Jim Dollinger's Plan for a Return to Greatness

[Buickman]

Originally Posted by MonaroSS

I have read Buickmans Return to Greatness previously and thought it had quite a bit of merit to it that GM would have been, and still would be, wise to examine carefully.

Yes I appreciate what Ming says about product, but I think that to understand how Return to Greatness and improved product could best co-exist you need to have a deeper understanding of the Japanese philosophy of 'Kaizen' which most westerners interpret as 'continuous improvement'. But westerners misunderstand it.

Buickman unwittingly uses a more Japanese Kaizen in his methodology than any GM exec would have understood, and it is where Ming doesn't quite get the value of Return to Greatness either.

Kaizen does not just mean 'continuous improvement' and especially not the way westerners interpret improvement. We in the west like obviously new things, so new that they indeed embody an element of transitory newness that is called 'fashion'. There is no room for 'fashion' in Japanese Kaizen because Kaizen in addition to continuous improvement involves another opposing element often overlooked and referred to as 'standardisation and elimination of waste'.

Most westerners overlook this as they simply think that it means that it is cheaper to horizontally standardise components in an automaker so that many different models use the same subsystems or component sets and that those components are less economically wasted when delivered just-in-time, which is a side product of Kaizen philosophy. But this misses the point altogether and misses why Toyota is so profitable.

The Kaizen element of 'standardization and elimination of waste' is not just horizontal integrated into the company across products but is vertically applied over time as well and is an opposing force to the other Kaizen element of 'continuous improvement'.

Like Yin and Yang, Kaizen is all about forces to continuously improve a product struggling with forces to resist changing the product over time. To improve the product makes it more appealing and suitable to the market place, but to keep the product unchanged makes it cheaper and cheaper to produce as fixed costs are amortised over time.

So Buickman needs to struggle with Ming and the net result should be a Toyota style profitability.

As an aside it has been interesting to note Toyota being criticized for reducing their production capability for batteries for the Prius and also for letting the Corolla languish without recent updates. But if Toyota foresaw the current market situation happening then their principles of Kaizen would require them to artificially provide an excuse for not making more Prius' which they do not make good profit on which under Kaizen is somewhat wasteful.

It would also mean they should hold off on spending money on Corolla. Why? Because a car you make unchanged for six years nearly doubles the profit on fixed costs of a car that you amortise over three years. Even if demand is lower for Corolla than it could be because it is a little outdated, better to sell a well amortised version in a market clamouring for smaller cars than to sell more of a car that is needing to first pay off it’s fixed development costs.

And you will sell more high profit margin older design Corollas if you make a much more appealing small profit vehicle like Prius conveniently not as available so as to compete with a surge in small car sales that you can direct to the highly profitable Corolla. Toyota is well served by their Kaizen philosophy, even if it does not produce the best cars in the world, but it makes for the most profitable cars in the world.

as a student of the I Ching and all things Chinese, I understand your reference to Yin Yang and recognize the duality of nature and periodicity. your concept of Ming and I mutually bringing benefit to GM is quite astute.

Hen Hao Grasshopper.

Zai Jian

[Buickman]

Originally Posted by TimR

Buickman, that is a very impressive list of great ideas! As I was reading it I realized many of the things on there have happened to me as a customer over the years with exactly the results you mentioned.

It will be interesting to see what the future holds. Hopefully some of these ideas are used!

thx for the reply, recognition, and sincere good wishes.

[paul8488]

I also understand what Ming is saying about the plan... but if I understand properly, Buickman, you are suggesting to GM how to better sell cars, not make them. The better the cars they easier they will be to sell, but your focus is on the sales end of it. If your plan could increase sales with the current lineup it could certainly do it with an improved lineup. The fact that your plan doesn't include a huge dose of cash theoretically means that any extra cash floating around could go into making better cars.

[vcs2600]

Buickman provides valuable insight into GM's sales organization, which is one of the most critical parts of a company but difficult for an "outsider" to grasp.

