Dallas, TX –
GM, Chrysler and Ford are about to present a plan to Congress to show they can be profitable - at some point. Many expect the companies just to ask for more bailout money. The companies need what money can't buy.
They need a lot of courage, new language and new leadership. Let's start with language. The union should stop talking about concessions.' The industry doesn't need concessions,' a little relaxing of a union contract here, a few less rigid job classifications. The industry needs to be transformed. The entire business model is busted. The cost structure, the old "we-they" labor adversarial concept, the number of dealerships. This is actually an opportunity if they seize it. I think we all understand why the domestic auto industry should survive. Tens of thousands of jobs are at stake; whole communities are affected. GM announced Wednesday that it was cutting 10,000 more white collar jobs. The workers and managers at the plants around the country need to seize their destiny. The so called leadership accomplishments include GM losing half its market share and the company crippled by legacy issues. Foreign-based but domestically located plants, like Kia in West Point, Georgia, are doing fine, so it's not the manufacturing capability that's the problem. Phil Bredesen, governor of Tennessee, who's a Democrat, says "The distinction between foreign and domestic cars is totally gone now."
But the solution isn't to be anti-UAW, anti-union. It's to be anti status quo, and that requires what change management experts call transformation.' The broad outlines of what it will take have been extensively written about. They need new corporate leadership who aren't finance guys. The finance guys think short term and are just as much at fault as the national union leaders who extracted promises the company can't keep long term. Transformation means working in teams, where GM has already made great progress, and rethinking all the labor contract rules which hinder productivity and a collegial relationship. It can be done. When Saturn was started, it was with a whole new set of rules. It was management, and the finance guys, who largely ignored Saturn, and after a few years, the workers and union leadership at the plant went back to the old ways of doing business. The talent is there. GM proved they could design and build small, fuel efficient cars in the late 90s but the project was cancelled because the cars weren't profitable given the rules that Congress and the unions have saddled the company with. And Congress and the Administration are happily writing more regulations, ratcheting up rules governing emissions and CAF , corporate average fuel economy. States like California are asking for and receiving federal permission to increase emission rules. This is the wrong moment to saddle the industry with more regulations.
Can these companies really "transform"? Of course they can, but they need to think differently. Arthur Jeff Jarvis has a new book, What Would Google Do? which imagines how google like business principles would help the auto industry. Other companies and other industries have transformed themselves. Steel did it. Airlines did it. GM can do it. It will be very tough, but it's worth it. It will save many jobs; it will save General Motors, and it will create jobs for generations to come. Now, that's a legacy.
Merrie Spaeth is a communications consultant based in Dallas.
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