Here's What's Wrong with GM
There has been a lot of hand wringing lately about what is wrong at GM, and how to fix it. I don't know much about making cars, but I do know a bit about buying them. I also know a bit about running businesses, so here is one Peanut's advice to GM.
First of all, the executives running GM need to get real. By most business metrics, GM is a failure. It loses unbelievable amounts of money, its market share is in (and has been in) a downward spiral for years. Its bond rating is junk and its stock has been going nowhere but down in the last 5 years. Yet, for some reason, the five top execs at GM pay themselves $13.8 million per year. For what? They are managing a sinking ship. Why do they deserve so much pay? I wonder what the execs at Toyota pay themselves for running a successful company?
Next, the unions need to get real. According to UAW published figures, the average assembler makes about $53,000 per year and pays very little for health care costs. $53,000 per year? Now, for comparison, the average teacher salary is approximately $46,500 according to AFT figures. Teachers have a 4 year degree, which they invested in, teach your kids, and still earn less money than a person using a pneumatic screwdriver. That's just not reality.
Now lets look at GM's cars. With the notable exception of Cadillac, GM makes cars that are just plain ugly. Cadillac, at least, is trying to make a design statement. Remember the Pontiac Aztek. Who in the world designed that thing and then stood back and said "what a beautiful car"? Most of the GM cars look like they were design committee failures. Look at the average Honda and compare that to the average Chevy. The Honda has smooth flowing lines, while the average Chevy looks like one design team did the front, another the middle, and another the rear end.
Where is GM's technology? While Honda, Toyota and BMW offer cutting edge engine technology packing more power and better mileage, GM offers us the same tired and worn out engine technology year after year. Why? Because it's cheap. At one point in time GM lead the pack with hybrid technology. It frittered away that advantage and now seriously lags the market.
How about value. For $15k you can buy a Honda Civic which will comfortably seat 4 adults, offers zippy performance, and excellent fuel economy. In addition, most people expect the Honda will run forever with little besides ordinary maintenance. What can you get from GM for $15k, and what are your expectations for the trouble free nature of its operation? I have a Suburban. You can fill a 1" binder with all the repair receipts it took to get that truck running right and not breaking down in the first year I owned it.
Here's how this Peanut thinks GM can get it in gear. First, pay all of the execs $100k per year and then a bonus based on market share and profits. This should focus them in the right direction. If they don't like the pay package maybe they will all leave and some folks can be hired who are interested in making GM better. Secondly, get a labor contract that allows the company to close plants without having to pay for idle workers, and phase in pay that reflects prevailing market wages and health care benefits. Thirdly, get some new designers. Hire some folks from BWM and Honda who know how to make good looking cars that have excellent reliability.
Come on GM, get real. Maybe with some improvements more of us Peanuts would consider buying your products. Maybe they should hire some of us Peanuts to straighten out the joint ....
First of all, the executives running GM need to get real. By most business metrics, GM is a failure. It loses unbelievable amounts of money, its market share is in (and has been in) a downward spiral for years. Its bond rating is junk and its stock has been going nowhere but down in the last 5 years. Yet, for some reason, the five top execs at GM pay themselves $13.8 million per year. For what? They are managing a sinking ship. Why do they deserve so much pay? I wonder what the execs at Toyota pay themselves for running a successful company?
Next, the unions need to get real. According to UAW published figures, the average assembler makes about $53,000 per year and pays very little for health care costs. $53,000 per year? Now, for comparison, the average teacher salary is approximately $46,500 according to AFT figures. Teachers have a 4 year degree, which they invested in, teach your kids, and still earn less money than a person using a pneumatic screwdriver. That's just not reality.
Now lets look at GM's cars. With the notable exception of Cadillac, GM makes cars that are just plain ugly. Cadillac, at least, is trying to make a design statement. Remember the Pontiac Aztek. Who in the world designed that thing and then stood back and said "what a beautiful car"? Most of the GM cars look like they were design committee failures. Look at the average Honda and compare that to the average Chevy. The Honda has smooth flowing lines, while the average Chevy looks like one design team did the front, another the middle, and another the rear end.
Where is GM's technology? While Honda, Toyota and BMW offer cutting edge engine technology packing more power and better mileage, GM offers us the same tired and worn out engine technology year after year. Why? Because it's cheap. At one point in time GM lead the pack with hybrid technology. It frittered away that advantage and now seriously lags the market.
How about value. For $15k you can buy a Honda Civic which will comfortably seat 4 adults, offers zippy performance, and excellent fuel economy. In addition, most people expect the Honda will run forever with little besides ordinary maintenance. What can you get from GM for $15k, and what are your expectations for the trouble free nature of its operation? I have a Suburban. You can fill a 1" binder with all the repair receipts it took to get that truck running right and not breaking down in the first year I owned it.
Here's how this Peanut thinks GM can get it in gear. First, pay all of the execs $100k per year and then a bonus based on market share and profits. This should focus them in the right direction. If they don't like the pay package maybe they will all leave and some folks can be hired who are interested in making GM better. Secondly, get a labor contract that allows the company to close plants without having to pay for idle workers, and phase in pay that reflects prevailing market wages and health care benefits. Thirdly, get some new designers. Hire some folks from BWM and Honda who know how to make good looking cars that have excellent reliability.
Come on GM, get real. Maybe with some improvements more of us Peanuts would consider buying your products. Maybe they should hire some of us Peanuts to straighten out the joint ....
posted by slates at 5:14 AM
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