Case in Point: One example of why the General is losing to Toyota
All of you should certainly know by now that I’m a loyal General Motors man. If I buy another American car, it will likely be a GM product. I don’t like to see them in the current economic predicament. It’s bad for the US automotive industry and it’s bad for Saab.
On the other hand, I understand that GM has faults. They’ve made mistakes, and they’ve learned from some of them. Unfortunately, it seems that there are some lessons that they’ve yet to learn.
Case in point: market-driven manufacturing agility. It’s important in this new world.
This morning, Toyota announced that their new plant currently under construction in Mississippi (a Southeastern US state) would make the Prius rather than the Highlander SUV as originally stated. Reuters reports in the article that Toyota has a one-day inventory of the Prius on hand and a two-and-a-half-day inventory of the Camry hybrid in the pipeline, while they are partially idling their plants that produce pick up trucks and SUVs.
That’s it. Toyota just adjusted manfufacturing as they believed they should given the circumstances. No muss, no fuss.
Contrast that with the recent Saab 9-3 manufacturing row. For crying out loud, GM couldn’t easily control where they build a car two or three years from now, much less make significant moves on the fly to adjust to changing markets! General Motors is mired in labor relationships that are not healthy for long-term survival, they’ve got too much invested in plants that aren’t efficicent, and they are hooked on being this massive producer that can make cars for all segments of the market.
To some degree, this isn’t a fair comparison — the Toyota plant isn’t even running yet, so there are no current contracts to break, no expectations, etc.
However, it does point out a primary difference between the two. Toyota just takes action. End of story. Every time GM takes action, here comes the German Auto Union/UAW/shareholders to block the way. It’s insanity. GM has, in my view, traded the ability to take decisive action for stability. The problem is that stability is overrated when it comes to long-term success in any market. Change will come. It’s a given. GM has indentured themselves to people that don’t want change or want changes that are counter to the survival of the company.
I get closer everyday to making my spoof of Roger and Me by Michael Moore. I’ll call it “Ron Gettlefinger and Me” and I’ll interview the same people that Moore interviewed, but I’ll edit it to show just how much GM poured into the UAW and how a sense of union entitlement forced GM to make the decisions that they made. It’ll be a laugh riot!!
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Great points, Swade. You have to make a quick decision based on current economic conditions.
Again, give people what they want. Customers are crying for hybrids, so you build them.
Yes. It’s that simple.
wrong target, it was eggsngrits who wrote the article.
That is a great analysis of the situation, and it is too bad it is true. I read that article about Toyota as well this morning and thought about how this is just another nail in GM’s market share.
I agree that the UAW is a problem for GM, but you cannot blame them for everything. Investing in trucks and SUV’s and not quality cars with modern powertrain’s has certainly done damage to GM over the years – although feeding those UAW members probably played some sort of role in that as well.
“Ron Gettlefinger and Me” should be a great hit with TS readers, be sure to include some of us in the production.
Ted: I agree. I threw that “shareholders” thing in there because it’s Kerkorian’s minion on the board that skewed the emphasis toward “high volume” vehicles like the pickups and SUVs to the detriment of other cars.
Part of the problem is also the unfairness of the system. GM has been going through thick and thin with UAW as has Ford and Chrysler. Along comes new players and they are given a completely free slate. One of the most impoirtant roles of the state(s) is to create a level playing field for business. Right now the field field is extremely skewed, Its like playing football in the Alps, with one team always having to play up hill.
GM has for sure made mistakes in the past and they still are not prepared to take the necessary fights but lets face it Toytoa an Co did not have take those fights at all.
Snot: That’s a great point.
GM got that advantage in my area when Saturn rolled into town. I wasn’t enough in the long run.
Perhaps a bail out is just evening the field a bit?
Sorry eggsngrits - I forgot to look at who wrote this entry.
GM has done itself in the same way that the US steel industry did itself in during the 1960’s and 1970’s. They chased huge profits and cushy salaries for the management staff instead of reinvesting in their production infrastructure. This meant that the foreign competition that did everything to keep it’s production facilities at the cutting-edge ate the lunch of Bethlehem Steel and the like, and the same thing is happening in the Auto industry.
Toyota (and most of the European companies for that matter) don’t have the huge executive salaries that GM and Ford do, and those hundreds of millions per year instead go towards product development and improving production efficiency. So when consumer preferences change, GM has to close down it’s outdated factories and pay off UAW workers while Toyota quickly and efficiently re-tools their lines for the more popular models.
And it isn’t the UAW’s fault, if GM had kept improving their production facilities they wouldn’t be anywhere near cowering to the army of union workers that they currently employ.
Once again, it would be REALLY HELPFUL if the author’s name showed up on the article page, like it does on the main page.
…I don’t really have anything to say about the story except that it makes me think of that story on Jalopnik about how you can get an official GM Toyota badge.
Jeff: (in old man Chinese accent) “Grasshopper, one must have the patience of the orchid. Or at least the patience of the tiger lily.”