What I Would Do If I Could Save GM?

Onbrands emailed me a thoughtful response to my previous posting, along with a challenge:

…what would you say that Big Three need to do to win consumers back? Let’s say you are the CEO of GM, what is your plan to win consumers back?

Well, let’s assume that GM can be saved. Probably the biggest issue with betrayal is that people who have been betrayed cannot stand the existence of the betrayer and, if they have the power, will wipe the betrayer out of existence. Past that, there are serious questions about whether the company could even be saved now. Bankruptcy usually starts long before the actual financial collapse, and General Motors is no exception — inability/unwillingness to build small cars, an embraced blindness to quality issues, an inability to trim costs in management (heck, they ended up doing stuff that bloated the managerial ranks) that probably exacerbated its labor issues, and an inability/unwillingness to trim their system at all levels (laws made things hard, but that just meant they would have had to take a longer view than they were willing to do with the franchises), bizarre additions (HUMMER, anyone?). Add to that the nationwide hatred of and for General Motors, and you have a recipe for the death of an industry (and the celebration for that death — British Leyland may have been doomed, at least the British Automobile industry was properly mourned).

But…assuming they can be saved, here’s my prescription for what needs to be done to save GM:

  • Do not fear bankruptcy. Sometimes desperate times call for desperate measures, and your situation is desperate.
  • Save what can be saved. I would save two brands right off the bat: Chevrolet, which even in its weakened state sells over 1/8th of the cars in the United States, and Cadillac as the high-end brand with a strong identity and marketplace acceptance.
  • Figure out what would make a good mid-level car company. The Pontiac/Buick/GMC attempt is a start, but it’s a bit clunky. I wouldn’t mind seeing the Oldsmobile name revived, as it has the feel of the family/middle class identity, unlike Pontiac (sporty), Saturn (oddball revolutionary-wannabee) or Buick (entry-level luxury). Maybe keep the Pontiac moniker to identify the more sporty versions of the brands, and the GMC model name actually makes sense for trucks sold outside the Chevy line.
  • Dump the rest of the brands. Saturn…off to the moon with you. Hummer…Fuck Off Goodbye. Buick outside of China…Goodbye. Saab…Here, Sweden; you deal with it.
  • Thin out your management ranks. Do you really need fifteen layers? Figure out a way to simplify things, maybe redevelop a form of your former structure where the companies had some independence and their own brands (instead of badges and cosmetic changes). The simplification of brands should help, and should force the shrinkage itself. I would also suggest focusing on cutting the bean-counters more than the others; as you seem to do that more than is healthy for a company.
  • Deal with the unions. A butchering in the Management ranks will make this easier, both in cutting down the scope of what you need to get from the Unions and in making the Union easier to deal with (When workers in power see a bloated bureaucracy asking for handouts from the workers, the workers most obviously fight back. Cut management fat and the deal gets easier, even if it’s from fear.).
  • Clean up the distribution network. The Saturn Dealerships will be easy to dump , but there needs to be a lot of cleanup. Also, you should push for a national set of rules for franchises instead of the 50 separate state rules which now make things hard to deal with.
  • Admit your mistakes to your public. You now do this on occasion under circumstances that make the public suspicious of your motives, maybe this time pound it in people’s head through advertising. A year of this as your main advertising line will at least make people think you’re really contrite over your past mistakes, unlike now when you do this when you hit us up with money or try to foist a guilt trip on us for buying Japanese/Korean/Euro brands instead of your stuff.
  • Mean the admission. Like what you did at Buick City when Michael Moore declared you were getting ready to close the factory and you turned around and worked at things until you made what was then the best car made in the USA (Buick LeSabre). Only this time make it company-wide, with every model and version of model. This will take years, keep it up and word will spread.
  • New blood in the management and design/engineering departments. Maybe during your cutbacks in management, you could overcut with the idea of hiring newer, brighter blood when the time came to refill the ranks. Again, add bean-counters only as to what’s needed. Focus on car lovers for your new hires.

It will take lots of money. Money that could easily go elsewhere, and thus will have to be justified.

And the sad thing about this? You could have probably gotten away with this back in 1990-1991, when you were in a similar position. You wouldn’t have needed to go so far in fixing yourself, either. Such mistakes as the Hummer or the Buick Rainier were still “in the future,” maybe they wouldn’t have been made. Fewer brands would have needed to be cut, maybe one or two (the more logical ones) instead of the holocaust now needed (assuming success).

But one must do now what one can. At least try to do it, anyway.

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