Most posters here are focused on product, marketing, branding, that sort of thing, but not the actual process of getting the car into the customer's hands. However, the two issues are not entirely unrelated. For example, GM's brand structure directly translates into "sales channels" which generally determine what sort of product is carried by a dealership and how profitable it is. A poor brand/channel structure (which IMO GM has) indirectly leads to a poor sales/dealership experience.

Also, a minor nitpick:

STEP FOURTEEN: Executive Cars.

Is this really a big issue outside of the Detroit metro area? While I can understand that it might be a thorn in BM's side, it's not really a core competitiveness issue.

[tholland]

Originally Posted by Buickman

IMO GM can maintain and grow all our divisions with the proper focus.

I agree. I think that the brands where much stronger when they had a certain amount of autonomy. I think the only GM vehicle with absolute focus is Corvette.

[eaton53]

You are clearly well informed on the art of selling cars. And I think most, probably all of your points are worth implementing. The GM card I can vouch for being broken, and for me it's because of the puny redemption limits on smaller, less profit-packed, fuel efficient cars.

One of the problems with the GM Card is they're always messing with the points. You want to buy something but don't know if you're going to have the allowable amount or going to leave points on the table.

I'm a planner and don't like that, so if I'm using the GM Card I never go over $1K in card cash. They'll give you that on anything. Then I switch to Driver's Edge (which you can use on anything) and pile cash on that.

[unkillsam]

Originally Posted by Buickman

I agree that superior product makes for a self seller, like the original Buick Valve in Head engine. Billy always liked a product that sold itself, whether a fine cigar, ellliptical spring carriage, Buick engine, or Frigidaire. we must remember this whole thing starts when somebody sells something. now I don't claim to possess any engineering skills but I am sure our people do, as do our stylists. what I do know is how to treat people, all the people, and create a team atmosphere in which we all pull together to make this happen, built upon trust.

as to style, let's keep in mind that the American public buys cars kind of like they vote for elected officials. they weigh the issues very carefully, then go in and vote for the best looking candidate. I mentioned this years ago on Autoline Detroit with John McElroy and in fact showed Roger Adams in the styling studio how to make an upcoming model more toothy in front and of substance in the fascia. he didn't listen and ironically Chrysler shortly thereafter came out with the 300. it wowed the country until the mechanics/quality came to light. we need to start with great appearance in and out and back it up with consistent reliability.

an interesting email came in to GeneralWatch the other day which I'd like to share regarding the "stuff" we have on the street today...

"Everybody seems determined to get a 6+speed automatic, but they all run the same rpm down the highway as the existing 4-speed automatics in OD. How's that possible? All of the top OD ratios are in the .65-.70 range, as they've always been. Hence, no fuel economy advantage. Only advantage is in performance with the deeper low gear.

"I rented a Malibu LTZ a few months ago, with the 3.6L High-Feature V-6 and the 6-speed automatic. Unfortunately, unless you get the direct injection 3.6L V-6, it gets worse fuel economy than the Buick 3800 it replaces (generally). Nor does it match the Chrysler 3.5L V-6 in economy, either, with similar power ratings (and a whole lot LESS high-tech stuff in the motor!).

"Incognito fuel economy champions are the Impala SS V-8s. I've rented a few of them that, if you run them at posted speed limits with the cruise (approx 65mph), they'll get 30-31mpg on the trip computer's Average Fuel Economy readings. Similar Pontiac Grand Prix GXPs don't quite do the same, though. With the V-8, it'll stay in 4cyl mode longer than the 3.9L V-6 will stay in 3cyl mode when you head up hills or over Interstate overpasses. Plus the 3.5L VVT V-6 in the normal Impalas and the Buick 3800 V-6.

"In reality, GM has had more high fuel economy vehicles over the past 10 years than any other car maker--period. Cars that'll get at least 28mpg on the highway without giving up size or comfort, either. Unfortunately, they haven't done a good enough job of communicating that fact."

point in fact...we've got great product which is competitive, trouble is that our message and potential brand reputation gets left behind by the worst marketing in the industry.

we can easily fix this, reduce marketing costs substantially by letting Associated Press/Reuters do our merchandising for us through news releases, increase sales, market share, restore health to the dealer body, strengthen the supplier base, encourage employees/retirees to once again actually believe in GM, and earn a substantial return for our shareholders (after of course we repair the financial mess we are in and drastically reduce the debt burden).

sounds good?

oh btw, I certainly don't have all the answers. in fact much of RTG has come from listening to "car guys" around the US for the last couple decades (that includes this forum particularly, I'm not here only to rant against Rick, but to learn). there's lots more to be discovered, many more ideas out there. if anything, I'll take credit for summarizing/organizing and for contributing my passion for this company.

