Interview with Rick Wagoner – GM CEO

Chief Executive has an interview with the CEO of General Motors, Rick Wagoner. He seems optimistic about GM's future, but reading about his strategy for turning around the company, I don't see any reason for a positive outlook.

First, we're focused on product. I invite you to look at the next generation (sport) utility. The improvement is simply stunning. We need to keep that sort of pace going. Second of all, we obviously have to step back and re-look at how we're going to market from a sales and marketing strategy. That's problemably the long pole in the tent as far as converting over to this focus on product and value and trying to get off the incentive marketing–which has served us well but has run its course.

The third area is basically a frontal assault on all areas of cost to make sure we are driving to be the absolute most efficient manufacturer in the world. That's hard because it's meant significant capacity reductions and it means continuing to trim down workforces in the high cost countries, like the U.S. and Germany.

Fourth is the very challenging issue of addressing health care> We have really a breakthrough agreement with the UAW. It's historic in its nature, but I would say it's a very important first step to getting health care costs and particularly the legacy aspect of those under control. It's a massive competitive disadvantage, which we simply as an enterprise cannot carry and at the same time achieve the objectives that our shareholders have for us and invest in the future of our products. We've got a spotlight on that this year. We've also made some changes in our salary plan and we're going to need to keep working on health care. If you carry a $5 or $6 billion bill that your best competitors don't, that's a heavy burden.

Quality products, good marketing, cost control… that's pretty basic stuff. He should of said that the economics of the auto industry have changed and GM needs to innovate like hell to find a way to do something unique and different. At this point, I say throw out the standard playbook and bet the company on a crazy new strategy, or figure out how GM's core competencies can provide a competitive advantage in other industries and start transitioning over.

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  • I worked for GM. This is a company that still runs Lotus Notes, was “testing” Blackberries for the pension fund investment staff up until about a year ago, and approached the “retro” car craze by dumping a big engine into a car they were already making (the GTO/Monero).

    Don’t count on big innovation anytime soon.

  • willard shallenberger

    i have a vehicle that post offices would buy immiediatly, and i know that within eight years California would have to buy your vehicles