Retooling GM

I found this report from a consultant on an autoblog post and thought it was rather interesting. The comparisson between the cultures of North American GM vs Fast eastern operations is very interesting.

enjoy.

http://www.umtri.umich.edu/content/RetoolingGM.pdf

An interesting read. In true capitalist system, this would be a self correcting problem. They would fail and either go out of business or be taken over by the people who could make the decisions to turn the company around. Unfortunately, our congress, to soothe the powerful and the unions has decided to prop them up and delay the inevitable. I guess we will see what happens.

the inevitable.

Yessir, the various GM divisions view each other as the enemy. That's been happening for years. For instance Chevy and GMC each barely acknowledged the others' existence. I asked a question of a GMC service rep once concerning something Chevy would fix as a goodwill gesture (springs breaking on valve stem seals). His response? 'That's Chevy. We are GMC.'

I can also vouch for the adversarial dealer relationship, you shoulda been there when the grand poobah of the Southeastern service and parts told us there were no problems with Delco fuel pumps and that he believed the technicians had found an easy fix that paid well under warranty and they were exploiting it. I thought my district rep was going to explode.

Ford had many of the same problems back in the 1980's. I had a feeling they had turned the corner when a plant assistant manager came down to our dealership and spent about 5 minutes talking about warranty claims.

When a claim was filed, it went back to the plant which built the vehicle and they had to investigate it, try to find where it happened and find ways to fix it which was a huge job that bruised a lot of egos, as you might imagine. He said that for years the plant management were absolutely positive the dealerships were just trying to put one over on them and blocked the payment of warranty claims whenever possible.

Then they started thinking, hey maybe these guys aren't making this up, maybe they are really seeing this kind of stuff out there. So they looked at returned parts etc more closely and realized yes there were problems in the field which the plant managers had tried to brush off. He then said something I thought I'd never hear: 'We apologize for doing that to you. It won't happen again.'

Jensenman wrote: Ford had many of the same problems back in the 1980's. I had a feeling they had turned the corner when a plant assistant manager came down to our dealership and spent about 5 minutes talking about warranty claims. When a claim was filed, it went back to the plant which built the vehicle and they had to investigate it, try to find where it happened and find ways to fix it which was a huge job that bruised a lot of egos, as you might imagine. He said that for years the plant management were absolutely positive the dealerships were just trying to put one over on them and blocked the payment of warranty claims whenever possible. Then they started thinking, hey maybe these guys aren't making this up, maybe they are really seeing this kind of stuff out there. So they looked at returned parts etc more closely and realized yes there were problems in the field which the plant managers had tried to brush off. He then said something I thought I'd never hear: 'We apologize for doing that to you. It won't happen again.'

Maybe that's why they are still solvent.

Thanks for that link. Really informative read.

This is not unique to GM. I work for a large, TARP-injected bank. We have several divisions for specific products and services which compete against one another. We have one product for which we have four different departments, depending on the type of client account.

Most of our competitors have one department for each product and they will execute transactions according to the rules and regulations for that platform.

Not my firm. We have four departments, three of which actively attack one another. The main department (the one which really knows the product) does say much at all.

Even Coca Cola spoofs this in their latest Coke Zero commercials in which Coke employees are ridiculed for drinking Coke Zero as if it is the enemy.

This reminds me of Monty Python: The Life of Brian when the two Jewish groups decided to attack the Roman garrison on the same night. They began fighting each other. Brian tried to get them to focus on the common enemy. Instead of focusing on the Romans, both groups identified the Judean People's Front as the common foe.

This is funny in a movie, but sad in real life.

Should have heard the cussing I gut at a local dealership for comparing the Isuzu i-290 to a GMC Canyon. The guy cussed me out so much for not knowing anything about truck quality I very nearly stuffed him in the back of my Jeep and dragged him to Baton Rouge to dump him in front of the Isuzu plant where they build his Canyon.

I was a bit hot that day, bad for him too, I had cash in hand to buy that truck too.

Retooling GM. Makes me think of taking out the idiots in charge (tools) and replacing them with new fresh idiots (tools.)

oldopelguy wrote: Should have heard the cussing I gut at a local dealership for comparing the Isuzu i-290 to a GMC Canyon. The guy cussed me out so much for not knowing anything about truck quality I very nearly stuffed him in the back of my Jeep and dragged him to Baton Rouge to dump him in front of the Isuzu plant where they build his Canyon. I was a bit hot that day, bad for him too, I had cash in hand to buy that truck too.

Sounds like the day I walked into a Dodge dealer to pick up some parts and there was an Omni in the showroom with the hood up. A salesman attacked me as I was wandering around and somehow the conversation got around to the engine and I said something about them using VW engines. He haughtily informed me that I was wrong; I finally had to show him the '4 circles' VW/Audi casting mark on the front of the head. He informed me that was a Chrysler casting mark and he wanted to bet me on it. Being the argumentive sort that I am I decided to take him up on that, we went out to the used car lot and found a Rabbit which had the same 4 interlocking circles on the head casting.

