General Motor culture

Topics: General Motors, Automotive industry, Rick Wagoner Pages: 12 (3194 words) Published: February 11, 2015

One former GM employee said the company's management’ CULTURE needs an almost immediate overhaul if GM is to start producing the vehicles it needs to revive sales and return to profitability. This statement indicates there are some things that are fundamentally wrong with GM. To start with, GM faced the consequences for what GOP warned every one about for the last 2 years in 2009 that how our auto industry consumes more oil if we don’t switch from gas guzzlers to electric cars, hybrids, and fuel cells, and the compact cars, the key player in the carbon-conscious automobile market of the next ten years, especially one powered by diesel engine. Also, GM has lost its ability to develop small cars with the sale of its Opel subsidiary to Canadian auto parts maker, Magna. It was an erroneous move by the GM leadership due to lack of foresight on global competition. And the second biggest problem was the UNION. The unions have too much to say in GM’s work labor on how they get paid for the rest of their kids’ lives. The communist style workers manifesto called a collective bargaining agreement lead to huge debts for GM filing for bankruptcy. It is another failure of leadership all around starting with Wagoner and his board of directors to the enablers in congress led by a Michigan delegation that looked the other way for years, to the Bush administration and congressional democrats, who proved to be better at panicking and throwing our money at the mess than getting tough.

The auto industry leader, GM, unbothered by competition and looming threats, began to coast on its former glory, however, and bypass such areas as consumer preferences and industry innovation. Although there are many factors that contributed to the company’s long, slow bleed, the three fundamental issues are management’s consistent failure to do the very things that made the business so successful initially.

Here is another story on downside of Culture change. A critical aspect of GM’s turnaround was breaking a culture that has been held up for decades as an example of insularity, stagnation and inefficiency [for more read Ron Kleinbaum's classic four-part editorial on the subject here], a task that various recent CEOs have gone about differently. Fritz Henderson had a “change agent” vanguard approach, while Ed Whitacre took more of a “set tough goals and fire regularly” tack towards GM’s culture wars. But regardless of differences in tactics, everyone’s agreed that GM’s culture needed to be seriously retooled if the company’s huge advantages after a government-backed bankruptcy-bailout weren’t going to be pissed away, and as a result a lot of GM’s “lifers” found themselves on the outside looking in. And rather than slinking away, one of those jilted lifers is suing GM for age discrimination. The Freep reports

[Daniel Plouffe's] lawsuit says that when GM emerged from bankruptcy in 2009, it embarked on a campaign to replace older executives with those under 50 by encouraging older executives to retire. Many of those who didn’t retire were demoted out of the executive ranks with no chance of being considered for future promotions, regardless of their qualifications. Plouffe, who has worked for GM since 1971, said he was demoted to a level 9 position, resulting in a 20%-25% pay cut, even though he assumed the responsibilities of three other executives who left. He said a succession of GM officials told him that he was being demoted because the company wants to promote younger people — those under 50 — even though his last performance evaluation said he far exceeds expectations. Plouffe is seeking class action certification, but legal experts say he’ll “face a daunting task.” After all, to defend itself GM simply needs to prove that there were...
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