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Management Failure

Published: August 24, 2009

[Re: “America, We Can Make It!” Publisher’s Letter, May/June 2009]

We get what we pay for. Imports can be cheap for a while, but shipping costs even out the prices over time.

Take the car business; the Big Three are not hurting because imported cars are so much cheaper. Once they were (in the 70s and 80s) because we let them sell here at less than where they were produced, i.e. dumping.

More than that, though, a poorly run company makes bad decisions. The automakers did not manage their assets well. They tried the drunken-sailor process. It went from head to toe, including all middle management and the unions. They are now dumping, for pennies (or less), all the misused companies they splurged on, called GM divisions.

They had no business running other companies when they could not properly run their own. They applied the same foolish processes to the ones they bought and are now giving away.

Now they are also burying their companies by shafting the dealers who made them great. Frankly, the greatest asset the Big Three had were their dealers. I stress “were” because that loyalty from the dealers is gone forever. GM and Chrysler will never be trusted again. However, the Big Three never really ran their companies with the focus on sales that the dealers wanted. Politics was all that mattered internally. Good employees got frustrated with the internal nonsense and quit. GM even went so far as to neuter their bread and butter, Chevrolet. For over a decade, GM pretended that Buick, Oldsmobile, Pontiac, Cadillac, Hummer, etc. needed more marketing funds than Chevy. The GM management ran it like it was their toy. Jealousy against Chevrolet was more important than the company’s bottom line.

Chevy brought in billions [of dollars] a month, and they “invested” it in Hummer, Saab, and the other losers that someone can buy for a song and turn into a strong company, now, if they have great managers. I am confident you are just biding your time until the whole thing, i.e. Chevy, is being given away like Chrysler. After all, Fiat got it for nothing.

Honda and Toyota run their companies like businesses. They are producing cars here in America just fine, even with the UAW.

Bad managers make a bad company every time. Get good managers in charge, and you find out that some companies are pretty good after all, huh? Yes, the good CEO needs to have good middle managers to succeed, too. There are still plenty of great Americans, but we got soft and well, OK, stupid. It is time to turn up the heat and take back our dominant position.

Americans can regain manufacturing dominance. The workers are waiting. Where are the leaders who will manage the operations effectively?

-Gary, via web comments

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