GM has their rally caps on
General Motors has started to run television ads, asking
Americans to ‘put on their rally caps.’ What is most
disturbing about this message is that management of
GM might really believe that wearing an inside-out
baseball cap will turn the company around. Make no
mistake, there has been no attempt by management to
actually repair any of the crippling problems sinking the
company over the last handful of years. I suspect they
have used up all the lucky rabbit’s feet that they
purchased with our tax money and are now turning to
other forms of superstition to save their jobs. GM’s
strange behavior is not limited to the last few weeks. It
is instead a pattern of behavior suggesting their lack of
judgment. Permit me to highlight some specific
examples of GM’s insanity.
GM has not turned a profit since 2004, that’s four
straight years of losses. GM, no longer able to pay their
bills, decided to “restructure.” But wait, that’s not
entirely true. It was only as a contingency of
government support that GM produced a plan to
revamp the company into something that will survive in
the future. Apparently, GM management thought four
years of poor results were not enough to warrant a
rethinking of their strategy. After the GM plan was
reviewed, President Obama fired the CEO of GM. We
can infer from this action, that GM consulted neither
reality, nor accountability, when they formulated their
plan. I guess things were not bad enough yet.
Let us not forget GM’s focus on the relevant issues and
technologies of the time. Our world is faced with global
warming, depleting petroleum reserves and the worst
economic downturn since the great depression. Seeing
these issues GM management turned their attention to
crafting something that would solve all of those
problems-the Corvette ZR1!
The Corvette ZR1 is GM’s brand new top of the line,
high performance super car. The ZR1 is based on the
already high performance Corvette coupe and has been
engineered to compete with the likes of Ferrari,
Lamborghini and Maserati. The 630 horsepower ZR1
can keep up with many of the neighborhood super cars
that the 430 horsepower standard Corvette couldn’t
quite catch. And the ZR1 is only double the price of the
standard Corvette, and way cheaper than any
comparable Ferrari or Lamborghini, for those who are
budget conscious. For the environmentally conscious
the ZR1 gets 14 miles per gallon (MPG) city and 20
MPG highway. That’s like planting a tree every time you
floor the throttle. The sheer irresponsibility of focusing
resources on a pet project, during a time of crisis, is
indicative of GM management’s lack of judgment.
There is a compelling reason for GM not to focus on
small to midsize economical cars for ordinary people.
They are good at making big cars. Remember the
Pontiac GTO of the 1960s, big engine, lots of power. It
started the muscle car era. It was probably one of GM’s
greatest successes. GM was good at making big
powerful cars.
On the contrary, GM is not good at making small cars.
The 1970s saw conditions similar to today, high gas
prices, new environmental rules and poor economic
conditions. This era saw some of GM’s humblest
moments attempting to make small economical cars.
Does anyone remember the Chevy Vega or the sporty
Chevy Monza. Those cars were so bad their tales can be
used to scare auto executives the way the boogyman is
used to scare small children. GM does not want to
repeat their bad experience with compact cars, and who
could blame them. Its not like Toyota, Honda, Nissan,
Volkswagen, Renault, Fiat, Hyundai, Kia, Mitsubishi,
Mazda, Ford, and Chrysler have decent compact cars
right?
How about GM’s lackluster attempt to make a fuel
efficient car? GM does market several “hybrids,” which
are nothing more than gasoline powered cars with
modest electric boost. The hybrid Chevrolet Malibu gets
26 MPG city/34 MPG highway, the hybrid Toyota Prius
gets 48 MPG city/45 MPG highway, while the hybrid
Honda Civic gets 40 MPG city/45 MPG highway. I guess
GM missed the day hybrids were taught in auto
engineering school.
GM has indicated that the technology is not yet
available to make an effective electric car. But wait, GM
did engineer a famous electric car, way back during the
1960s. GM engineers designed the lunar rover, the
electric car that transported astronauts across the
surface of the moon. Let us step back and put this into
perspective. GM engineers designed an electric car that
survived launch in a giant rocket and a trip to the
moon. The car was then driven across the dusty lunar
surface in the vacuum of space, quite a feat of
engineering. Hasn’t GM learned anything new about
electric cars since then? Consider that the entire history
of the personal computer took less time than has
elapsed since the lunar rover. I guess GM got upset
when the astronauts left the rover on the surface of the
moon, instead of bringing it back for a trade-in.
These examples highlight what appear to be poor
judgment, ineptitude, and most of all poor management
by those running GM. If the government intends to
save the company, there will have to be many more
management changes. It remains to be seen how deep
the surgeon’s scalpel will have to go, before the patient
can be saved, I suspect it will be deep. Hopefully,
someone with accountability can be found to make the
cut.
April 6, 2009
