GM rant O.T.

Sure was. Right on the mark too!

JT

John Poulos wrote:

Not long after the time of your story, perhaps about 1971, I was a new member of a large IBM group providing sales and service support to Ford headquarters in Dearborn MI. One of our top salesmen, a very personable, astute, highly-educated, and self-motivated fellow, was part of a group that visited Japan to attend a quality conference, and he visited many Japanese companies while on an extended stay in Japan.

He came back absolutely alarmed, and an avid evangelist on the need for US auto companies to get their butts in gear. He put together a very enlightening presentation, which he gave to auto executives at every opportunity, on exactly how Japan was taking over the world markets in cameras, watches, TV's, video, machine tools, etc, etc... one by one. He warned them that Japan would soon focus on the auto industry and that they would succeed there, too, unless we made massive changes, and he outlined the needed changes.

He soon became very discouraged, because although the execs listened to him, and nodded their heads, and thanked him for his zeal, they did not seem moved to action. They also were slow to recognize the potential of computers, aside from counting beans and tracking inventories. He soon became totally discouraged, felt there was no future for the auto industry, left IBM and started his own company to pursue his business interests in the high tech and financial fields (as Ross Perot had done some years earlier).

Here, management and labor were fierce adversaries, not the innovative partners they were in Japan. Auto industry execs (bean counters like Roger Smith), were far more concerned with averting the next strike, collecting their quarterly bonus, and the size of their golden parachute, than with the long-term health and prospects of their companies or the quality, appeal, or innovation of their products. Unions were only concerned about the size of their paychecks, next month's dues totals, preventing labor-displacing productivity advances, and how many more perks, union stewards, and labor rules they could force into the next labor contract. Government was only interested in increasing corporate taxes, getting the union vote, and passing more OSHA safety laws, not in assisting industries to compete in the world market.

They were all amply warned. Their > That guy is dead on! I remember only so well when as an AMC dealer in 1969

Need to avoid my usual bean-counter rant here, but: you could make the case that "we are all bean counters now." We are accustomed to thinking of a company and its product line as something that strives to carry on through the generations (now where would Stude guys get an idea like that?). Automation, labor strife, and infotech aside, the REALLY big thing that began to change in the 50's, and is now a fact of life, is that next quarter's trend, this year's dividend, and the size of the golden parachutes ARE the reality of a corporation's existence--not the family name, its sacred history and traditions, or its hopes for the future.

When your nest egg , or your retirement fund, invests in the rise and fall of company stocks, their bottom lines becomes just that, no more, to you and to your broker/administrator. Firms no longer sell out, abandon a product, or close up shop only due to dire emergency. Sometimes they "maximize investor value" by just letting it die on the vine, riding it down, and knackering the corpse. I won't tell anyone to get used to it, because I never will. I find it horrifying, unmanly and un-American, and just like most of you, I'm probably profiting from it right now on some line of my 'portfolio.' And like so many other things in the industry, that was a Studebaker first.

Keep in mind, England got hit a LOT harder than the U.S. when it came to small sedans. This somewhat ironic, when some of the first 'modern' Datsuns were Austin Cambridges built under licence in the

1950's. The auto industry in Coventry is all but DEAD now, other than assembly plants for German and Japanese, and U.S owned car makers. Since MG-Rover crashed in 2005, there's no more home grown cars that are 100% true Brit. Even Volkswagen almost got complacent thinking the rear-engined, air-cooled Beetle could be a million seller forever, but the got the message real fast, and pulled a Rabbit out of the hat just in time. If GM and Ford are not careful, they could be another casualty like the article suggests now that the Japanese are producing luxury cars and full size trucks, besides millions of small cars that have proved themselves to be better built than what Detroit has been building. One would have thought the makers of 4-wheeled vehicles would have forseen that coming; especially after watching Honda almost instantly become the top selling motorcycle in North America by the mid-sixties.

Craig