Book says GM had clueless 'culture of losing'

Book says GM had clueless 'culture of losing' David Barkholz Automotive News -- September 20, 2010 - 12:01 am ET
Steven Rattner, former chief of the Obama auto task force, said General
Motors' corporate culture was dysfunctional when he arrived last year.
"I was completely unprepared for what I saw once I got inside of General Motors," Rattner, 58, said in an interview with Automotive News last week.
"I certainly had read about GM. I assumed there was some level of journalistic hype. And, in fact, it was worse than anything I had imagined."
In Rattner's new book, Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry, Obama auto task force member Harry Wilson summed up GM simply: "A culture of losing."
The good news is that now, after nearly a year under outsider CEOs Ed Whitacre and Dan Akerson, GM is making significant progress, Rattner said.
Whitacre "sent the message that this is no longer a bureaucratic battleship churning its way through the waters. It has to become more lean and mean."
Rattner said Akerson, who took over as CEO on Sept. 1, "is completely in Whitacre's mold and mentality."
In his book Rattner, a 26-year veteran of Wall Street, relates example after example of an insular, bureaucratic organization that avoided decisions while the company deteriorated.
For instance, Rattner said former CEO Rick Wagoner in 2008 refused to prepare for bankruptcy even though GM was desperately short of cash. The delays ended up costing taxpayers "a lot of money" when GM did file for bankruptcy, Rattner said.
Rattner, who led the task force from February 2009 until he resigned that July, is especially critical of GM's finance department.
"It was stunning to walk in there and realize that the company needed massively more cash to operate than the size of company would suggest because they didn't know where the cash was," Rattner said last week. "That they couldn't tell us on any given day within $500 million how much cash the company had. That's an amazing thing."
Even today, 14 months out of bankruptcy, GM lists financial reporting as a risk factor in its recent registration for an initial public offering. Rattner said last week that it may take another year or so to work out all those bugs.
He said insularity, in which GM lifers dominated management ranks, combined with arrogance to contribute to GM's toxic culture.
"Until this latest round of changes, GM had an incredibly small number of people who had not been there their entire careers," Rattner said. "It was a culture of meeting after meeting and process."
In his book, Rattner writes that then-CEO Fritz Henderson lost points with the board for being "doggedly loyal to GM people and ways. Ray Young was still CFO. [Fritz's] decision to bring back Bob Lutz left many on the board scratching their heads. And when Kay Barclay, the head of human resources, finally resigned, Fritz proposed a GM manufacturing executive to take her post."
Rattner said last week that GM's culture was outwardly friendly and collegial -- "so much that nobody ever wanted to break the glass and say this is wrong."
But now, after nearly a year under Whitacre and Akerson, GM's culture is changing, Rattner said. He helped recruit both Whitacre and Akerson to the post-bankruptcy board.
"Whitacre changed a lot of people," Rattner said. "He changed some of the jobs twice when he wasn't happy with whom he had. He promoted and empowered some insiders who brought in outsiders."
Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100920/OEM02/309209964/1423
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
C. E. White wrote:

http://www.autonews.com/apps/pbcs.dll/article?AID=/20100920/OEM02/309209964/1423

For a lot of people's sakes the Cruze and Volt had better be fine than gold. If they either flop, or go over poorly, that is the death of GM as a corporate entity. People would storm Washington with clubs, pitch forks and torches in the Feds wanted *another* bailout (Frankenstein's Castle scenario).
--
Service Guarantees Citizenship

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Many years ago I worked for a subsidiary of a huge conglomerate. Every day a single teletype was sent to the head office with the cash balance for the day. I cannot imagine not being able to track $500 million.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Have they heard about computers?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote

Yes, they use the same one that works the Climate Control in my Buick. OK, now I understand.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

In theory one computer should be able to handle all money transactions for all the companies and all people in USA.
That is in theory of course.
Same goes for computing taxes etc.
Handling al banking should be easy.
You put in money and you compute interest.
People get loans and there is some computations on interest.
Everything about money should be easy just moving it around and do a little bit of computations.
In theory you should not need any people in the equation at all.
So why do we have hundreds or thousands of people involved and noone seems to know anything?
What are all these people paid for doing?
Basically in all money systems there are all kinds of rules and excemptions, loopholes and small print meant to sell snake medicine that is harmless at best.
In theory the bigger the company the more money they do have to buy and create bigger and better systems to move money around.
In theory that is.
If you have a good computer system you should not need to have a crystal ball to tell you about what happened in the past.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote

Wonder how much the federal govt could tell us within 5billion how much cash they have on hand. I doubt it. With transactions happening across the 24 hour time zones and different reporting times I doubt if any world wide corp would know at any minute how much actual cash they had. if I remember during the bankrupcy GM said they needed 3billion a day in cash just to operate the business, not knowing where 500 million was at any given time would probably be excessive it wasn't far off
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

That is the same kind of mismanagement in govt itself as in govt motr It is fully possible for a computer to give exact number for how things are instantaneously at any time if it were fed the right info.
Problem is the computer systems are not working together and do not talk the same language.
It is like one s talking chinese, one spanish, third german where one does not speaks the others language.
A people involved have different goals of hiding information from each other and nobody really wants anyone else to know how things are.
If you know there are no money left and you want to take money out you can if the system has not found out yet.
We saw gm running on fumes for many years because even if there was no gas in the tank they could borrow their asses off until bankruptsy.
The systems have not improved so the company is still worthless.
That the $ are also more or less worthless in another story but fairly similar.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
On 9/21/2010 4:21 AM, Bjorn wrote:

