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| edward |
GM's CEO
 Posted: Tue Dec 16, 2008 10:30 pm |
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Joined: 01 Dec 2007
Posts: 68
Location: Chicago, IL
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Several years ago, when a minor shakeup in the automotive industry worldwide was underway, Carlos Ghosn and Rick Wagoner were both invited to speak at the Automotive World Congress in Detroit.
Ghosn was at the time the new Nissan chief, appointed by Renault as the Japanese company was taken over by the French company. Wagoner was the incumbent CEO of GM, and he continued to survive the turmoil of Detroit, as the other two CEOs were getting replaced.
As Ghosn spoke, a crowd of several hundred automotive industry folks from different parts of the world was quiet and attentive. Perhaps his spoken English with Lebanese French accent, assisted by hints of Brazilian Portuguese and Japanese accents, forced the audience to focus on every word that came out of his mouth. And no word was wasted. Ghosn was to the point, and he conveyed his plan in concise and austere a manner.
Ghosn's speech was analogous to Napoleon's first address to the generals in Italy, after Napoleon with no power and little influence was given the command of an unorganized post. Napoleon was determined to fix and conquer. The generals attested later that the French words that came out of this short man with heavy Corsican accent was difficult to understand, but Napoleon made them believe in him and believe that they can achieve something.
Wagoner's speech was entertaining. He cracked several jokes, and used his eloquent command of English and commanding physical presence to embrace everyone in the audience. Afterwards, folks felt good about GM and Detroit, despite the freezing wintry weather outside. But it was not clear what the plan was to turn GM around.
Wagoner hired a true car guy named Lutz back from his retirement. Since then GM has put out a few great looking cars. GM took a piecemeal approach to change. A major overhaul of production efficiency and quality control, which are at the core of GM's problems, was happening too slowly. GM continued aggressively discounting to push out products.
Contrary to GM, Nissan took a big-bang approach to change. Ghosn eliminated and consolidated platforms and engines. For example, the award winning VQ-series engine started to power most of the luxury vehicles, instead of just one car. Nissan's overall perceived quality started to improve as well with tighter quality control. Ghosn completed the 5-year turnaround plan in less time. Ghosn became the chairman designate for the entire Renault empire.
Wagoner is asking for the tax payers to bail out GM. And he is defending his job.
Ford and Chrysler got their new management a few years ago. They recruited some of the best recognized automotive executives from Toyota. Jim Press went to manage Chrysler. Jim Farley went to manage Ford's marketing. Debora Meyer went to manage Chrysler's marketing.
Ford went outside of the industry to hire the chief. Mullally came from Boeing, and he is a firm believer of Toyota Manufacturing System, a system that embodies the essence of efficient operation that many of the successful companies employ. Mullally expeditiously raised money for Ford's reorganization when the credit was still available. That is why Ford is not currently asking for a bridge loan today.
One of the well-known Detroit experts from Center of Automotive Research was on one of the business cable channels. He vehemently degraded the journalists for their ignorance of Detroit, and strongly defended GM and its management.
The same cable station invited another well-known automotive manager, who co-founded CarMax. He flat out said it should be either Jim Press or Carlos Ghosn who should be in charge of turning GM around.
They also interviewed a union worker from a GM assembly line. He said that the workers needed to see the changes from the management first before they started to make the sacrifices.
Whether it be the philosophically preaching approach of Jim Press or Napoleonic expediency of Carlos Ghosn, one thing seems clear. GM needs a leader who can reenergize the company from bottom up, top town, left to right and right to left. Wagoner could certainly accomplish this, but his credibility and time are running out. |
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