Another Rant About GM

In a previous post I blasted Rick Wagoner concerning how he ran GM. Mr. Wagoner ran GM into the ground, in part, by focusing on SUVs in the American market. So I was taken by surprise yesterday when I come across an article on the New York Times website, http://www.nytimes.com/2009/04/22/business/global/22auto.html?_r=1&scp=3&sq=&st=nyt, that documents how well GM is doing in China’s automobile market by focusing on fuel efficient vehicles. Was I wrong about Mr. Wagoner? Did this article change anything?

After I ruminated on this a bit, I realized that I was incorrect in my assessment. I now think GMs management was even worse then I originally thought. In the first post, I just assumed that Mr. Wagoner, and the rest of GMs management were totally ignorant of the problem. Now I know that on some corporate level GM management saw the problem coming and ignored it.

In addressing the eventual shift in the US market, I am not implying that GM could take the vehicles intended for the Chinese market and sell them in the US. I understand that vehicles built to China’s automobile standards will not meet US emissions and safety standard. Furthermore, I realize that it is not easy, or practical, to take a vehicle designed for China and add a few things so it will be good for the US market. It is just that I would have expected GM to see what was going on in the Chinese market and apply it to the US market.

Yes, I know that the US market was buying SUVs and that GM was filling that market need. Yes, I know that the current financial meltdown exacerbated the problem. Yet other automobile companies are weathering the same set of problems better then GM. GM management did not prepare the company for the eventual change in the market. GM management knew the problem was coming, but decided to risk the company and keep cost down to maximize the profits, and their bonuses. Instead of making sure they had a viable solution, they hoped that the problem would never come, or at least not on their watch.