Friday, December 5, 2008

Being General Motors III

Rick Wagoner, and his Big Three counterparts, drove to Washington in hybrid cars yesterday and much attention was paid to their arrival. (We all know what happened a few weeks ago when they arrived in Washington, all three, in their respective private jets.) Will this gesture make a difference? It may soften the public outrage, but will it change how business is done daily?

While I thought that these executives should have considered public image in their Washington arrival, I was more concerned with what would be done in moving forward. Perhaps the executives who have had a hand in the mismanagement of their businesses should be released. But to consider and expect that these executives or any executive of a major company or organization of any kind, including the archbishop and mega pastor, will fly commercial after the single gesture is not likely.

Gestures matter, but ongoing ways of doing things far more.


Bob Foster said...

Hello, Judith,

The big three arriving in their private jets was simply stupid--appearing in front of a congressional committee without a turnaround plan was insane. If these are the leaders of the U.S. industrial complex, we are in deep trouble.

One thing I have not seen much mention of, is the role that the various Boards of Directors have played over the past decade. They are the ones who hire the corporate heads and are supposed to hold them accountable for their performance. What have they been doing?

If it wasn't for the damage it would do to all the working people, I would like to see them all hung out to dry.

Bob Foster

judith ellis said...

Hi Bob - I completely understand your sentiment about hanging the executives out to dry. It is quite apparent that there has been mismanagment. (Mulally of Ford, however, seems to be in the best position with regards to management. Ford does not need money. Their need seems based on the possible collapse of the other two.) There was some push by Congress and President-Elect Obama to release the current management. Let's see what happens.

You are also right to bring up the fact that there has been little talk about the role of the board of executives. According to the GM website it seems that the board has also been negligent in their duties. Here is there role:

"The General Motors Board of Directors represents the owners' interest in perpetuating a successful business, including optimizing long-term financial returns. The Board is responsible for determining that the Corporation is managed in such a way to ensure this result while adhering to the laws of the jurisdictions within which it operates and observing high ethical standards. This is an active, not a passive, responsibility. The Board has the responsibility to ensure that in good times, as well as difficult ones, management is capably executing its responsibilities. The Board's responsibility is to regularly monitor the effectiveness of management policies and decisions including the execution of its strategies.

In addition to fulfilling its obligations for increased stockholder value, the Board has responsibility to GM's customers, employees, suppliers and to the communities where it operates -- all of whom are essential to a successful business. All of these responsibilities, however, are founded upon the successful perpetuation of the business."

Perhaps the board members should be replaced too if taxpayer dollars are given; they most certainly have been derelict in their duties.

Thanks for dropping through. Do come again.