GM and Faltering Leadership

On NPR last night, I was listening to the latest report on the negotiations between GM and the UAW. On the surface, leadership of the two organizations were claiming success, but it was interesting to hear the interviews with UAW members. One said that over and over managers had asked them how to make things work more efficiently in the plants and what they needed to do better - and management never took any of the suggestions. Another member was so very angry at having to give in to the degree they did as upper management continued to be paid millions, even as the company continued to falter. And although it's common to try and lay the blame for GM's problems at the feet of the union members, I don't buy it for a second. Yes, there may be some problems, but labor prices are only that high per car when a company loses as much market share as GM has over the years for not delivering what customers really wanted.

If you've ever had people working for you - or ever had a family or been involved in a volunteer organization - it's hard to ask people to sacrifice. The only way to gain the moral authority to do so is to to make sacrifices yourself. I think GM management has totally blown the chance of being leaders. You can't keep asking for concessions while protecting your own interests. Why not drop all management bonuses until the company can sufficiently turn around? Why don't the CEO and CFO take pay cuts? If you're already worth millions because of compensation in previous years, you don't have as much pressure. (And here's an interesting look Forbes took at Wagoner's compensation in 2005.) If Wagoner at least had done taken a cut, he would have gained enormous credibility among the very people who have to make work any plan he creates. Instead, GM, as has happened in so many other companies and industries, decided to stick with business as usual - as for concessions from employees and not match it to recognize that everyone is in the same boat. And so, I wouldn't expect anything other than business as usual in all other aspects.

US Auto Makers Shoot Themselves in the Gas Tank

With market share slipping and the future generally looking drab, you'd think that US auto makers would decide that leading in what they would offer to consumers would be smart business. But New York Times reporting suggests that the CEOs of Chrysler, GM, and Ford - can't really call them the Big Three anymore - are pushing on Congress to undercut mandatory increases in fuel mileage:

The executives argued that the bill’s proposal to increase mileage requirements for cars and light trucks would be impossible to meet and would gravely damage the automobile industry.

It would increase the average mileage requirement for passenger cars to 35 miles a gallon by 2020, up from 27.5 miles a gallon now, and would apply to light trucks and sport utility vehicles as well.

So these business "leaders" are saying that they can't increase average gas mileage by 8 mpg in 13 years? Time and again I've heard CEOs bemoan how too many employees are negative and stuck in old thinking - not being positive. But you've got three engineering giants, even if not the three biggest, that are just giving up. To me it sounds like another case of corporate whining of how business is just too hard. Too bad. Think the Japanese and Koreans won't be at those numbers, or lower, within the same time frame? It's as though these executives are intent on commercial suicide. It doesn't matter whether the government is mandating this. Wake up, people! When gas prices keep hovering above $3/gallon in this country, it's the market that will be making the demands. But God forbid that these dinosaurs make a strong fight for their existence. Clearly the big problem is not in labor costs, but in trying to do business without imagination, daring, and resolve. Anyway, how much courage does it take to run out of a burning building?