Explanation, please.

thank you.

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Bankruptcy following maybe a short sighted scheme to defraud and cheat their newest stockholders (the US citizenry), who don’t even get any collateral for their ‘loan”?

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A very good topic. I found some of the comments very interesting and with a perspective not unlike views I have.

Roger Smith’s retirement package was and is an exammple of the dysfunctional management of corporate America. We continue to reward failre at the upper levels in corporations. It is not an over statement that there is a different standard that low level management and blue collar (hourly) workers have to adhere to if they fail to achieve. Where is the bold leadership at the top that leads by example? If my company does poorly why shoud I be exempt from the consequences is the question corporate leaders should be posing to themselves. For years the Roger Smith retirement and compensation pacakage has been followed and it illustrates the disconnect and lack of credibility big corporations have with the rest of the working populace.

When you keep hearing the corporations say we are not competitve and that our hourly rated workers have to be brought in line with the wages of foreign competitors, there is not the same comparison of compensaton levels,in some cases, with the corporate heads of foreign companies.

I agree with another comment that GM’s demise began when the company had bean counters run the company. Visionary leadership would have pursued a collaboration with car people, (engineers and designers) and marketing personnel to put aside territorial and egotistical conflicts to produce a good product.
The stuff GM put out in the 70’s was terrible. Saturn was an excellent automobile when it was initiially manufactured but it appears the company abandoned the concepts that made that a good product because it is not the same automobile it was when it was first produced.

GM’s product line has improved substantially and I don’t think it is a coincidence that this improvement has happened during the presence of Robert Lutz’s tenure with General Motors, who by the way is an automotive engineer.

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I’m a young professional but I worked in manufacturing plants during college.

I have several thoughts mostly quick ramblings.

1. Decisions need to be in touch with reality. The people that make the real decisions about manufacturing automobiles should do periodic tours of duty on the lines and in supply chain plants to gain perspective. I would suggest “under cover” elbow to elbow manufacturing stints for 3-6 month durations. Instead our auto power brokers may or may not do the red carpet tours occasionally. Historically when Henry Ford started the Assembly line ingenuity, he didn’t do it from his high rise office or lap top in the Caribbean. He was in touch with manufacturing and cars. He was on the manufacturing floor.
2. GM gave up a good thing, and decided to waive the white flag a decade ago. GM had decent fuel economy with the GEO metro and Saturn SL series. Now 15 years later GM can’t break the 34 mpg barrier with out going hybrid. What happened to R&D? I drive a 00’ Saturn SL. It has been a wonderful car. For the 1st 100,000 miles I was achieving 38-46mpg. The 2nd 100,000 miles achieved 37-41mpg. I’m still working on the 3rd 100,000 miles but I’m still getting 35-40mpg. It is plastic so it will never rust and is lighter than standard metal cars. The car is 95% made in USA. We can make good cars domestically. I would buy another new 00’ Saturn SL in a heart beat today, but after 9yrs of R&D GM doesn’t offer a car with equivalent gas mileage.
3. Commuter cars are in, enter the Yaris and Fit. The nifty/cool SSR, Thunderbird, Hummers etc. are limited luxury items and they won’t support a car company for long. People are trying to do more with less everywhere. It’s time we consider the stripped down people’s car, back to basic transportation.
4. “I’m NOT expressing my identity through my auto. I just want to get around economically, ecologically, and reliably.” The 60’s and 70’s muscle cars represented real identity. This is a different age. I think people’s attitudes about cars are changing.

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Dan,

Complacency is a drug and I am addicted to it. I was so comfortable and warm, there with my head stuck squarely in the sand…and believe me, I am NOT alone.

I started working at age 15 (McDonalds in Garden City, MI) and was never laid off, never fired from a job, and never without one until, without warning, on a warm August morning in 2004 — I was asked for my keys and my ID card, and was given 15 minutes to grab what I could and vacate my office. The clues were all there: The warnings about financial problems, the less-than-subtle shifting of responsibilities, and the odd looks on my coworkers’ faces. Yet, in my smug complacency and arrogance I did not see it coming. I did not think it could happen to me and did nothing to prepare for unemployment.

Dan, you are absolutely right about keeping out the “weather eye” for rough waters ahead. Yet, it can be tough if you are not the organizational leader to call the storm to the attention of a captain asleep at the wheel. My most recent experience on rough economic seas was a poor one. I heaved my share of the cargo, pulled the ropes to trim sail, and bailed like a madman — shoulder-to-shoulder with the rest of the crew (70+ hours per week). However, when we reached the eye of the storm and seas calmed momentarily, my captain did not hesitate to toss me overboard to lighten the load. It was “nothing personal,” they just needed my salary for “other projects.” Again, there was that terrible bite of harsh reality.

