Interesting quote in today's WSJ regarding Kirk Kerkorian and the proposed GM/Nissan/Renault deal:
He and Mr. York, his 67-year-old sidekick, have decided — it is clear from their actions, from Mr. York's public statements and from persons privy to their thinking — that the problem at GM is management. And everything else, ranging from high labor costs to lackluster vehicles, is just a symptom.
I would have to agree with their assessment that GM has systemic leadership problems. You have to hold Wagoner responsible, but can you fix things just by bringing in Carlos Ghosn?
We had an analogous situation when I worked at a GM engine plant in 1995 and 1996. The plant was really struggling in all areas. We had a new plant manager brought it who was NUMMI trained. He stood up in front of the whole plant and said basically that we had suffered through a management problem. With the same workers, we were going to change the management approach (to lean, although we couldn't call it “lean” due to politics) and success would follow. I was very impressed that the new plant manager didn't blame the workers, as the old regime would have done (and did).
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Although I believe any statement that begins “the problem is…” is inherently flawed. Each problem requires its own solution, and if anyone believes there is one grand solution to the GM problem hasn’t taken a close look, whether they believe it is management, or unions, or products, or unfair trade policies. GM doesn’t have just one problem, or a dozen. They have millions of problems. No one feature on a vehicle, change in pay practices, new union contract or new CEO will solve the problem.
I will say this, however, that Ghosn has a track record of being aggressive and not waiting for change to occur. Fujio Cho said “the world will not wait for companies that resist reform.” Ghosn does not resist reform, but makes it happen. Is he the solution? No. Is he willing to take bold action? If his track record is any indication, he is willing.
One last point: a “tie up” is different than a acquisition. Buying 20% of GM buys influence – that’s it. Let’s call it what it is.
“Management” is a vague term for an answer. Is it really the “root cause”? What do you mean by “management”? If the authors mean the problem is the CEO, that’s a different problem than saying the problem is “management”, with “management” meaning “the engrained system of management that is perpetuated throughout the company and is embodied in all levels of supervisors and managers.”
Just changing the CEO, or bringing in Ghosn, won’t change the engrained way of managing at GM. That’s why it is so hard for GM to suddenly turn into Toyota. They can attack waste at the plants without changing the underlying management system, which is what I suspect has always been happening. Maybe it’s too big of a ship to steer? Note that most of Ghosn’s solution was to downsize the Nissan ship. GM is already going down that path.
GM cannot achieve change through Lean or other programs that devalue people further. Why not instead, create a system where people help to become part of the solution. Many have great ideas — and all that is lacking is facilitation and that requires a whole new kind of acumen – rarely found in old guard. Just another thought to add to a great discussion. Thanks for this post.