Friday, November 7, 2008

Being General Motors

Listening to a clip of Rick Wagoner, the CEO of General Motors, explain that the fate of Lehman Brother cannot be that of General Motors, I thought of the possibility of further job losses in my state and throughout the country. Wagoner insists that GM cannot share the fate of Lehman Brothers and a financial rescue package is necessary. Not too many would disagree that GM cannot fail; a failure would be far too systemic.

Being from Michigan and seeing the effects of plant closings and the impact on many other ancillary businesses, including suppliers of all kind, it seems critical that General Motors can't fail. It seems surreal that we are talking about the possible failure of GM. Such a failure would be both immensely systemic and emotionally devastating. The latter cannot be understated.

General Motors can't fail. But in thinking about a financial rescue package, how are we assured that the rescue will be used properly? (Banks were given a bailout which was suppose to stimulate the economy and they're not lending.) How are we assured that more jobs will be created here in the US to include perhaps green initiatives? How are we assured that there will be productive engineering and not merely the financial kind. For example, Cerberus Capital Management's buyout of Chrysler may indicate more of the latter. This firm also owns 49 percent of GMAC, GM's financial arm.

In considerations of a financial rescue package, how are are we assured that management and production will run more effectively, even more so in booming times as preparation for leaner ones? How do we know that this is not a Band-Aid? How are we assured that there will not be one bailout after another? How are we assured that the massive red tape that goes into production will be replaced with a better streamlined system?

I don't have the answers but I have plenty of questions. Any insight?

4 comments:

David Porter said...

These managers are burning through $7 billion a quarter. There is no reason to believe that the behavior will change post-bailout. Waggoner and his minions should be summarily terminated without golden parachutes for gross negligence. Their arrogance and failure of imagination combined with greed (SUV's or die) have led them to this point. Agreed that they are too big to fail but are not too big to bring in real leaders. We actually exist.

judith ellis said...

Thank you for popping in David and for your perspective. I would tend to agree. But what will be done about the great forthcoming systemic losses? Can management, for example, be changed and those parachutes not given?

The government, if I'm not mistaken, has already required a re-tooling effort. If small businesses ran our business the way many large companies are running theirs, we would have been out of business a long time ago. Many zeros must add immense challenges, eh?

There does seem to be gross negligence involved. Like an AIG, GM has became so big and systemic that it seems unlikely that we will let them fail. This was essentially Mr. Wagoner's argument.

David Porter said...

I have worked for $14M companies, $12 billion companies and now for a $1.7B company. In my view, values-based leadership is absolutely scalable. It is a matter of choice in how we wish to lead and in determining what is important to us in making fact-based decisions, having the managerial courage to make them and to live with the consequences. Attention to people, process and technology are necessary in organizations of all size. Surely the Obama campaign is a great example of loose-tight principles that allowed the potential energy of millions of people, many of them previously disenfranchised, to come together and make a miracle happen. Obama's campaign had many more "employees" than GM or AIG. The difference, perhaps, was a focus on something much greater than any of them - a purpose and a calling that was worth fighting for. What did the people at GM and AIG have that was/is worth fighting for beyond employment?

judith ellis said...

David - What thoughtful words, spoken with such clarity and beauty. Thank you sincerely.

I have not worked directly as you have for such companies, save as a facilitator. But I did have the sneaky suspicion that scalability was indeed possible. I suspected that zeros did not matter much. Process and purpose seem more essential.

The Obama campaign comparison is indeed a great one, as well as the necessity to work for something that is far greater than yourself. During lean times employeers cut training, but it seems that raised consciousness is forever needed, ESPECIALLY in difficult times.

I must say, however, that nothing compares to the work of managers and employees who daily insist from each other the highest professional and ethical standards. An environment of "controlled" creativity might also be essential.

Also, it would seem to me that no matter what you do for employment, it is HOW you do WHAT you do WHEN you do it that makes the difference. I love your question regarding the employees of GM and AIG. This is a most beautiful question.

What I have worth fighting for beyond employment is a question that I forever ask myself. Life is greater than the totality of one. It is the beauty of the whole. Why not make it better for others around us and for those who will come after us?

Thanks again.