Wow a 1.7L Omni... THAT was the height of Chryslers best years!

Jensenman wrote:

oldopelguy wrote: Should have heard the cussing I gut at a local dealership for comparing the Isuzu i-290 to a GMC Canyon. The guy cussed me out so much for not knowing anything about truck quality I very nearly stuffed him in the back of my Jeep and dragged him to Baton Rouge to dump him in front of the Isuzu plant where they build his Canyon. I was a bit hot that day, bad for him too, I had cash in hand to buy that truck too.

Sounds like the day I walked into a Dodge dealer to pick up some parts and there was an Omni in the showroom with the hood up. A salesman attacked me as I was wandering around and somehow the conversation got around to the engine and I said something about them using VW engines. He haughtily informed me that I was wrong; I finally had to show him the '4 circles' VW/Audi casting mark on the front of the head. He informed me that was a Chrysler casting mark and he wanted to bet me on it. Being the argumentive sort that I am I decided to take him up on that, we went out to the used car lot and found a Rabbit which had the same 4 interlocking circles on the head casting.

This just goes along with my opinion that car salesmen rarely have any knowledge about the cars they sell, just how to screw the customer.

That is truly a profound article. And if anyone has a chance to read it, look into toyotas culture of continuous improvement. Its reaaaalllly eye opening. I work for a company who has adopted a lot of their fundamentals and truly incorporated them into their core culture. Its amazing how our company is excelling. I used to work for a major technology company. They were struggling with some of the same core problems GM is facing: incredible internal red tape and top down driven beurocracy that limits departments and drive internal competition and a lack of focus on eliminating waste and making tough decisions. My plants operation was sold to a third party logistics company, and all the employess of the site went as well. The use of Toyotas 6SIGMA and other continuous improvement tools as well as a very strong meritocracy has really helped turn this plant around in less than a year. Toyotas philosophy is really a "how to create a great company for idiots"...although you couldnt tell it from looking at Yoduhs current probs, but thats another story...

spitfirebill wrote:

This just goes along with my opinion that car salesmen rarely have any knowledge about the cars they sell, just how to screw the customer.

When my wife and I went to look at a new saturn for her, we looked at the Ions.. Of course she wanted the 4 door with leather and a sunroof and a autotragic etc etc etc, and I of course wanted the redline - supercharged at the time, 5 speed manual, with the quad coupe design (2 frameless suicide style doors for the rear occupants). When we were talking to the salesperson, I mentioned how cool it was a bigger company like GM was to grasp a bit of the tuning culture to institute things like boost and suicide doors ...things you would see on modified enthusiats vehicle, she blankly asked me what suicide doors were. Im not sure how, but she still sold my wife that sedan

Something that was said in that seems very true.. about how society has largely written off GM. It seems very very true. It is hard to find anybody who seems to enjoy the current offerings from GM or even thinks kindly of the corp.

I also like he mentions how the unions really are only a small part of the problem. Something I have been saying for a long time. They are just an easy scapegoat.

Scapegoated...yes, but they are the figurehead of the larger problem, and also the perpetuators of it...employess are not ranked based on Merit/value add. The UAW perpetuates the increase of overhead since they mandate a seniority based pay structure, not a structure that drives motivation for the employees through fair compensation for quality of work.If you tell me I can get a raise by sticking around and doing nothing, or I can maybe get a raise by working hard, but its not guaranteed, Im gona do nothing and wathc my piggy bank grow. Its nature of the beast.

create a merit based organization, and the rest will fall into place. I will do whatever I can to be a better employee if I think it will get me more pay, which will increase production, quality and eventually share prices etc...

I read in the NYT today that GM wants it core brands to be Chevy, Caddy, GMC, and Buick.

Buick I can see, they are huge in China. Caddy for the high end models, but GMC? really? I think Pontiac should stay on as the "sporty" models or something.

I also don't "get" GMC. It's the same damn truck!

I could see keeping Pontiac, but I could also see moving it's pedestrian models to Chevy and it's sporty models to Cadillac.

Or they could just axe all the brands and sell "GM" worldwide.

GM Corvette, GM G8, GM Cobalt, GM Silverado. Think of it.

4cylndrfury wrote: Scapegoated...yes, but they are the figurehead of the larger problem, and also the perpetuators of it...employess are not ranked based on Merit/value add. The UAW perpetuates the increase of overhead since they mandate a seniority based pay structure, not a structure that drives motivation for the employees through fair compensation for quality of work.If you tell me I can get a raise by sticking around and doing nothing, or I can maybe get a raise by working hard, but its not guaranteed, Im gona do nothing and wathc my piggy bank grow. Its nature of the beast. create a merit based organization, and the rest will fall into place. I will do whatever I can to be a better employee if I think it will get me more pay, which will increase production, quality and eventually share prices etc...

that is one problem with Unions.. I admit that. as I have stated before, I work both in and out of the union houses here in atlantic City as both a stage electrician and an A/V tech (depending on the house) and I can tell you in both respects.. they are the same.

