“If GM Can’t, Why Can’t They?”
Last week my post “Are Quality Methodologies All Smoke and Mirrors? Part One” was a review of my interview in 1988 with F. James Mc Donald, the CEO of General Motors Corp. at that time. The interview focused on what GM was doing to bring about a radical change in the quality of all of their products.
- He recognized that the playing field had changed and that the company had new benchmarks.
- He stated that quality is the No. 1 operating priority at GM.
- He stated that quality objectives and strategies are part of their five-year business plan.
- He had GM doing concurrent design with early supplier involvement.
- They had strategic vision and that vision was simply to offer world-class quality in every market segment. By “world-class,” he explained that GM must be equal to or better than the best in the field, product for product.
- Management commitment
- People development processes
- Quality performance processes
- Customer satisfaction
- He stated that GM must be the world leader in quality, reliability, durability, performance, service, and value, as confirmed by customer-defined measures and market response.
- He made the top managers in each company totally responsible for achieving the objectives and implementing the strategies.
- He had more than 30,000 employees trained related to performance improvement.
- He recognized that GM needed to stop being the best at problem solving and instead become proficient at preventing problems.
- He required management at all levels to be committed to the plan and demonstrate their commitment by word and action.
- He made GM’s U.S. passenger cars and its worldwide truck and bus operations address changes necessary to improve quality. He made management accountable for improvement, effective allocation of resources, and results.
In reviewing McDonald’s comment, I see that he was saying and doing all the right things. But the results have been disastrous for GM investors, employees, suppliers, and the United States in general. Saying and doing the right things is admirable, but as GM has proven, it is the way you do things—how managers behave, how they spend their time, and what they are interested in that makes a difference. Was McDonald really serious when he said that GM must be the leader in quality, reliability, durability, performance, service, and value as confirmed by customer-defined measurements and market responses?
In my previous post, I asked for input from the readers about what they thought was the reason GM products are still inferior to Toyota after more than 20 years of trying to improve. I was flooded with phone calls, comments, and news all from past GM owners and potential GM buyers. I was very disappointed that I did not receive any input from the management team from GM. I can only assume that GM management does not understand why the quality program did not work for them.
Plenty of times in the last 20 years, they had to correct their many quality product and services problems. I used as my benchmarks, Korean cars that started from scratch about the same time and today are providing quality cars comparable to those from Toyota.
- “Too much focus on quality tools that did not improve profit but took focus away from the market”
- “GM is too big and too slow to react to change rapidly enough.”
- “Very poor GM management team”
- “Poor reliability”
- “Lack of team work and trust for union, management, and employees”
- “It started too late”
- “Too much pressure applied on their suppliers and not enough work on GM’s own processes”
- “Poor customer focus”
- “Poor/untrained dealers”
- “Poor production process, not quality focused”
I’m not going to take a position during this post about the views of GM customers and potential customers. I am only capturing and summarizing their inputs. I will share my views on the subject in a later post.
1. Too much focus on quality tools, not enough focus on the market. GM spent lots of time, effort, and money doing the fad of the week. There were many claims of dollar savings that did not reflect in GM’s profits or customers’ satisfaction. The activity regarding compliance to standards of the International Organization for Standardization (ISO) just added more bureaucracy to an already over burdened system that resulted in little or no improvement. They should have spent the time and money finding out what the customer wanted rather than focusing teams on improving things that the customer didn’t want.
2. Too big and too slow. With eight levels or more of management, customers believe that the GM workers’ concerns are not heard by management. Likewise top management’s words are filtered so many times before they reach the workers that they are completely distorted. GM culture is one of “Don’t stick your neck out; do it the way you have been doing it. Don’t change; slow down so that there’s work enough for everyone.”
3. Poor management. Lots of talk, little action, and no change. McDonald’s answers were textbook answers. It looks like they were written by their quality assurance vice president with little or no level of creativity. General Motors’ management was not and is not committed. They get big pay checks for poor results, while a GM worker is fired for producing poor results. The management team is all blow and no show. As there were management changes in leadership positions, there was lack of follow through on improvement programs.
4. Poor reliability. When I had a GM car, I had to keep a list of things I needed to get repaired. When I switched to a Toyota, there was nothing to put on the list, so I did away with it. GM designs a car for 250,000 miles and then uses parts that fail every 20,000 or less miles. Quality is not designed into GM cars and it must be if they are going to recapture their reputation and stop losing market share.
5. Lack of team work and trust among management, union, and the workers. The GM culture is one where you look out for yourself. Management does not really care about the employees. They look at them as an expense rather than as an asset. The union tries to get all they can without caring about the effect on GM’s competitive position. Management has not earned the trust of their employees so the employees have to look out for themselves with the union’s help. Even within the employees and management personnel there’s a dog-eat-dog environment.
6. Started too late. GM did not care about quality until Japan stole their market share. They waited until their reputation was ruined and then they tried to catch up. Their objective is to be as good as Toyota. What they really need to do is to rebuild their reputation. They need to become much better than Toyota if they want to be given a second chance.
I’m stopping here, as I believe you have an idea of what the customer and the potential customers of GM feel are their problems. Now we are all paying out of our pockets the high salaries that the GM executives are getting. We have the same team of people doing the same thing in a bankrupt company that they were doing before, but now it is being supported by you and me, even if we do not buy a GM car. What do you think?
I would like to get comments from the management team at GM that have lived in this culture so that I can understand from their standpoint why their quality program has failed so badly throughout the last 30 years (1989–2009). Maybe, just maybe, they think it has been a success and they are proud of what they have accomplished.