Is Anyone Dumber Than a GM Executive?

By J.S. Smith

08.07.2008

I am hardly a snarky, cheer-as-the-Titanic-sinks sneerful spectator. I root for the home team and I’m a life-long member of the GM family. Indeed, I worked on the assembly line many years ago at Lansing’s GM North Assembly Plant making Grand Ams and Achievas.

But GM’s management is quite simply stupid. Astonishingly so. Case in point from Autoblog:

Testing of the Chevy Beat is officially underway. . . The Beat will make its production debut sometime in 2010 and will go on sale in Europe in early 2011. As previously reported, the Beat won’t be making the trek to the U.S. until it meets the fed’s crash-test standards, so we won’t get a shot at the Beat until the next generation arrives – whenever that is.

The monumental short-sightedness of not bothering to have the Beat US-certified boggles the mind. It qualifies as less a business move than a bowel movement. The people in charge at GM shouldn’t get salaries from anyone. They should be cleaning chewing gum from sidewalks.

This is particularly egregious in light of the fact that Toyota is bringing the 2009 Yaris 5-door hatch to the states. And Ford’s decision to build some of its tasty Euro models in North America. Even more offensive is the fact that when the Beat (as well as the Trax and Groove) was first displayed at the 2007 New York Auto Show – yes, in the US – and GM had the nerve to pretend that there was a possibility of one or more of the models might be sold in the US if they were well-received by the media and public. Well, they were well-received, partially because of a contest sponsored by GM for the public to vote for their favorite of the three, but it was later revealed that GM had no intent of ever selling them in the US – at least in their first generation. (N.B.: You can still vote on the site; since the Beat was in the lead with 887,666 votes, at least GM may have been listening to customers by greenlighting that one for production, although they mostly were asking US consumers and not the global audience that will get the car instead.)

Not only was GM being idiotic in its decision to not have the Beat available for sale in the US in its first generation when consumer demand for small, efficient vehicles is at a fever pitch, but the company was also dishonest about its intentions and plans for the small cars with the public. An executive team that obviously sneers at small cars (and their smaller profit margins) while instead focusing its collective energy on large crossovers and trucks is not one that excels at contingency planning.

This is how you go from a 50% market share to under 20% in a generation. Trained monkeys could do better than the crumb-bums in the RenCen.

PS: Yes, Chrysler has even bigger problems, but given that they had a nine-year relationship with Count Daimler-cula, I am more willing to cut them slack.

COPYRIGHT Autosavant.net – All Rights Reserved

Author: Chris Haak

Chris is Autosavant's Managing Editor. He has a lifelong love of everything automotive, having grown up as the son of a car dealer. A married father of two sons, Chris is also in the process of indoctrinating them into the world of cars and trucks.

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9 Comments

  1. I really am starting to believe that GM and Ford are hedging their bets in the belief that fuel prices will fall enough in the near future so that their present product line will become appealing again to the US market.

    But even if the pump price drops to $3.50 a gallon average by the end of the year, the idea of future product planning seems lost on these folks.

    Good looking, small, high MPG cars, that are optioned to the hilt (leather, sat-nav, auto climate control, etc…) could be very profitable. Why the big three don’t see that is a mystery to me.

    If I were a Ford or GM stockholder (as a PERS retirement plan member – I guess I am one) – I’d be tossing some hard questions at these guys…

    Or maybe they’re banking on a FED bailout if things go really pear shaped…

  2. I love GM, I’m a huge fan of the company, and I want them to succeed, and the whole thing with the Beat is puzzling to me, too. What in the world were they thinking on that one?

    I know they have the Cobalt replacement coming in 2010 that will have 1.4 liter that’s supercharged that will get somewhere around the mid-40’s in fuel economy, but why not have ANOTHER great-looking little car to offer in the marketplace that gets over 40 mpg?

    General fan

  3. My advice to the author is to be less tentative in his criticism.

    Don’t hold back, man! Tell us how you really feel!

    Don’t soft-pedal it. Get it all out.

  4. When you read the article about Ford above this article, it really makes you wish that Mulally had gone to GM instead. The contrast between what Mulally is doing at Ford and what Wagoner is doing at GM is night and day. That guy Mulally gets it and he’s willing to make huge strategic moves to save the company. When he got to Ford they were in much worse sahpe with much worse prospects than GM, and now I’m thinking that maybe Ford is a much better bet in terms of survival.

  5. the answer to that is yes: a Cerberus executive. In the same year they invested in GMAC and Chrysler, two businesses poised to implode.

  6. Hey maybe GM didn’t see $4 gas coming, just like everybody else. No auto company was really prepared for that development.

  7. Well, Cerberus execs must be feeling a bit chastened these days. Hopefully, they are being honest when they say they don’t want to strip-and-flip. Again, I’m more sympathetic to Chrysler because its lifeblood was drained by its encounter with the Germans. Of course, Cerberus presumably had a look at the horror that is Chrysler’s upcoming model line-up. Caveat emptor, I suppose.

    Maybe GM didn’t see $4 per gallon gas coming, but given that less then three years ago there was a huge price spike after Katrina, they were on notice that price spikes were no longer confined to the 1970’s. Being on notice, they should have planned for it. Instead, GM responded by rushing the new full-suze SUVs to the showroom. What kind of long-term strategy was that in the wake of Katrina or concerns about global warming?

    Mind you, these were decisions made by the elite of the corporate elite, men and women who make millions of dollars. This is what the stockholders pay so much for? These are the people who now must ask for sacrifices from the UAW? For help from Uncle Sam? Any one of us could have made more intelligent and predictive decisions than the ones made by GM’s execs.

    I don’t entirely blame the Big 3 for riding the SUV profit parade, but they’ve been losing market share for years, mainly to smaller cars. In the 1990’s, they seemingly gave up on the car market in favvor of light trucks. They put their best product development into one segment of the market and are now reaping the wind.

    Moreover, none of them have made much profit in the last several years–at least not in North America. Toyota, Honda and Nissan have been making money here, and doing it on a diversified line of vehicles. Consequently, those makes were prepared. They have seen their profits decline, but I think GM would be happy to have any profit at this point.

    In addition, it’s not just the past few years. Not that long ago, GM wasn’t just the largest auto company in the world. They were the largest corporation period. They had the largest profits and the greatest return on capital of any large company in the world. They owned appliance brands, tech firms, aircraft makers, satellite companies, etc. What the hell happened?

    Instead of building a team concept in the plants, Roger Smith signalled his intent to replace autoworkers with robots. Didn’t work out that well. Meanwhile, the Japanese were refining the team-concept, realizing that automation alone was not the answer to quality. It’s the system.

    At any rate, the results speak for themselves. I may not have a crystal ball that looks into the future, but the one GM has seems to be focused on 1970. And that ain’t gonna cut it.

  8. gm is riding on fumes, they need to get it together soon or they will have to park the car and walk home

  9. If you think GM’s future rests on whether or not they can sell 20,000 (low-profit) minicars a year earlier than scheduled, you are delusional. This is a very minor issue among all the others GM has right now.

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