How I Would Save General Motors; How Would You?

cad-escalade-truckAs a former employee and long time automotive industry veteran, it pains me to see General Motors continue to slowly disintegrate.  The causes are many -ranging from falsely believing they are building what Americans want, to thinking that all their brands are relevant in the market. As a result of years and years of market leadership, Generous Motors has grown old and crotchety.  GM has been unable to recognize that the world is changing around them and unwilling to change with it. How else can you explain the optimism expressed each year as their market share has declined? How strange it is to hear one executive after another brag about the virtues of their overlapping products and brands? And how odd it is that the largest company has done the least to address it’s own overgrown bureaucracy? But the old ship GM which has taken too long to change course has hit an iceberg and is taking on water fast. Can ships this big be steered faster? They have no choice but to do so, and doing so requires drastic measures which are foreign concepts to a large, ponderous corporate culture.

But automotive manufacturing is critical to the U.S. economy because it’s a high technology, high value product that creates wealth and security. Without GM, the domestic auto industry might see Ford and/or Chrysler gain some share but overall domestic make share would certainly drop as some GM defectors will choose import brands. 

So here are a few ideas that might help GM survive more than the next few months (and stop asking for tax payer money!):

  1. Focus on products, not brands. Brands are built from, and are a direct result of great products. Great products make great brands – not the other way around. Things start to go downhill fast when companies start trying to create products to build a brand. The product should come first. A lot of people don’t know this but most Lexus and Scion products are just rebadged Toyotas.  Toyota had the boxy Scion already on the market in Japan and could easily bring it in the U.S.  The Lexus SUVs are also existing Toyotas in other markets. Lexus itself only recently launched in Japan and people there are wondering why they should pay more for a Toyota. Of course once you have a product, it may make sense to sell it under a different brand as Toyota has done in the U.S.  And Toyota with such a wide range of capable core products, they can re-brand as local markets desire with minimal investment and development.
  2. Eliminate the conglomerate of General Motors. The GM entity only dilutes and confuses customers, employees, engineers. Am I buying a GM or a Chevy? Is Saab a GM or Ford? Is Pontiac a Ford or GM? How is GMC different from GM? How does Chevy fit within GM? Asking and answering these types of questions is a complete waste of effort and money. Chevy should be asking how can we make great cars. And if the car turns out great – it will be a great Chevy – making Chevy a great brand. The name GM or General Motors should be invisible to the customer.
  3. Right size the company from an engineering perspective first. Build up a zero based model to support a full line of cars and trucks. Do not try to fill existing plant capacity, keep workers busy, and discount prices to move excess inventory.  Figure out how many cars you can design and develop into products of world class quality and performance, and then see how many brands this product development factory can support.  I figure this means a full line of Chevy cars and trucks, Cadillac luxury products, and perhaps 1 or 2 low effort, low engineering and investment lines (Buick or Pontiac or Saturn or GMC or SAAB, or Opel or Vauxhall or Holden or Hummer but NOT all of them!  This is similar to Mercury for Ford which really doesn’t cost very much to keep and only 1 badge engineered brand doesn’t confuse customers. Toyota has Scion (where the products were already there). BMW has Mini. Honda has Acura (Acuras’ are also Hondas in other markets much like). 
  4. Benchmark employee efficiency with other companies and be better than them.  With so many brands and similar models, GM has too many people, too much indirect cost, too much infrastructure, etc supporting them all.  With fewer brands and models, there is a great opportunity to right size the employee and company base.
  5. I’ll add more as I think of them but feel free to comment with your own!

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