Thanks for keeping the tone civil Jim. I will try and do the same

Point #1 A properly set up 6-speed automatic transmission shifts smoother then a comparable 4-speed automatic transmission because there is less of an RPM drop between shifts. The fuel-economy problem with the Malibu seems to stem from the engine itself, not the transmission. It is also confusing because the Enclave get's great fuel economy for it's size and it has a similar engine and transmission. The point is, 6-speed transmissions are all about marketing, which you of all people should understand. GM should have innovated instead of followed the imports. If GM came out with standard 6-speed transmissions on all it's cars 5 years ago when everyone else was just coming out with 5 speed transmissions, they would have retained market share. It's all about the image, and GM's image is low-tech. And more speeds equal high tech.

Point #2 Don't use the Impala SS as an example of a great GM vehicle. First off it is on a 25 year old platform that was obsolete 10 years ago. Inefficient packaging makes the Impala have less interior room then it's competitors, the Taurus and Accord. Secondly, the interior is really cheap. The Malibu, a car that is supposed to slot below it, has a much nicer interior. Thirdly, even while getting 28 mpg highway, the Impala SS still has the V8 stigma, something GM doesnt understand. V6 and 4 cylinder engines are now in vogue, you have to have them. If Toyota can make at 268 hp V6 get 30 mpg, then so can GM. Just because GM has a 200 hp V6 that get's 30 mpg does not mean that they are competitive.

Point #3 Your assesment that GM vehicles are close in terms of actual quality with the imports is correct. What troubles me is that you seem to not care about the small details. Even with the ancient platform and terrible name, the LaCrosse could easily have double the sales it currently does with.

A. A classy yet high-tech interior. Need's navigation, real wood in upper trim levels, and should share nothing with the Impala.

B. A HFV6 that is quiet-tuned and a 6-speed automatic transmission with the option of paddle-shift if the customer wants it.

C. Restyled rear end. Front is blah but ok, rear end is a joke.

[Buickman]

Originally Posted by paul8488

I also understand what Ming is saying about the plan... but if I understand properly, Buickman, you are suggesting to GM how to better sell cars, not make them. The better the cars they easier they will be to sell, but your focus is on the sales end of it. If your plan could increase sales with the current lineup it could certainly do it with an improved lineup. The fact that your plan doesn't include a huge dose of cash theoretically means that any extra cash floating around could go into making better cars.

exactly. more sales now equates to more time for improved product as well as the $ to fund such.

[Buickman]

Originally Posted by vcs2600

Buickman provides valuable insight into GM's sales organization, which is one of the most critical parts of a company but difficult for an "outsider" to grasp.

Most posters here are focused on product, marketing, branding, that sort of thing, but not the actual process of getting the car into the customer's hands. However, the two issues are not entirely unrelated. For example, GM's brand structure directly translates into "sales channels" which generally determine what sort of product is carried by a dealership and how profitable it is. A poor brand/channel structure (which IMO GM has) indirectly leads to a poor sales/dealership experience.

Also, a minor nitpick:


Is this really a big issue outside of the Detroit metro area? While I can understand that it might be a thorn in BM's side, it's not really a core competitiveness issue.

as our ranks dwindle it is of lessening importance. do agree with you tho that it's probably not worthy of public announcement. a simple internal memo would do the trick since the audience consists only of direct employees and retirees.

minor point as you say, but a good one. thx.

[Buickman]

Originally Posted by tholland

I agree. I think that the brands where much stronger when they had a certain amount of autonomy. I think the only GM vehicle with absolute focus is Corvette.

agree completely. of course what else would you expect from a guy who calls himself Buickman?

