Since being forced into bankruptcy and becoming largely government controlled, has beleaguered American automotive giant General Motors really changed? On the face of things the answer would seem to be yes. Bowing to pressure from the Obama administration CEO Rick Wagoner stepped down on March 30, 2009, walking away from a company that had already accepted billions of dollars of federal money.
Jobs went by the wayside — probably as many as 25,000 more will disappear by 2011. The dealer network has shrunk 40%. Pontiac is being phased out. Opel and Hummer are up for sale. And, in the most bitter blow of all, the company lost its cherished 77-year-old hold on the title of world’s leading automaker when rival Toyota outsold them in 2008 by 616,000 units.
Now out of bankruptcy proceedings and considerably trimmer financially, insiders report more open shirt collars and fewer ties on the necks of executives walking the once buttoned-down GM halls. But the real question is, does GM now understand that the days of massive, gas-guzzling SUVs are coming to an end? Will they rely solely on the much-hyped Chevrolet Volt electric-hybrid to generate “green” street cred? Or, will they take a long, hard look at their product line and make the smaller, more fuel-efficient cars consumers want? Those machines will be the ones that can compete with the more successful Asian competition and put GM back on top.
It’s important to remember that at the same time GM has divested itself of massive debt, negotiated a more favorable position with the United Auto Workers, and is working on eliminating less successful brands, there has also been considerable personnel turnover. Mostly new faces fill the offices in the departments of product development, manufacturing, human resources, research, and marketing. These new minions work for new bosses who are emphasizing the need to listen to and work toward valid market desires and realities rather than blindly hewing to an out-dated perception of the automotive world.
In an August 13, 2009 editorial for The Detroit News, “GM’s Culture Change Has a Ways to Go,” columnist Daniel Howes hit the nail squarely on the head, writing, “Each new model year answers again whether GM has the hardware to compete against the best in the world. It does. But if it doesn’t have the right people building new relationships with the right people and, yes, the political class, it increases the risk of a final failure — and its brass would have itself to blame.”
General Motors has always had good products, but in the end a poor understanding of a changing market caught up with the company as much as its tendency to compound debt while over-confidently assuming the next year would be better. Now, moving forward with fewer brands and more innovative offerings bodes a brighter future. The same can be said for the advantage of fresh faces in key positions. GM has been given a second chance on the public’s dime. If they successfully leave behind the bad habits of the past, the company will survive. They better make it, because the chances of an additional government bailout are slim to none.
