For years, we have heard General Motor’s executives complain of costs. They say the cost of doing business in America is too high. According to corporate administrators, American laborers insist that employers cover health care expenses. Companies must honor pensions awarded in the past, and then there are those wages, oh, those wages. The management has cried out; they cannot continue do business under these circumstances and still make a profit. General Motor’s bosses plead for understanding and ask their workers to sacrifice their wages and benefits. Even when the laborers comply, it is never enough.
Chief executives at General Motors, and in other American companies, ultimately take control. They cut and cut; overhead must go. Production and producers be damned, the bottom line lies with the shareholders. To boost the numbers corporations have reduced the workforce. They have decreased the dollars paid out for health care. They have eliminated many sick days and are unwilling to provide benefits for families. Now, they are “Offering [a] Buyout Deal to More Than 125,000 Workers.” Though not all news reports mention this, if the employees accept the deal they must forego once expected health benefits.
The New York Times article, G.M. to Offer Buyout Deal to More Than 125,000 Workers, seems to paint a rosier scenario than some other media sources. They quote Robert Betts, president of the U.A.W. local at the Delphi plant in Coopersville, Michichan, as saying “the offers were attractive.” Mr. Betts claims, "If someone is going to give you $35,000 to take your pension, that's good," He continued. "I think a whole lot of people are going to hit the road over this."
“Wonderful” said stockholders; shares of G.M. rose shortly after the news was released. Is the action good; or is it only one more blunder in a longstanding series of shortsighted solutions?
Each time General Motors cut jobs; I wonder where will these people go? How will more unemployed workers add to the economy? Great, the company has less mouths-to-feed, and more money to pour into profits. Yet, the powerbrokers seem to forget, now, with all the unemployed, who but the few affluent will have the money to purchase the products?
I have written on this topic before and published my perspective. [See AS GM GOES. CUTS, THE INEFFECTIVE CURE ©]
I have begun many other essays on the topic, and have yet to complete them. The reason being, writing on General Motors, GM President Rick Wagoner, information on corporations managed in a similar vein, and Chief Executives with comparable philosophical leanings is all consuming. The follies of these frightening powers are overwhelming. There is enough material to pen a dissertation, daily.
A "short" chronology of General Motors "Solutions" will appear at the close of this treatise. Many references will be provided.
Big conglomerates, even small organizations, have focused on superficial solutions; they slice and dice. They make excuses; they see expenses and concentrate on these. Corporate America has lost sight of the best ways to create greater income. It is not “innovation”, as they would like us to believe; it is not the quality of the design. It is “people” that make or break a business. How do we treat people, accommodate their needs, serve them, respect them, build for them, and how do we treat them.
Ford pretends to have a “better idea.” They bank on it, and sing the phrase as a slogan. Yet, they too struggle. General Motors wants us to believe “As GM goes, so goes the country.” Therefore, they want us to invest in GM and its products. However, they do not invest in their own workers. Go into any store, enter any organization, travel into any institution and approach the workers as a client or a consumer. Observe how you are treated.
If you are treated well, very well, ask the employee how they feel about their job? Do they feel as though they have power in the decision making process within this corporation? In most cases, the employee’s answer will be yes. Workers that are respected, reciprocally show reverence to their clientele.
If you as a patron are treated with disdain, you might discover that the staff member feels as though they are only a number, dispensable, a person that merely punches a time clock and is largely ignored.
People mirror their environment. If a laborer is treated with veneration, he or she will do their job with similar regard. This is what General Motors and Ford need to know and act upon.
Enough already with the oft stated need for an innovative design! Cars designed, produced, and maintained by laborers that are treated favorably are what we need. These will sell, work well, and hold their value. A solid and serviceable automobile is a commodity of worth. A sleek design may sell initially; however, the customer will not come back, nor will they recommend the vehicle to friends or family, if owning it is an awful experience.
I have discussed Kaizan and the art of sharing the power. Toyota knows; Toyota grows. When will its “big brother,” GM learn? How many jobs will be cut, plants will close, and buyouts will there be?
• White-Collar GM Workers Brace for More Cuts. By Sholnn Freeman. Washington Post Staff Writer, Saturday, March 25, 2006
• GM workers facing 'Black Tuesday'. By Jim Mateja and Rick Popely. Chicago Tribune. March 24, 2006,
• G.M. to Offer Buyout Deal to MoreThan 125,000 Workers, By Micheline Maynard and Jeremy W. Peters. New York Times. March 22, 2006
• Time line of GM and Delphi's travails. Detroit Free PressMarch 23, 2006
• The Tragedy of General Motors, By Carol Loomis. CNNMoney.com. February 6, 2006
• GM's big shakeup, By Chris Isidore, CNN/Money. November 21, 2005
• Ford Cutting up to 30,000 Jobs. 6ABC.com. Dearborn, Michigan. January 23, 2006
• GM to cut 25,000 jobs by '08, CNNMoney.com. By Chris Isidore, CNN/Money. June 7, 2005
• GM plans to cut 25,000 jobs in US, BBC. June 7, 2005
• President of General Motors, Rick Wagoner Salary Statistics. Forbes.com
• GMAC Is a Big Soft Spot
In Global Debt Bubble. By Paul Gallagher. Executive Intelligence Review. March 18, 2005
• GM told: Cut every salary, By Michael Ellis. Free Press, Business. January 11, 2006
• Special report: CEO pay 'business as usual. By Gary Strauss and Barbara Hansen, USA TODAY
• Union Offers Details of Health DealWith G.M.. By Danny Hakim and Jeremy W. Peters. The New York Times
• Rising benefits burden. By Ron Scherer. The Christian Science Monitor. June 09, 2005
• GM, Ford May Post April Sales Decline as Toyota Gains (Update1). Bloomberg.comMay 3, 2005
• Thousands protest at GM job cuts. BBC NewsTuesday, 19 October, 2004
• Day of action against GM job cuts, European Industrial Relations Observatory on-line. October 2004
• End of the road for Olds, By Chris Isidore. CNN/Money. December 12, 2000
• "A provision of the union contract allows GM to cut health benefits”. Quinn Klinefelter. Marketplace: News Archives. June 26, 1998
• HITTING THE BRAKES, Online Newshour. PBS. July 14, 1998
For more information and depth . . .
• CSM Worldwide Predicts Toyota Will Become One of America's Big Three by 2009. InternetAutoGuide.com
• "The Toyota Way: A Sociotechnical Learning Organization in Action". By Professor Jeff Liker
• The Toyota Way By Jeffrey Liker. McGraw Hill, 2003
You may wish to consider an economic perspective on corporate practices. Please visit, the Economist View . . .
Capital Gets the Cookies, Labor Gets the Crumbs, By Mark Thoma, featuring Invest Globally, Stagnate Locally, by Daniel Gross, Economic View, NY Times
Invest Globally, Stagnate Locally pdf format