Tuesday, November 22, 2005

 

Bad policy rewards lousy company

Our hearts go out to the 30,000 soon-to-be-ex-GM employees. And, our anger goes to the piss-poor managers at GM and the politicians who continue to facilitate their mis-management of this once-proud brand. And an extra dose of pissivity goes to those idiots that blame the UAW and the IUE for the GM's demise.

We know the public is also sympathetic to these autoworkers, and that's why we realize that we won't have a consensus to agree with us on the following, but we've got to say that Gov. Taft's plan to help Ohio's auto industry by throwing nearly $400 million at the symptoms is nearly a total waste.

GM is losing market share for a number of reasons that no amount of state aid will cure:
  1. Quality of their products is fair to poor. The problem isn't the assembly line or the union. The problem is that GM (and Ford, despite Ford's bogus "Quality is #1" slogan) never embraced W. Edwards Deming's Total Quality Management principles and underlying philosophy the way the Asian manufacturers did.

    For example, read this TQM list and ask yourself, which of the following does GM deeply imbue into it's corporate culture?
    • Create constancy of purpose.
    • Adopt the new philosophy.
    • Cease dependence on inspection to achieve quality.
    • End the practice of awarding business on the basis of price tag.
    • Improve constantly.
    • Institute training on the job.
    • Institute leadership.
    • Drive out worker fear.
    • Break down barriers between departments.
    • Eliminate slogans, exhortations, and targets for the work force.
    • Eliminate work standards and substitute leadership.
    • Eliminate management by numbers and numerical goals and substitute leadership.
    • Remove barriers that rob the hourly worker of his right to joy of workmanship.
    • Remove barriers that rob people in management and in engineering of their right to joy of workmanship.
    • Institute a vigorous program of education and self-improvement.
    • Make transformation everybody's job.

  2. Health care costs for active workers and retirees became a burden because GM let them be a burden. Health care activists have urged - nay, begged - GM for nearly two decades to play a vocal and leading role in health care reform. Except for token comments and participation in larger "stakeholder" meetings, GM management failed to take the lead, instead opting for whatever short-term solution they could negotiate.

  3. Reliance on trucks was short sighted. Yes, U.S. automakers make good trucks, but that is only a part of the market and a risky part of the market at that, given the effects of gas hikes. By the way, it also helps that GM is also protected by a 25% tariff on imported trucks.

  4. No one want's to pay a premium for a mediocre (or worse) car. GM and Ford pay an average of about $3,500 per vehicle in incentives to buyers. Japanese manufacturers pay about $1,000 per vehicle. GM can complain all it wants about health care costs being about $1,500 per vehicle, but it's failure to build a car people want is an even greater burden by at least $2,000.

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