Why Now?
Tuesday, June 07, 2005
  The Thinking That Got Them In Trouble
According to Rick Wagoner, the CEO of GM, the company is losing money because health care is too expensive, there are too many plants, and too many employees, so he's going to close plants and fire 25,000 people, on top of the three plants and 5,000 people he's already laid off. He says this will save $2.5 billion/year.

Ah, Rick the problem is you are not selling vehicles. With the price of gas rising people don't want the gas guzzling SUVs you decided to make. If you had shifted to quality fuel-efficient cars, instead of large trucks, people would buy them. If you had started making a hybrid, they would be on waiting lists, like the months people wait to take delivery of a Toyota Prius.

As for the cost of building cars in the US, Toyota and Honda seem to make money building cars here, and even exporting them. They are building new plants in the US to increase their production.

You claim that existing plants are not efficient, so why didn't you modernize them? Isn't that your job, to maintain efficiency and save money?

As I see it, Rick, you are an overpaid fool, who can't read the car market, and missed the shift to more efficient vehicles when the price of oil took off. You think you should keep your job while the people who built the cars you ordered, should lose theirs. If you spent as much time watching the car market as you apparently spend watching the stock market, the problem wouldn't have gotten this bad.

Where's the "got to have" GM vehicle that has been introduced on your watch?

Your proposal is to reduce capacity and hope to increase profits on lower sales. Why don't you just sell everything and become a Toyota dealership, that with increase your profit margin?

 



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