General Motors Death Watch 158: Of Mice and Men

Robert Farago
by Robert Farago
general motors death watch 158 of mice and men

“It would have helped to have a little bit of sunshine.” What a strange statement. Not “General Motors is prepared to weather the economic downturn ahead.” More like “Darn it! Just when we got our new picnic blanket spread out, it’s started to rain!” But then GM CEO Rick Wagoner is a GM lifer, a Harvard-trained beancounter, a man whose self-effacement hides a genuine lack of leadership. “We look forward to the sunny days,” Wagoner continues. “But realistically we can’t plan on it for next year.” So what IS GM’s plan?

Rick Wagoner took GM's helm on May 1, 2003. Despite an arterial spray of red ink, the former CFO refused to set a timetable for a titanic turnaround. In fact, from that day to this, Wagoner has never publicly declared ANY hard targets for returning GM's North American operations to profitability. Not sales per dealer. Or profit per vehicle. Or total turnover. Or market share. Or, God forbid, profit. Nothing.

GM is a public company, with tens of thousands of shareholders and workers. Why haven't these "stakeholders" held Rick Wagoner's feet to the fire and demanded a quantifiable turnaround plan? We need only look at Carlos Ghosn’s Nissan revival to understand the importance of clearly defined targets in a crisis. We need only look at GM to understand what happens when a Board of Bystanders allows upper management to drown out all opposition by playing "Crisis? What crisis?" at full volume.

For one thing, if you don’t have quantifiable goals, you don’t have accountability. Internally, this leads to bad decisions which lead to… more bad decisions. Incompetent managers fail upwards. The same people who brought over the Pontiac GTO from Australia are bringing over the Pontiac G8. The same marketing mavens who counseled potential Saturn buyers to “Rethink American” now counsel them to “Rethink,” while their own status remains quo. In GM’s land of the blind, the no-eyed man is king.

Externally, the lack of accountability frees Wagoner’s mob to justify GM's declining fortunes without a single mea culpa. Over the years, they’ve dismissed “bad news” as politics (unfair currency exchange), inherited burdens (union health care), economic factors beyond their control (housing market downturn, rising gas prices), and the sad but temporary result of their brilliant master plan (reducing incentives and fleet sales). The bad news continues. As do the excuses.

GM's favorite "excuse" is actually simple misdirection. Again and again, Wagoner and Co. point at “The Next Big Thing” and predict "sunny days" ahead. In consideration of GM's $2.1b annual ad budget and their own ignorance, the mainstream press propagates this "bright shiny object" spin– and ignores the mediocrity blighting all of GM's eight U.S. resident brands and the vast majority of its 51 product portfolio.

The media’s willingness to give GM a pass on hard targets, to simply buy into GM’s “pay no attention to that market share loss behind the curtain” ploy, never ceases to amaze me. The Associated Press’ interview with Wagoner is a perfect example; it lays out the CEO's “strategy” without any serious inspection.

“Wagoner said ‘the deal’ topped the reasons people bought a GM vehicle in 2004. Now, thanks to stylish new models like the Cadillac CTS sedan and Buick Enclave crossover, the company says exterior styling tops the list, followed by value for the money. ‘I don't want to mess with that. I want to keep building on that,’ he said.”

Huh? Smack dab in the middle of GM’s Toe Tag Christmas sale, just when the company is loading massive incentives on its products and advertising nothing BUT the deal, Wagoner says his customers are now buying GM vehicles based on style rather than price. Where’s the supporting data for that assertion? Even if we accept this as some kind of cunning plan, what does it mean for GM's future?

Forget it. Style isn't GM’s new secret weapon. GM’s chronic Attention Deficiency Disorder– enabled by a leader who refuses to draw a line in the sand and take responsibility for his company's sinking fortunes– tells us that the automaker will be off chasing the next Next Big Thing just as soon as sales and/or hype over the Enclave/CTS/Malibu subsides.

The truth is, without real leadership, without a CEO with a clear and clearly expressed sense of direction and urgency, GM doesn’t stand a chance. For those of you who think Wagoner has sufficient situational awareness and decisiveness to get the job done, I leave you with his response to a question about the impact of new federal fuel standards.

"I do think the challenge is really twofold. It's not just, 'Can you get the technology?', but 'What happens if people don't want to buy it? That is the question mark that concerns me, but we'll have plenty of time to play that out."

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2 of 44 comments
  • Bfg9k Bfg9k on Dec 26, 2007
    knochj : I think they (ultra-wealthy) will get hit with the humble stick. Ron Paul has a good chance of winning the Republican nomination, as he’s the only Republican candidate who’s not an intellectual prostitute. There is absolutely zero chance of Ron Paul winning the Republican nomination. As a historical reference, the last time a candidate not-preferred by the Republican establishment made headway he was destroyed with a horrific dirty tricks campaign during which the whole Republican party and the media refused to call out the perpetrators. I refer, of course, to John McCain after his surprise 2000 win in NH and subsequent character assassination by Karl Rove in SC. As for GM: I wonder what the market share of trucks was before the SUV/truck craze of the 90's? If that's where the market is headed, with mostly those who really need trucks buying 'em, where does that leave Detroit? Not in a good place, methinks. Maybe I should buy more Honda stock.

  • Al9226 Al9226 on Nov 29, 2008

    Failure is at the top. As a Car guy (11 yrs working in the plant and 27 years selling them) I've had to endure generation after generation of the same cookie cutter CEO's. You know the ones who's egos preceed them. The ones who look for the butt kissers as underlings. They haven't had to buy a car for years so how would they know what people are looking for in their stores. Rick Wagoner should resign now - no yesterday and let someone who knows what they are doing take the helm. They have repeatedly let their Customers, Employees, Dealers, and Dealership Employees down. If I told you to invest in a company that was going to do that, would you?