Democrat From Kentucky: You Might Be a GM Executive If...

If you don't have to take responsibility for your shortsightedness.

If you can lay off thousands of workers multiple times a year after you already shaft them on insurance rates

If you lack vision in developing your automobiles and don't have sufficient insight to innovate for the future

If you put all your eggs in the SUV basket

If you didn't think the price of oil would screw with your sales

If you didn't take a massive paycut and worry about losing your own job either.

General Motors announced yesterday they would cut 30,000 jobs and close all or part of 12 facilities. The main reason is to help deal with Japanese automakers like Toyota who're moving up in the world. Toyota is the number 2 automake in the U.S.

It's odd. GM has more selection, more labels, product lines etc. The problem is most of their lines are the wrong product. It's all SUVs. They placed all their eggs in the the back end of a Yukon and they can't afford to drive it now.

This will butcher he economies in the communities these plants are in because these types of jobs usually pay well and industry goes up around them. Whole towns will dry up.

Competition is only part of the reason though. Like so many others in corporate America, they lack vision to out-hustle their competitors. GM and Ford both could build the vehicles they need to build. They just didn't have enough foresight to notice that fuel prices wouldn't last forever. One would think as much money as they companies spend on marketing and advertising, they'd have some to spend on R&D so they could not only figure out what people want to drive but have enough things in planning stages to make modifications as need be. Heck, it wouldn't surpise me if Toyota tried to buy GM in a few years. The people in this country are willing to work but the executive management in corporations, just like in politics, have to be willing to look into the long term, not a year or two down the road but 6 or 8 down the road and 10 or 15 down the road and even further. They just don't have it.

posted by Stithmeister @ 11:18 PM

2 Comments:

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At 11:22 AM,

RightDemocrat said...

I agree that GM has made some very poor decisions, but the primary cause of their present situation is employer responsibility for health care. All other industrialized nations have national health insurance and that gives them a tremendous competitive advantage over our companies. Free trade has hurt American workers although not GM since they can always open plants outside the U.S.

I have always purchased union made American vehicles. For a time in the 70's and 80's if it were not for my strong labor movement orientation, I would have driven a Japanese car. The quality of American vehicles has improved considerably over the past 15 years or so. Our standards are now on par with or even better than the Japanse. U.S. companies just need to keep pace with changing demands and health care reform would help greatly to make our companies competitive.

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At 2:18 AM,

Stithmeister said...

I would have to say I completely disagree with you on this one. I think the GM execs are almost completely to blame on this one. Their lack of vision and foresight is what created this catastrophe more than anything.

GM thought hydrogen would be their big thing in a few years and figured the SUVs would hang on until then. They failed to watch the energy market, watching prices rise because of significantly increased consumption in foreign markets like China and India. They haven't made significant improvements of any kind in the direction of fuel conservation, either through hybrids or something else.

GM hasn't done much of anything in the way of new cars in years. They'll build new SUVs or they'll introduce a new model of Cadillac, but they've done nothing to develop economical and appealing cars in quite some time. They may rework what they've got somewhat but nothing that catches the public eye.

A huge business can be supported and can survive even in the heaviest competition but it means innovation and not resting on laurels. Ford has had the same problem. The best thing that happened to Chrysler was Daimler execs taking over. They've been producing new products. It all comes down to moving product and GM's not doing it. It's as simple as that. They may be somewhat hamstrung by the unions but they wouldn't be in any of this shape if they were selling attractive, quality products they appeal to the market. If they can't do that, it doesn't matter what the unions do or don't do.

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