GM is cutting another quarter of its workforce. That’s really not too surprising an announcement, given what’s been made public about the company this year. What is amazing is how so few people saw it coming.
There are lots of pundits screaming about the high cost of health care in each GM care. Or talking about how the pension plan is too expensive. And of course some simply say GM designs me-too product, or doesn’t produce to enough quality. But in fact, none of that is the real issue.
In 1980 Chairman Roger Smith of GM saw that GM’s future was in jeapardy. He undertook a series of actions to help GM move from a large, cash rich car company into new growth markets of IT, electronics and avionics – while creating a new division that would compete with Japanese producers like a Japanese producer. He saw that GM needed to expand its markets and be more than a "car company." GM needed to learn how to do new things.
No one expects GM to regain its glory. The amazing thing is that this bullet has been flying at GM for the entire period. Like a 5 mph bullet.
GM couldn’t get out of the way. It’s desire to remain locked into its old business model, at the risk of complete failure and the destruction of thousands of jobs and billions in shareholder wealth, was greater than its willingness to explore new opportunities. GM had visions – but it never learned how to address its lock-in.
Now GM is moving faster than ever toward the Whirlpool. Slashing jobs and creativity as fast as it can. All in a last ditch effort to dodge that 5 mph bullet. Ever heard the phrase "too little, too late"? It’s obvious that after this long, the executives simply don’t know what else to do. Creativity and innovation have atrophied and disappeared from what was once an innovative and growing company.
But, executive after executive since Smith has retrenched GM to its old business. And pundit after industry expert has pushed GM to be a "better" car company. And year after year, GM has struggled. Now, 20+ years later GM is finally tilting into the Whirlpool
