It’s about a week post-bankruptcy and billions of dollars more in tax-payer bailout, and I still don’t have any confidence that GM management can lead the company towards long-term success. GM’s “re:invention” Web site is downright scary. The CEO’s message is, “We’re going to get the job done.” Mark LaNeve says, “We’re going to build cars and take care of our customers like we always have.” Neither of these messages talks about real change. I don’t want GM to continue doing more of the same, albeit smaller and leaner.
The company must change its culture and how it does business if it truly wants to be successful for customers and employees over the long-term. John Kay’s column in the Financial Times points out the fundamental challenges facing GM:
The factors that had once been the company’s strengths were now weaknesses. Mass production and piece-rate incentives created a workforce with little pride in the quality of the product. The cadre of professional managers became a complacent, inward-looking bureaucracy. The diversified corporation became a collection of competing baronies.
The Saturn story is a good example of how GM’s culture gets in the way of its success. A comment to Dan Muhern’s blog post, GM and You, includes a reader's description of the problem from a customer’s point of view:
GM gave up a good thing, and decided to waive the white flag a decade ago. GM had decent fuel economy with the GEO metro and Saturn SL series. Now 15 years later GM can’t break the 34 mpg barrier with out going hybrid. What happened to R&D? I drive a 00’ Saturn SL. It has been a wonderful car. For the 1st 100,000 miles I was achieving 38-46mpg. The 2nd 100,000 miles achieved 37-41mpg. I’m still working on the 3rd 100,000 miles but I’m still getting 35-40mpg. It is plastic so it will never rust and is lighter than standard metal cars. The car is 95% made in USA. We can make good cars domestically. I would buy another new 00’ Saturn SL in a heart beat today, but after 9yrs of R&D GM doesn’t offer a car with equivalent gas mileage.
Now GM is selling what was once one of the best-managed, most successful divisions in the company. Saturn was known for customer service, high quality, and a satisfied workforce, in part due to great training for employees and autonomy from the mothership. I’m pleased to hear that Penske is buying the division, but it is very sad that the GM culture couldn’t allow the company to learn from Saturn. I remember back in 1990, at the time Saturn was created, the word on the street was that GM would never let it succeed over the long term...and here we are.