[Buickman]

Originally Posted by eaton53

One of the problems with the GM Card is they're always messing with the points. You want to buy something but don't know if you're going to have the allowable amount or going to leave points on the table.

I'm a planner and don't like that, so if I'm using the GM Card I never go over $1K in card cash. They'll give you that on anything. Then I switch to Driver's Edge (which you can use on anything) and pile cash on that.

they took one of the best programs GM ever had and completely screwed it up. perfect example of how out of touch executives negatively impact sales with their thoughtless, penny pinching, pencil pushing. really a sore subject for many, many people.

[Buickman]

Originally Posted by unkillsam

Thanks for keeping the tone civil Jim. I will try and do the same

Point #1 A properly set up 6-speed automatic transmission shifts smoother then a comparable 4-speed automatic transmission because there is less of an RPM drop between shifts. The fuel-economy problem with the Malibu seems to stem from the engine itself, not the transmission. It is also confusing because the Enclave get's great fuel economy for it's size and it has a similar engine and transmission. The point is, 6-speed transmissions are all about marketing, which you of all people should understand. GM should have innovated instead of followed the imports. If GM came out with standard 6-speed transmissions on all it's cars 5 years ago when everyone else was just coming out with 5 speed transmissions, they would have retained market share. It's all about the image, and GM's image is low-tech. And more speeds equal high tech.

Point #2 Don't use the Impala SS as an example of a great GM vehicle. First off it is on a 25 year old platform that was obsolete 10 years ago. Inefficient packaging makes the Impala have less interior room then it's competitors, the Taurus and Accord. Secondly, the interior is really cheap. The Malibu, a car that is supposed to slot below it, has a much nicer interior. Thirdly, even while getting 28 mpg highway, the Impala SS still has the V8 stigma, something GM doesnt understand. V6 and 4 cylinder engines are now in vogue, you have to have them. If Toyota can make at 268 hp V6 get 30 mpg, then so can GM. Just because GM has a 200 hp V6 that get's 30 mpg does not mean that they are competitive.

Point #3 Your assesment that GM vehicles are close in terms of actual quality with the imports is correct. What troubles me is that you seem to not care about the small details. Even with the ancient platform and terrible name, the LaCrosse could easily have double the sales it currently does with.

A. A classy yet high-tech interior. Need's navigation, real wood in upper trim levels, and should share nothing with the Impala.

B. A HFV6 that is quiet-tuned and a 6-speed automatic transmission with the option of paddle-shift if the customer wants it.

C. Restyled rear end. Front is blah but ok, rear end is a joke.

all valid points. although Onstar turn by turn Nav is std on Buicks and diminished the need for a screen that is difficult for many Buick customers. a nice option for some but not something I feel should be on every unit.

particularly agree with rear styling. Buicks traditionally have full width tail lights and whoever stripped them from LaCrosse and Lucerne made a big mistake IMO.

[sv7887]

Buickman,
This is solid stuff!!! I am just getting my start in the Auto industry from the Consulting side and it gives me a good insight in terms of what the competition is doing. Coupled with GM's improving product, RTG would bring some dynamite results.

Why GM doesn't implement your plan is beyond me. GM's management seems to be perpetually out of touch, a lot like Pan Am's was..(We all know what happened to Pan Am..) They seem to react rather than plan for things. Even when they do react, it's a muddled, confused response.

I think you get it in terms of understanding that axing divisions will NOT return GM to profitability. The Oldsmobile disaster seems to be forgotten by those who advocate cutting more divisions. GM won't regain lost market share by abandoned customers!!!

Hummer is a popular status symbol overseas. Why scrap it? They are cheap to build. Rich Russians and Europeans don't give a damn about the Greens or 10 MPG. Take a look in London and see the plethora of S Class Mercedes, high end exotics, Range Rovers and what not.

Look at the airline industry: NO airline has ever become profitable by aggressively shrinking their operation. The second Pan Am sold their Pacific route system was the day they put the final nail in the coffin. Sadly I see GM doing exactly what Pan Am did, firesale of assets, cutting back service, attacking the cost side of things and doing little to increase revenue.

