GM Inside News Forum banner

1 - 6 of 6 Posts

·
Premium Member
Joined
·
14,963 Posts
Discussion Starter · #1 ·
THE 2004 FORTUNE 500
GM Gets Its Act Together. Finally.
How America's No. 1 car company changed its ways and started looking like ... Toyota.
By Alex Taylor III


The incident is forever seared in Jack Smith's memory. When the former General Motors CEO was still a fast-rising executive in the early 1980s, he visited Japan to study Toyota's stamping and assembly operations—something nobody at GM, amazingly, had done before. After collecting the data, Smith was astonished to discover that GM needed more than twice as many people as Toyota to build the same number of cars. But when he made his report to GM's executive committee, the council of elders that ran the company, he was met with utter disbelief. They dismissed his findings. Recalls Smith: "Never in my life have I been so quickly and unceremoniously blown out of the water."

GM was in denial. In fact, GM was so far in denial that nobody had bothered to look for a simple explanation: GM was organized in a completely different way from Toyota—as well as from Ford, Volkswagen, and every other automaker. That was a big reason GM performed so poorly. In the early 20th century GM had been assembled from independent automakers—Chevrolet, Oakland (later Pontiac), Oldsmobile, Buick, and Cadillac—all of which did things differently and, 60 years later, were still competing ferociously with one another. Only a gigantic bureaucracy kept this unruly confederation from destroying itself. Toyota started out in 1947 building cars with a single brand in one factory. As it got bigger, it just grew out from the center. Headquarters kept making all the decisions, and everybody did things the same way.

So while Toyota was unified and centralized, GM was diffuse and decentralized. GM might market eight midsized sedans—all with different names and different parts—in half a dozen markets around the world; Toyota usually marketed only one or two. Even if nobody else did, Smith realized that GM's decentralized structure was fundamentally flawed. So when the board of directors installed him as CEO in 1992, he set out to change the organization. "I had the opportunity to really structure the business in the way I thought it should run," Smith recalls in a telephone interview with FORTUNE from his winter home in Naples, Fla. "Frankly, at the time we weren't like any other auto company in the world."

Smith and his successor, Rick Wagoner, spent the next decade making over GM in the image of its formidable Japanese competitor. If it were a TV show, you'd call it Toyota Eye for the GM Guys. Smith and Wagoner pushed, pulled, pleaded, and sometimes shoved until they reshaped their unwieldy organization into a single company that was able, in Smith's words, to "run common and lean." Today the engineer who specifies the design of a wheel cover at GM's operation in Shanghai uses the same computer language as his colleagues in Germany or Michigan, sources the piece through the same global purchasing organization, and sees it installed at a factory that follows the same GM system in use on five continents.
This is a great article on GM and how its coming back. I really sugest that everyone reads this. It talks about the Sloan latter, and the failed reorginization of GM in 84. There is a nice paragraph on Ron Zarella and how no one liked him from the get-go. I got this off my aol account, so if you cant read it Ill post up the whole thing.
http://www.fortune.com/fortune/subs/articl...01498-1,00.html
 

·
Premium Member
Joined
·
14,692 Posts
GM was in denial. In fact, GM was so far in denial that nobody had bothered to look for a simple explanation: GM was organized in a completely different way from Toyota?as well as from Ford, Volkswagen, and every other automaker. That was a big reason GM performed so poorly. In the early 20th century GM had been assembled from independent automakers?Chevrolet, Oakland (later Pontiac), Oldsmobile, Buick, and Cadillac?all of which did things differently and, 60 years later, were still competing ferociously with one another. Only a gigantic bureaucracy kept this unruly confederation from destroying itself. Toyota started out in 1947 building cars with a single brand in one factory. As it got bigger, it just grew out from the center. Headquarters kept making all the decisions, and everybody did things the same way.
I wonder how GM Daewoo, Saab and Holden rate - are they in line with the rest of GM, or an "unruly confederation"?
 

·
Registered
Joined
·
776 Posts
Personally I'm not so sure the world should be so homogenized. I'm too young to have had the chance to buy a Pontiac 400 and that makes me sad. Corporations are all struggling to make one product for all their customers, and I question the long-term viability of that plan. Many people my age are turned off by Toyota for just that reason, their cars are tuned to be so inoffensive and mainstream they are hopelessly boring.

Cars were more fun when the GM companies were trying to oudo each other. They didn't have to make so many compromises because if a customer didn't like the 396 in the Camaro they could get the 400 RA IV from Pontiac if it worked better for them. Or they could go get a 4-4-2 from Olds if they wanted a more posh muscle-car. Essentially, people had a lot more chance to like something from GM, and they felt the car 'fit them' better.

Now we have two V8's. A Chevy 350 in 3 or 4 displacements and a 4.6L from Caddy. Great engines, sure, but if I don't like them and I want a V8 I'm not buying a GM.
 

·
Premium Member
Joined
·
14,963 Posts
Discussion Starter · #5 ·
Originally posted by banzai79@Mar 26 2004, 07:51 AM
Personally I'm not so sure the world should be so homogenized. I'm too young to have had the chance to buy a Pontiac 400 and that makes me sad. Corporations are all struggling to make one product for all their customers, and I question the long-term viability of that plan. Many people my age are turned off by Toyota for just that reason, their cars are tuned to be so inoffensive and mainstream they are hopelessly boring.

Cars were more fun when the GM companies were trying to oudo each other. They didn't have to make so many compromises because if a customer didn't like the 396 in the Camaro they could get the 400 RA IV from Pontiac if it worked better for them. Or they could go get a 4-4-2 from Olds if they wanted a more posh muscle-car. Essentially, people had a lot more chance to like something from GM, and they felt the car 'fit them' better.

Now we have two V8's. A Chevy 350 in 3 or 4 displacements and a 4.6L from Caddy. Great engines, sure, but if I don't like them and I want a V8 I'm not buying a GM.
I dont think we have to worry about style honestly. Look at the GM cars and then look at the cookie cutters from asia. Cars that dont look like another are few and far between. With the SSR, C6, Solstice, Velite, Curve, Nomad, Sixteen, and even there pic ups, we can see a much more exciting and agressive design.
 

·
Registered
Joined
·
3,389 Posts
Unfortunetly that old auto world is dead. There is simply to much compitition now and it would be far to expensive to build cars that way. The best you can hope for now is inovative brand design on a shared platform.
 
1 - 6 of 6 Posts
Top