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Bob Lutz, ex of GM, has written an interesting book called “Car Guys Vs. Bean Counters,” that talks about why it makes sense to let people with a passion for a given business run it, rather than turn it all over to the accountants and finance guys. That’s the way McDonald’s, my alumni group, has been run for most of its nearing 60 years.

My own early experience as a budding “car guy: for Toyota, largely peopled by really frustrated ex-US car guys, in the years when Detroit had lost its way, helps make Lutz’s point. My essay on that period — Acceleration — can be found by searching for that title at http://www.chilit.org.

Here’s Amazon’s summary of Lutz’s new book:

“It’s time to stop the dominance of the number-crunchers, living in their perfect, predictable, financially-projected world (who fail, time and again), and give the reins to the ‘product guys’…those with vision and passion for the customers and their product or service.”

When Bob Lutz got into the auto business in the early 1960s, CEOs knew that if you captured the public’s imagination with innovative car design and top quality craftsmanship, the money would follow. The “car guys” held sway, and GM dominated with bold, creative leadership and iconic brands like Cadillac, Buick, Pontiac, Oldsmobile, GMC, and Chevrolet.

But then GM’s leadership began to put their faith in numbers and spreadsheets. Determined to eliminate the “waste” and “personality worship” of the bygone creative leaders, and maximize profitability, management got too smart for its own good. With the bean counters firmly in charge, carmakers, and much of American industry, lost their single-minded focus on product excellence and their competitive advantage. Decline soon followed.

In 2001, General Motors hired Lutz out of retirement with a mandate to save the company by making great cars again. As vice chairman, he launched a war against the penny-pinching number-crunchers who ran the company by the bottom line, and reinstated a focus on creativity, design, and cars and trucks that would satisfy GM customers.

After emerging from bankruptcy in 2009, GM is finally back on track thanks in part to its embrace of Lutz’s philosophy, with acclaimed new models like the Chevrolet Volt, Cadillac CTS, Chevrolet Equinox, and Buick LaCrosse.

Lutz’s common-sense lessons, combined with a generous helping of fascinating anecdotes, will inspire readers in any industry. As he writes:
“It applies in any business. Shoe makers should be run by shoe guys, and software firms by software guys, and supermarkets by supermarket guys. With the advice and support of their bean counters, absolutely, but with the final word going to those who live and breathe the customer experience. Passion and drive for excellence will win over the computer-like, dispassionate, analysis- driven philosophy every time.”

 

I saw on a Morning Joe crawl this AM that Toyota reported a nearly 7% sales decline in the U.S. for last year, attributing it to a parts shortages out of Japan and Thailand due to the earthquake and tsunami and flooding. Could it be that the real catastrophe for Toyota was the combination of erosion of their own quality reputation due to the U.S. recalls earlier in the year, together with a resurgence of competitiveness by the U.S. auto industry, which reported double-digit gains for the year? Toyota is still a great auto company, but they are now playing on a much more level field in the U.S. than for many years. It’s not so much that their reputation has been eroded, at least not permanently, just as they will recover from the weather troubles in Asia. But the reputation of the U.S. auto industry for style, engineering and quality has been restored. My personal cars for almost 50 years were foreign built — now we drive two GM vehicles, and we love these cars.

Here’s the sales story: http://mdn.mainichi.jp/mdnnews/business/news/20120105p2g00m0bu075000c.html

February 2023
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