On Jan. 21, 1988, a General Motors executive named Elmer Johnson wrote a brave and prophetic memo. Its main point was contained in this sentence: “We have vastly underestimated how deeply ingrained are the organizational and cultural rigidities that hamper our ability to execute.”
On Jan. 26, 2009, Rob Kleinbaum, a former G.M. employee and consultant, wrote his own memo. Kleinbaum’s argument was eerily similar: “It is apparent that unless G.M.’s culture is fundamentally changed, especially in North America, its true heart, G.M. will likely be back at the public trough again and again.”
These two memos, written by men devoted to the company, get to the heart of G.M.’s problems. Bureaucratic restructuring won’t fix the company. Clever financing schemes won’t fix the company. G.M.’s core problem is its corporate and workplace culture ”” the unquantifiable but essential attitudes, mind-sets and relationship patterns that are passed down, year after year.
Mr. Brooks, as one who has swung his share of brickbats your way, I now applaud this clear thinking and analysis. Welcome to the American Corporate State. Will our trains run on time?
What I want to know is where are all those “liberals” that wailed and rent their garments over corporate welfare? Is this not the very epitome of same?
I just heard on the radio that GM “sold” it’s “Hummer” division to China.
Now the big questions are:
Will they continue to build them here or there?
If ‘there’, will they continue to build them for US distribution?
What happens to the plants/workers in the US who built them up until now?
Great way to stimulate the economy — the problem is the economy being stimulated is China’s!
Oh, one more question,
Under Obamunism, will we even be ALLOWED to own a Hummer anyway, even if they do continue to build them here?
I’m no expert on the car industry, but I think David Brooks’ devastating analysis makes excellent sense.
Changing corporate culture in an entrenched company like GM is much harder than would-be reformers usually realize, for there are so many people (and not just the union workers) who have vested interests in maintaininng the status quo and are resistant to radical change, with all its uncertainties and threats to their interests.
Remember the start up of Saturn? It was supposed to revolutionize GM. Well, that approach sure worked, didn’t it?
The Obama administration is keen on having an exit strategy from the quagmire in Iraq. But Brooks parting shot is all too on target. There appears to be no such sense of urgency to develop an exit strategy for getting out of Detroit.
To err is human, tis true. But to really screw things up, just get the federal government involved in running it.
David Handy+
There was an easy way to take care of GM. It’s called bankruptcy. Companies either restructure or liquidate. It all depends on the specific circumstances. I predict what we will have here is another Amtrak. Remember that one? A few years in reorganization and it will be profitable and on its own. Right.
I for one will never buy a GM or Chrysler product as long as it is a part of Obama-motors. I have pulled my investments from nationalized banks. I will not support this with one more dime than I am legally obligated to through the IRS.
All the crap about their culture not changing. That is what bankruptcy is about. If you don’t compete you die or restructure. The real big screw-ups liquidate. And liquidation means assets go elsewhere to be productive. I have been through that. It works.
Good points. Not sure how anyone would come out clean on this one, however. How does one allow people to keep their pensions, continue to make cars, and ensure that people don’t get thrown into poverty?
I think we’ll have to wait an see on this one. GM did such a poor job, not sure why we should think the government would do worse.
[blockquote]Good points. Not sure how anyone would come out clean on this one, however. How does one allow people to keep their pensions, continue to make cars, and ensure that people don’t get thrown into poverty? [/blockquote]
A. The pension plan still has money in it, albeit not enough to cover promised payouts. Then again, the plan isn’t a secured creditor of GM, so they’d presumably have trim benefits for future beneficiaries.
B. Why do we want GM to make cars that people obviously don’t want?
C. That’s not GM’s job.
[blockquote]GM did such a poor job, not sure why we should think the government would do worse.[/blockquote]
GM fouled up with its own money. Government Motors will do it with my money. That’s worse.