However, this time — I saw it coming and prepared. My resume was in circulation a month before I walked the plank. Had a bit of bad timing with the recession and all, but with unemployment benefits and a little bit of substitute teaching, we’ve been able to hold things together. My family and I are in a leaky row boat, but we have all our oars in the water and we are rowing together for the shore. The disaster has become something of an adventure, albeit a scary one.

The lesson for business leaders: It’s usually a combination of complacency and panic that scuttles your ship and you need all hands to man their stations. Jettison cargo if you must. Put passengers (and slackers) in lifeboats and send them on their way. You cannot run a ship without your crew, so find a way to keep them on board. Worry less about fixing the blame and concentrate on fixing the problems. GM is a huge ship and perhaps they should have remembered that the Titannic was also unsinkable — too big to fail and lacking lifeboats — the ultimate in arrogance and complacency.

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We need to take a closer look at Kate and their generation.

To them it is all about being valued and appreciated. I think that if people realized what a great difference each of us can and do make; that our economic recovery will be quicker and more sustainable. ~The TIP Lady

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In your second point below, you share ” Cultures must learn to encourage creativity and risk-taking and then learn from mistakes. Internal political squabbles have to end. Egos have to be managed; they are tremendous fuel sources, but they burn with great inefficiency by generating unnecessary and destructive internal differences.” Well stated and so on target.

We are working hard to get that message in front of companies and potential clients. We can make a difference.

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And while I’m not a financial wizard by any means — I won’t give you any advice — note that you’ll sell GM at a loss if you do sell now, but that so far this morning, their stock is up 15-20% from its Friday close. Evidently, there must be other folks who think that with GM’s restructuring, the company’s fortunes may rise again.

Having said that, I’ll be saying a prayer today for all of those GM workers over the years who sweated and toiled, and built equipment to defend our great country through a World War and other attacks on our country. And I’ll certainly be thinking about all of those who work in the plants that’ll be closing.

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Lack of long term planning, and greed did in the automakers. Economic efficiency is becoming the bane of our time. The poor guy who dedicated himself to GM and did all the nice things you write about is losing his job, or if retired, part of his benefits, like dental and optical, and what next? And that company stock he bought, because he believed in the company is worth a whole lot less.

The legacy costs should be of no concern, if the automakers had sent aside the money for the obligations all along, and kept it completely separate from corporate fingers.

There is something more than attitude, communications, and respect of individuals involved.

With the automation and computers we have know, labor is cheap part of manufacturing anymore. The jobs banks were justified and remain justified, and if the people who planning and scheduling were looking ahead, these should have not been a problem.

We need to talk more about the outrageous pay of executives. Has anyone calculated the cost of executives per automobile? Why is it always calculating the cost of the rank and file?

We need greater shareholder rights, so that shareholders can have a say in issues like executive pay. With the Internet and computers there is no reason why we could not have regular votes by shareholders on major issues, like whether an exective gets a big bonus for driving the company into bankruptcy. Corporations are like governments, where the owners / voters have almost no power. In a way it is amazing how well that system works, but when we see failures, we inderstand the weak points of this.

I remember Lou Rukesyer PBS television show WALL STREET WEEK with LOUIS RUKEYSER. When Roger Smith retired Lou spoke about the big retirement package Smith received. Lou said that at the start of Smith’s time at GM, the company had 2/3 market share. At the end of Smith’s career, GW had 1/3 market share. Then Lou asked, “Imagine the retirement package Roger Smith would have gotten had he driven the company totally into the ground.” Mark John Hunter – Alpena

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By the way, I was so proud of myself for showing my support of GM by buying their stock when it dropped to $5/share. I feel a little silly about that now, but still want to salute the mighty GM which has done so much to improve my hometown.

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Kathi copied me on this.
I do have an observation.

Ir seems to me that whenever we feel that change is happening “so fast” or “too fast” – what we are really saying is that we are behind the curve – not the ones out front, creating the change or the future.

As a culture this a largely due to our nation’s having down-graded the areas of education and teaching. How can we be world leaders when we know so little about the rest of the world?

This “dumbing down of America” began about 30 years ago – perhaps longer. The results are a “momentary”, pop-oriented culture that lacks depth and therefore imagination. Short term greed has won out over long term vision.

A sad assessment considering the immense potential of this country which is basically young at heart and hard working.

A national commitment can change that around-but we have probably lost several generations.

Best-

David Winkler

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