The Washington Post editorial board is not amused by government moves to bail out the U. S. automobile industry:
The downfall of the American auto industry is indeed a tragedy. But the automakers and the United Auto Workers have only themselves to blame for much of it. For years, they pursued protectionism against foreign competitors rather than tackle them head-on. The automakers say that they need $25 billion from Congress to offset the additional costs of tough new fuel-efficiency standards. Perhaps they wouldn’t be in that situation if they had accepted such standards a long time ago and retooled to meet them, rather than persisting in the more familiar, and profitable, business of making gas guzzlers.
In my real life I have dealt with the U. S. automobile industry on nearly a daily basis over the period of the last 25 years and I won’t be surprised if the decline of the Detroit automakers hits me straight in the pocketbook. During that period I have seen nearly a 50% decline in the number of people on the payroll of the member of the Big Three with which I am most familiar. During that period I’ve also seen the company’s management at first hand. IMO it’s abysmal.
The cartoon character above is Al Capp’s General Bullmoose from his great comic strip, “L’il Abner”. The character is a lampoon of former General Motors CEO Charles Wilson’s comment that “What’s good for General Motors is good for the country”. That might have been true once but that was then and this is now. Neither today’s automobile industry nor its managers nor its workers are what they once were.
My advice to the U. S. automobile industry is the same as I gave to city government not long ago: when they’re looking for places to cut they should start at the top. I can think of no more dramatic example of moral hazard than the case of bad management continually being rewarded. I have no hope whatever that my advice will be taken to heart.
Yeah, I agree Dave. The problems with Detroit parallel nicely with last Friday’s NPR Science Friday show on innovation.
BTW, I have friends and family in the automotive and steel industries and their basic criticism is that management is still running these companies using the same industrial management models they always have.
For hundred year old companies “always” is a long time. If you mean that management is still behaving much as it did 30 years ago, I agree. If you mean that management is behaving much as it did 90 years ago, I disagree. That was the period during which U. S. automakers created the modern industrial corporation. The level of creativity and the pace of organization and business process innovation was ferocious.
30 years ago certainly – no one I know in the industry has been working longer than that. Granted, in some ares this is changing, but in many areas it is not. Last night I was talking about this with a metallurgist friend who used to work for GM and now does consulting work for them. She has long been frustrated with the firm’s tendency toward “traditional” approaches (for lack of a better term) and thinks the management needs a thorough purge.
I wanted to buy a hybrid car. I gladly would have bought an American one. There were none. I bought a Prius.
I’m not a money-smart guy. Not a businessman. But when even I could see in the 1990s that electric-hybrid cars, not SUVs, are going to be what the public needs in the future, and the heads of the motor companies can’t, something’s wrong with them.
“What’s good for General Motors is good for America” is true only as long as the converse also is true: What’s good for America is good for General Motors. As corporations have become transnational entities, beholden to no one but stockholders, that statement can’t be true any longer.