The New GM And The New Chrylser Will Not Survive

           Chrysler and GM will emerge from bankruptcy with completely new looks.  The logic is that the new Chrysler and the new GM will be in a much better position to compete companies like Toyota.  As GM vice chairman Bob Lutz put it, “We will be smaller, leaner and we’re going to be a powerhouse.”  Unfortunately, that doesn’t have a chance of happening because Chrysler and GM have not dealt with the one issue that got them into this position in the first place–their management style–the way they treat their employees who do the work that the company gets paid for.  Both Chrysler and GM have a long history of top-down management that uses fear as a motivator–the people at the top are treated like royalty and the people at the bottom are treated like third class citizens–it’s part of the DNA of these companies and Ford’s too, for that matter.  Until these companies address this fundamental issue, they are doomed to eventually be run out of business.

          An employee focused management style has been the competitive edge of the Japanese automakers all along.  They’ve even tried to point this out to the executives running the American auto companies, but nobody listened.  In an August 11, 1980 issue of Fortune magazine, an executive vice president of Honda was quoted as saying, “…capital investment alone will not make the difference.  In any country the quality of the products and the productivity of the workers depend on management.  When Detroit changes its management system [the way it treats its employees], we will see more formidable American Competitors.”  Since then, the Detroit automakers have dramatically changed how the build cars, but they have not addressed the one issue that allowed the Japanese automakers to take over the American auto industry–their management style–the way they treat their employees who do the work that the company gets paid for.

This entry was posted in My Posts and tagged , , , , , , , , , , , on by .

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.

One thought on “The New GM And The New Chrylser Will Not Survive

  1. Matt Marino

    I like your thoughts about both Chrysler and GM. The UAW that is fully in control of GM and portions of Chrysler. It is the UAW who has not compromised to make either of these organizations any better. Now the UAW is fully responsible for the quality and service we can expect from its finished product. Why are the other auto manufacturers able to provide quality, affordable price, and low costs in manufacturing their finished products? It is because of how they treat and keep their employee base.

    Had either of these corporations GM and Chrysler had the guts to file for reorganization without the Feds help, the UAW and all other vested interested organizations been more apt to participate in curing both Chrysler and GM of their continuing corporate ills.

    I don’t agree with the current mantra and premise of the Congress and the current Administration on not allowing these organizations to fail because of their size and influence. Many large corporations have failed and either have reorganized or completely liquidated their existence. There is way too much government intervention at the expense of our tax payer revenue and tax payer interest.

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload the CAPTCHA.