General motors: the road ahead; What should GM do to improve? Advice from the outside

Automotive Design & Production, Jan, 2005 by Gary S. Vasilash, Chris Sawyer

Key aspects of the organization as it undergoes a major transformation. The competitive environment is tougher than ever, but the company has the opportunity to maintain its position through improved products, processes, technologies--and managerial positioning and decision-making.

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Although General Motors is certainly undergoing a significant transformation as it works to become a more competitive company, there are still several things that it could be doing that, well, may not have occurred to the company's management. So in an effort to help what is still the world's leading vehicle manufacturer, we decided to ask some of the more insightful people that we know--not the usual suspects, but a range of industry experts who have distinctive points of view--a simple question: What three things should GM management do to make it a stronger, healthier, more-competitive company? And the responses were simple. Not easy, mind you, but rather straightforward and commonsensical.

Given the fees that most consultants charge, we figure that we could retire on what GM ought to owe us for this. And we also figure that the corporate execs can't afford to overlook some of the insights found herein.

Dan Sturges, trained as an automobile designer, a former designer for GM, the founder of a car company (trans2), and an advocate for a systems approach to mobility, is senior program manager, Integrated Transportation Systems, at WestStart-CALSTART (www.calstart.org). His suggestions:

1. Become a "transportation" (or mobility) company. Sturges elaborates: "On a recent trip to LA, I watched thousands of cars crawl along the freeway at 2 or 3 mph. I chuckled as I remembered how GM had wanted Bob Lutz so badly because he is a 'car guy.' That notion doesn't seem well suited to take GM to the next level. GM's main product is really personal mobility. When people can't move well--like on the LA freeways--then the value of the product suffers." Sturges believes that communications networks can help ameliorate some of the transportation bottlenecks that exist through such things as car sharing and by improved routing. "In the future," he suggests, "GM has the opportunity to expand upon its OnStar service by offering more flexible and valuable transportation information to its customers."

2. Facilitate stakeholder collaboration. "As we move into this new era of global mobility," Sturges says, "GM should involve anyone interested in its network in the process of reinventing its business. By communicating in a two-way manner with any GM worker, dealer, or supplier about the transportation business future, stakeholders can strengthen GM, and themselves, in the process. As a result, GM stakeholders will become stronger and more willing to be flexible as the company struggles as a large company undertaking rapid change."

3. Power-up design. Given Sturges' background as a designer, this is not a surprising recommendation. But he's not alone in his sentiment. According to Sturges, "It was during the Bill Mitchell days when GM beat everyone in design, but those days are long gone." Mitchell was the second head of GM design, following Harley Earl, who retired in December, 1958. Mitchell retired in 1977. Sturges continues, "While GM has some great in-house designers today, far too many of them come from a Corvette mindset and lack an orientation to expand upon cars and trucks. Could GM someday use its giant steel stamping presses to build a new type of modular dwelling? Perhaps. Americans have an amazing ability to develop all-new concepts, which is a strength that we should play to."

Jeffrey K. Liker, professor of Industrial and Operations Engineering and director of the Japan Technology Management Program at the University of Michigan (http://www.personal.engin.umich.edu/~liker/) and author of The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer (McGraw-Hill), first sets the stage by pointing out that among the issues that GM presently faces are: (1) the high pension funding that is "something it has to live with adding hundreds of dollars to the cost of each vehicle. This is clearly a competitive disadvantage that is outside GM's control at the point." (2) What he describes as "decades of neglect in its product line and quality," which he thinks has led to a less-than-beneficial customer perception of the corporation's products. (3) Low employee morale during the 1990s. With those givens, however, Liker goes on to observe, "GM has done a considerable amount to pull itself up by its bootstraps. This includes finally getting serious about learning from the Toyota Production System." On the subject of the Toyota Production System (TPS), Liker believes there are several factors at play in GM promoting it--though in the version that corporation personnel have tailored so that it is GMS (Global Manufacturing System)--including, the numerous managers who worked with TPS at NUMMI; chairman and CEO Rick Wagoner's support of lean; the development and distribution of a GM-based lean standards book; the deployment of competitive manufacturing teams throughout GM plants; and successes in places like in Eisenach, Germany, and the GM Lansing Grand River Plant (Michigan). What's more, the recent successes at Cadillac, with regard to designs and "remarkably good quality--largely due to GMS," are helpful, too.