General Motors has started to run television ads, asking Americans to ‘put on their rally caps.’ What is most disturbing about this message is that management of GM might really believe that wearing an inside-out baseball cap will turn the company around. Make no mistake, there has been no attempt by management to actually repair any of the crippling problems sinking the company over the last handful of years. I suspect they have used up all the lucky rabbit’s feet that they purchased with our tax money and are now turning to other forms of superstition to save their jobs. GM’s strange behavior is not limited to the last few weeks. It is instead a pattern of behavior suggesting their lack of judgment. Permit me to highlight some specific examples of GM’s insanity.
GM has not turned a profit since 2004, that’s four straight years of losses. GM, no longer able to pay their bills, decided to “restructure.” But wait, that’s not entirely true. It was only as a contingency of government support that GM produced a plan to revamp the company into something that will survive in the future. Apparently, GM management thought four years of poor results were not enough to warrant a rethinking of their strategy. After the GM plan was reviewed, President Obama fired the CEO of GM. We can infer from this action, that GM consulted neither reality, nor accountability, when they formulated their plan. I guess things were not bad enough yet.
Let us not forget GM’s focus on the relevant issues and technologies of the time. Our world is faced with global warming, depleting petroleum reserves and the worst economic downturn since the great depression. Seeing these issues GM management turned their attention to crafting something that would solve all of those problems-the Corvette ZR1!
The Corvette ZR1 is GM’s brand new top of the line, high performance super car. The ZR1 is based on the already high performance Corvette coupe and has been engineered to compete with the likes of Ferrari, Lamborghini and Maserati. The 630 horsepower ZR1 can keep up with many of the neighborhood super cars that the 430 horsepower standard Corvette couldn’t quite catch. And the ZR1 is only double the price of the standard Corvette, and way cheaper than any comparable Ferrari or Lamborghini, for those who are budget conscious. For the environmentally conscious the ZR1 gets 14 miles per gallon (MPG) city and 20 MPG highway. That’s like planting a tree every time you floor the throttle. The sheer irresponsibility of focusing resources on a pet project, during a time of crisis, is indicative of GM management’s lack of judgment.
There is a compelling reason for GM not to focus on small to midsize economical cars for ordinary people. They are good at making big cars. Remember the Pontiac GTO of the 1960s, big engine, lots of power. It started the muscle car era. It was probably one of GM’s greatest successes. GM was good at making big powerful cars.
On the contrary, GM is not good at making small cars. The 1970s saw conditions similar to today, high gas prices, new environmental rules and poor economic conditions. This era saw some of GM’s humblest moments attempting to make small economical cars. Does anyone remember the Chevy Vega or the sporty Chevy Monza. Those cars were so bad their tales can be used to scare auto executives the way the boogyman is used to scare small children. GM does not want to repeat their bad experience with compact cars, and who could blame them. Its not like
How about GM’s lackluster attempt to make a fuel efficient car? GM does market several “hybrids,” which are nothing more than gasoline powered cars with modest electric boost. The hybrid Chevrolet Malibu gets 26 MPG city/34 MPG highway, the hybrid Toyota Prius gets 48 MPG city/45 MPG highway, while the hybrid Honda Civic gets 40 MPG city/45 MPG highway. I guess GM missed the day hybrids were taught in auto engineering school.
GM has indicated that the technology is not yet available to make an effective electric car. But wait, GM did engineer a famous electric car, way back during the 1960s. GM engineers designed the lunar rover, the electric car that transported astronauts across the surface of the moon. Let us step back and put this into perspective. GM engineers designed an electric car that survived launch in a giant rocket and a trip to the moon. The car was then driven across the dusty lunar surface in the vacuum of space, quite a feat of engineering. Hasn’t GM learned anything new about electric cars since then? Consider that the entire history of the personal computer took less time than has elapsed since the lunar rover. I guess GM got upset when the astronauts left the rover on the surface of the moon, instead of bringing it back for a trade-in.
These examples highlight what appear to be poor judgment, ineptitude, and most of all poor management by those running GM. If the government intends to save the company, there will have to be many more management changes. It remains to be seen how deep the surgeon’s scalpel will have to go, before the patient can be saved, I suspect it will be deep. Hopefully, someone with accountability can be found to make the cut.