I get paid the same wether I am hanging 40 feet up in the air atop some cable hung truss focusing lights (my favourit job and one of the most dangerous) or plugging cables into laptops for people to do powerpoint presentations.

Fair? no.. but honestly, I work hard and so does everyone around me. There are a few slackers, but eventually get caught and punished. Just the way it is. Being younger and new to the union scene, I do not get the calls that the older guys get, but my skills do get me jobs they cannot do.

I think before people criticise unions, they should try working under one. It never hurts to have both sides of the argument in your realm of experience

Sitting here in my office at GM Headquarters...

Divisions don't view each other as enemies. Ed Cole (corvair creator) changed the corp structure so that powertrains and the vast majority of parts are shared. Before when engines were built it would happen all to often that Chev would be bidding a major contract at the same time Pontiac (or other division) would be with the same supplier. This caused a great deal of problems.

Yes GMC is the same truck, but buying out the GMC dealer group and dealing with the billions it cost to close or amalgamate a brand is mind boggling. GMC exists because Pontiac Buick dealers need to be open to the truck market too. you MAY see GMC become the supplier of 2500 and 3500 trucks and Chev will sell SUV's and trucks up to 1/2 ton

for the longest time you could get 4-6 variations of the now defunct minivan

Pontiac Montanna Chev venture Buick _____ I forget Olds had a van Saturn

the point comes in that whether GM has one style of van or 6 versions they sell the same amount of vans day in day out. The reason for the extra models isn't driven by the manufacturer, but dealer groups. You can't have 2 GM dealers 2 miles away, one sells Pontiacs and Buicks, the other sells trucks, minivans,..ect. The guy selling the smaller niche market vehicles would get killed.

Toyota's Kizan (continuous improvement) hasn't worked that well for them look at their numbers. Biggest sales drop of a model in the last year... Prius @ nearly 50% , Biggest gain the Malibu at 41 %.

You move buick to china and reduce Pontiac to a niche brand of 1-2 cars (Pontiac announced they are cutting G8 production by 97%) then what does the local P.B.GMC dealer sell?

Toyota has less then 1/2 the dealers GM does, that alone builds value in a brand

Discontinue sales through private dealer network. Problem solved. 5000 Dealers are replaced with 2000 corporate test drive centers. These are staffed with knowledgeable folks who aren't trying to seal the deal, and thus aren't alienating people. They are salaried, and are there to inform the potential customer. Cars are ordered online, and delivered to the new owner's residence. Red carpet treatment optional.

The first automaker who pulls the trigger on selling direct is going to have a HUGE jump on the competition.

4cylndrfury wrote: create a merit based organization, and the rest will fall into place. I will do whatever I can to be a better employee if I think it will get me more pay, which will increase production, quality and eventually share prices etc...

I'm curious how you would do that with an assembly line.

"Sure, you put all the bolts in the right holes, nut brian here makes sure al the little "T"s on the heads face the same direction."

I can't imagine that someone would roam the plants looking for someone deserving of a raise, and if there was most people would say that was a nothing job that should be cut.

BUT Brian does not JUST put the t's the same way. When his line super is at the other end of the line he is walking around selling special brownies. Meanwhile Allen gets to work READY to work, stays at his workstation, suggests improvements to line operation that does not waste any company time or money, and most importantly... is not partaking of Brians special brownies.

DILYSI Dave wrote: Discontinue sales through private dealer network. Problem solved. 5000 Dealers are replaced with 2000 corporate test drive centers. These are staffed with knowledgeable folks who aren't trying to seal the deal, and thus aren't alienating people. They are salaried, and are there to inform the potential customer. Cars are ordered online, and delivered to the new owner's residence. Red carpet treatment optional. The first automaker who pulls the trigger on selling direct is going to have a HUGE jump on the competition.

Dell did that with computers. made out big time.

Then outsourced support to India.

and now they are suffering because off it

DILYSI Dave wrote: I also don't "get" GMC. It's the same damn truck! I could see keeping Pontiac, but I could also see moving it's pedestrian models to Chevy and it's sporty models to Cadillac.

The 'Realignment 2000' idea was that Chevy would supply work trucks and if someone wanted a higher end luxury truck they'd be steered to a GMC dealer.

I also stand by my earlier statement about their being a LOT of in house animosity between GM organizations. Maybe it looks different from the top but from the dealer level looking up damn it was evident. One easy way to seee this: if you have a GMC truck with a recall and there's a Chevy dealer 2 miles from your house, guess what: you have to drive right on past and go to the GMC dealer. Or at least that's how it worked when I was with the local GMC/Pontiac dealership. I even tried entering a Chevy vin for a claim for gits and shiggles; with my dealer code it spit it right back out.

I can do Dodge, Jeep and Chrysler warranty work here. When I was with Ford we could do Mercury warranty work.