Chrysler and GM: A Classic Case of Top Management Failure

The headline to an article in a February, 1968 issue of the Wall Street Journal read something like, “Domestic Automobile Sales Down, Foreign Automobile Sales Up; Japan Could Be Big Player Someday.”  Today, some 41 years later, with Chrysler and GM going into bankruptcy, are we in a position to fully appreciate the profoundness of that headline.  The Japanese automakers took on the mighty US automakers on their own turf and in a little over 40 years took control of the American auto industry.  What’s more, they made it look easy.

 

            This begs the question: Why was it so easy for the Japanese automakers to walk in and take over?  The answer is simple.  The senior executives running the American auto companies were completely and totally out of touch with the basics of making and selling cars—they lacked hands on knowledge and experience in dealing with front line employees, customers, suppliers and technologies.  This made for pretty easy pickings for the Japanese auto executives who were well schooled in those same basics.  Consequently, when the Japanese automakers moved in, the American automakers had nothing to counter with.  For the Japanese, it was like fighting a battle where your counterparts had no weapons.  And now, as Paul Harvey used to say, “You know the rest of the story.”

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About Ross Reck

Who am I? I am the author of The Engagement Formula, Turning Your Customers into Your Sales Force, The X-Factor and my popular weekly newsletter: Ross Reck’s Weekly Reminder. I'm also the coauthor of Instant Turnaround!, REVVED! and the best selling The Win-Win Negotiator. I've also spoken at hundreds of meetings, conferences and conventions throughout the United States, Canada, Latin America, Europe and Asia. My consulting clients include Hewlett-Packard, John Deere, American Express, Janssen-Ortho, Inc., Shire Pharmaceuticals, Philip Morris International, the Chicago Cubs, Rolls-Royce and Xerox. I received my Ph.D. from Michigan State University in 1977. From 1975 to 1985 I served a Professor of Management at Arizona State University. During my career at ASU I was the only two-time recipient of the prestigious “Teaching Excellence in Continuing Education” award and was identified by the university as an “Outstanding Teacher.” In 1985 I left my position at ASU to search full-time for a new "Management Model" to replace the current model with it's emphasis on authority, control and formal communication channels. Last February, I found it (it's actually a leadership model) and it's featured in my new book, The Engagement Formula: Three Simple Steps that Guarantee Full Employee Engagement.

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