I know Nissan had one like that 15 years ago and presume they still do.
They knew how many they sold each and every day, total history even if you traveled and moved. They even knew without opening the hood which plant made the motor 4 years later. If one dealership sold one, another even could see the inventory drop. Dealers even had the ability to check what was coming, when and where it was and always accurate.
And I bet they spent a lot less on the technology than GM did.
--
Obama, bringing the ghetto to middle class America.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
The computers were too busy building their cars. ;)
wrote

Have they heard about computers?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote

One thought to consider - the guy saying all the negative things was a Goverment expert. It is not likely that he would come out and say GM was a wll run companiy that jsut hit a rough patch. This might imply that the Government was wrong when they nationalized GM. You always need to consider the motivations of th person writing "tell all" articles.
Do you suppose the US Government has any idea of where the cash to operate the Government is located? I don't doubt that GM was (and is) burecratic and inefficient. But I also don't doubt that the US Government is even more inefficient and burecratic. This article was definitely a case of the pot calling the kettle black.
Years ago I remember reading about Ford Motor Company Accounting in 1945/46. They didn't actually total up receipts to determine daily cash flow - they bundled up the reciepts, weighed them and then applies a factor to come up with an estimate. Seems crazy...but... before computers it might not be as crazy as it now seems. Assuming decent statistics went into figuring out the factor, it might actually have been a workable way of coming up quickly with a daily estimate of cash flow.
Ed
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

That the government is chaotic is a given.
That one of the worlds biggest company was in a disarray is somewhat of a surprise or maybe not.
It did get bankrupt and a lot of people had predicted it for years.
What this tells us that being big and earning a lot of money does not equal being well managed and it can lead to failure.
The government can solve its problems by printing more money but eventually the value of the money created with nothing backing it means the price of everything will go up and up.
GM ricing the prices eventually priced it out of peoples pockets and interest.
How much are you willing to pay for a box on wheels?
If you can get one for $5.000 and another for $40.000 the latter one needs to be a hell of a lot better or?
If you pay something like 8 or 10 times much for a car you could also buy 8 or 10 cars.
Buying an expensive car is really silly if all you want is get from A to B in relative comfort.
I can not understand why a car needs to cost tens of thousands of dollars.
The tato nano selling at $2.500 is going to set a hell of a pressure on cars like the Volt.
It will be interesting what price GM will put on the Volt minus the gasoline engine.
First they have to make the Volt and then remove the engine so it will probably cost $50.000 which for the geniuses at GM makes sense even if for the rest of us it does not obviously.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Perhaps, but GM is still the number one selling brand, year to date, in the US. ;)
wrote

That the government is chaotic is a given.
That one of the worlds biggest company was in a disarray is somewhat of a surprise or maybe not.
It did get bankrupt and a lot of people had predicted it for years.
What this tells us that being big and earning a lot of money does not equal being well managed and it can lead to failure.
The government can solve its problems by printing more money but eventually the value of the money created with nothing backing it means the price of everything will go up and up.
GM ricing the prices eventually priced it out of peoples pockets and interest.
How much are you willing to pay for a box on wheels?
If you can get one for $5.000 and another for $40.000 the latter one needs to be a hell of a lot better or?
If you pay something like 8 or 10 times much for a car you could also buy 8 or 10 cars.
Buying an expensive car is really silly if all you want is get from A to B in relative comfort.
I can not understand why a car needs to cost tens of thousands of dollars.
The tato nano selling at $2.500 is going to set a hell of a pressure on cars like the Volt.
It will be interesting what price GM will put on the Volt minus the gasoline engine.
First they have to make the Volt and then remove the engine so it will probably cost $50.000 which for the geniuses at GM makes sense even if for the rest of us it does not obviously.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

The new idea of cloud computing is obviously not so new.
Looks like GM has had all its computing covered in clouds for years.
I saw and interesting headline yesterday.
"BP well is dead" or was it "BP is well dead"?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

"For instance, Rattner said former CEO Rick Wagoner in 2008 refused to prepare for bankruptcy even though GM was desperately short of cash. The delays ended up costing taxpayers "a lot of money" when GM did file for bankruptcy, Rattner said."
that's not news, we all knew that here back then- is this book for historians in the future ?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

The chinese are winning
On a rainy Tuesday in March 2009, U.S. military and intelligence officials gathered in a war room north of Washington to watch a simulated conflict flicker across a bank of video screens.
The struggle was pitting the U.S. against China. And China was winning hands down, writes Eric J. Weiner in The Shadow Market, a bleak survey of how flush authoritarian governments deploy financial means to achieve geopolitical ends.
The weapons were dollars, stocks and bonds, not bullets and bombs. The soldiers were Wall Street bankers, hedge-fund traders and economists. For two days, they explored what would happen if the world sank into economic warfare. The outcome was alarming.
There was no way for America to win, Weiner says.
Whenever the U.S. did something Beijing didnt like, China began dumping a fraction of its dollar-backed assets, driving down the currency, sowing economic chaos and prompting U.S. leaders to appease the Chinese. America didnt have as much leverage with its Asian banker as had been assumed -- a lesson reinforced this week when Chinese Premier Wen Jiabao rebuffed U.S. complaints that the yuan was undervalued.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Where did you get THAT information???
wrote:
On a rainy Tuesday in March 2009, U.S. military and intelligence officials gathered in a war room north of Washington to watch a simulated conflict flicker across a bank of video screens.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Rattner, I believe, is about to be pounced on because of his dealings via Morris and Hevesi.
The prime focus of some of these relationships was to extract "favors" of hundreds of millions of dollars from investment companies for his assistance in opening the New York pension fund investments to his favored few.
"Pay to play" is a phrase that has been applied to this.
How deeply is Rattner involved? Time and testimony will tell.
It is a complicated story, but one which most of us would find interesting and abhorrent.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Related Threads

    Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here. All logos and trade names are the property of their respective owners.