. They build cars that their customers want. They build cars that are appropriate for the times, employing the right combinations of efficiency, ergonomics, green awareness, technical prowess, performance features, aesthetics and ride quality. They do it however, with a completely different management approach. All of BMW’s cars found rolling down the assembly line in Greer are sold before they even leave the manufacturing plant. Now that's sales efficiency.
How many varieties of the same basic model do we really need? A Pontiac G6, Saturn Aura, Buick Lacrosse, Chevrolet Malibu and Cadillac CTS are all quite similar save details and appointments. Each has its own costly manufacturing and production requirements, supply chains, vendors, brand identification, sales channels and marketing strategies. The crazy part is that this grouping is but one of a larger number of product offerings. How many products and iterations do we really need?
Get rid of most of them! Offer a streamlined product offering like Honda, BMW and Toyota. Load them up with features that almost everyone wants as standard as Honda has done with their Accord. Eliminate all of the sub-brands and offer GM cars alone. Perhaps entry-level vehicle, a family sedan, a performance vehicle, a luxury performance vehicle and a utility/truck vehicle could round out the models offered. Make fuel efficiency, new battery and fuel technologies paramount in importance and focus.
Toyota, Honda and BMW offer high wages and great benefits to each of their non-union employees. They foster a culture of long-term employment and community involvement. People like working there. They have low turnover and absenteeism. They also have few if any costly quality issues. Their people are involved and respected. Their contribution is recognized and invaluable. While unions certainly are not solely to blame for the failures of the American auto industry, there in no doubt that they have contributed to it. There is no longer any room for weighty and oppressive union activity in the new automotive world order. If a revised, re-tooled and re-evaluated Detroit effectively models and commissions what they learn from Toyota, Honda and BMW, their employees will not need or want union representation. The new and efficient General Motors could operate without such a stranglehold placed upon them.
So…Here is a short memo to the GM board: Forget the bankruptcy option. Study these foreign competitors, quickly duplicate their manner of operations and restructure immediately. Time is of the essence. There is no time to waste. Fire all current lackluster and shortsighted managers. Assign the best team of industrial minds and decision-makers to the task, going outside of GM to find them. Obviously, if they were already part of the existing GM management team, these tough decisions would have been made long ago. Find new, aggressive talent and employ them now. Implement these sweeping changes and act immediately. Leave no stone unturned.
Then and only then proceed to ask Uncle Sam for a loan. Democrats and Republicans alike will be far more likely to approve such a measure when they are convinced that it’s not the same old Detroit asking for a handout. Sans total and immediate reform, the same volatile situation remains. Let’s fix this right and ensure this industry continues to thrive in the future. It certainly is in the best interests of all US citizens to make it so.
Soon, a new, smaller, leaner, more savvy and more efficient GM will emerge and their car sales will be flourishing again.