I admit I used to be a supporter of Rick Wagoneer. I thought people were just giving him hell and that he needed more time...The fact that these guys got caught with their pants down on $138 oil is just beyond me. The writing on the wall in terms of oil has been there for quite a while. Wagoneer seems to be just another page in a story of inept GM leadership. How can such a great company keep bringing such inept managers into the fold?

At least Alan Mullally over at Ford has a strategy, it's bold, it might blow up in his face, but he isn't afraid to make the tough decisions..It's what made him a brilliant manager at Boeing. Fly the 777 and you'll see how great of an aircraft it is. Mullally was the GM of the 777 project, a project that single handedly brought Boeing back from being marginalized by Airbus.

Buickman, I share your sentiments over the fate of this great and once proud company. My late father used to drive Buicks, (85 Electra, and 89 Park Avenue) but like a lot of people here became disaffected with GM and went to Toyota and later Lexus...

Those Buicks have a lot of fond memories for me. '89 Park Avenue was just a great car, and I yearn for the opportunity to get back into a GM car. I've driven Lexuses, and currently have a Mercedes, but something is missing...

I see cars like the CTS, a car so well executed and it gives me hope. I hope the new LaCrosse (I hope they change that name) is another home run.

[Ming]

Originally Posted by Buickman

point in fact...we've got great product which is competitive, trouble is that our message and potential brand reputation gets left behind by the worst marketing in the industry.

I'm not here only to rant against Rick, but to learn). there's lots more to be discovered, many more ideas out there. if anything, I'll take credit for summarizing/organizing and for contributing my passion for this company.

That makes sense, then, Jim. Thanks for answering my points. In retrospect perhaps I was a bit hard on you. I was under the impression that you thought your plan could single-handedly turn around GM regardless of product. There have been examples of GM management that played down the importance of competitive product in favor of branding strategies and sales practices. The worst of them that I've read have been bordering on disrespectful of GM loyalists -- such as "Pontiac is the sporty-looking brand for the less educated buyer" (slap some ribbing and hoodscoops on a Chevy - or put a twin-port grille on an Equinox and call it a performance car). Not that your plan advocates this. But in the absence of product discussion I read that product was not as important, and read into it something that wasn't there.

Yes, GM has many of the products it needs to compete now, even if it still lags with a good line-up of attractive small cars such as an ultra-fuel efficient car like the old Metro (but with better sheetmetal) or a hybrid like the Prius that can sell for $22K. A $40K Volt will not be an alternative to the Prius when you could almost buy 2 Priuses for the price of one Volt! They'll need to get that price down as fast as they can if they are going to keep putting out ho-hum mild hybrids that don't pay for themselves and haven't impressed any of my co-workers who are Prius (or Civic Hybrid) bound.

And back to your plan - remember was was in Buick showrooms back in 2005 when you presented it...



I just figure in a plan with so many points, you would have had one point that calls out GM's managment for green-lighting sub-par products the 4 ugly rebadged minivans and says "never again - enough with the me-too rebadges". Heck, BPG dealers had both the Montana SV6 and the Terraza! Of course I wouldn't expect you to "dis" GM product all around sites like this (especially if you helped get someone into a Terraza ), but your plan was secret and for GM management's eyes only there for a while, if memory serves.

Ah, but I digress with more talk of PRODUCT. It's an obsession of mine. I apologize. I guess that perhaps you are equally obsessed with creative ways of marketing and selling GM product. And I can respect that.

With your explanation that your plan was only one angle of attack, I'm satisfied. Because there are a lot of good ideas in your plan.

Now if they'll only let me redeem the $3K or so I've accumulated on my GM card on something that isn't a bloated gas hog, costs over $30,000 or that gets fuel economy numbers higher than the teens.... Did I "earn" a right to use these points on the vehicle of my choice or not? The answer is why the GM card now sits unused in my wallet and I've changed to something else.

[member12]

I think it's mostly a good plan.

I hope that you keep pushing it quietly, people will eventually listen.


I want GM to come out with an actual schedule of every redesign, chassis used, update, etc.....and actually stick to that for more than 2 weeks at a time.