Sorry , i didnt know there was a size limit.
Well, one day I asked the vice president of Buick, you remember, Ed
Mertz, if he could walk in 60 days before Job 1 and strip chrome off his
car. That was in the day of The 4 Phase System of new car development.
You
remember the 4 Phase system; it started at Phase Zero and ended at Phase
3.
I want you to know I never thought much of a company with a 4 Phase
System
that starts at Zero and goes to 3. Anyway, I told Mertz the Knudsen
story
and asked if he could go into design 60 days before Job 1 and strip off
chrome.
He said, "Sixty days before job 1? Hell, that's Phase 5."
Gentlemen, I have not found one man in GM who could by himself order
a
piece of chrome stripped off a car. Your management has created a
system
without power or responsibility, or with power and responsibility so
diffused that it takes forever to get anything at all done. Even the
VLE
have to hold meetings to strip off a piece of chrome.
You could say your CEO has power, but he says he doesn't know
anything
about design or engineering or marketing so why would he do anything.
Look, the division chiefs are nothing anymore. They aren't vice
presidents; they have no power over quality even. A division like
Cadillac
has about 50 people on the payroll. They probably will be eliminated in
time
and the division chief, too.
The brand-marketing boss is supposed to have power, but as far as I can
he
or she has power over the advertising. The VLE is supposed to be the
boss,
but they aren't vice presidents, and they report to manufacturing and
manufacturing never wants to change anything.
As far as I could tell, the most powerful car guy was Don Hackworth, but
he's gotten his head chopped off.
And there seems to be no penalty for failure. Has anyone been fired
for
that Saturn disaster? I figure the worst launch on top of the worst
platform decision, which was, by the way, forced not by Saturn people
but by
top management of GM. Have they shaken up design for those boring
products?
Have they changed the brand management for the market share loss? Did
they
ever fire anybody for lousy advertising? There is no penalty for
failure.
How can anyone who knows something about the American car business,
about
cars, get to the top, or even the #2 position, of GM. I don't see the
pathway up. Engineers don't count for anything anymore in this company
as
far as I can tell. You know, even Fred Donner, the ultimate financial
man
at GM, who set up the last management system about 40 years ago, felt
that
while there should be a financial man on top, the #2 should know
something
about cars. Not today.
I recall John Rock, then a vice president of Oldsmobile, said to me,
"This system won't work, but it will take them 10 years to find out."
Your board of directors. I believe there is only one person on the
entire board who likes cars, and it's not Jack Smith, the chairman,
either
The stock price: it is as high as it is because of Hughes, bought by
Roger Smith. Without Hughes I figure GM could be selling at 35. And
you
can thank Carl Icahn, the old raider for pushing it up 12 points by
announcing a raid. Now he's gone. Where will it go?
Enough, end of Part 3
Part 4. What can you do about it?
Well I hope someone made a tape of this speech. If not, I can give
you
a copy of my text. Each one of you should drop a note to each member of
the
board.
You could do it in a round robin, if you wanted. That is, everyone signs
the
same note, in a circle. That's a round robin. No one stands out.
Tell them you don't know if I'm right or wrong but you're worried about
GM.
Urge them to set up a committee of outsiders, men who know the
business,
to study GM and report back with a plan of action in 60 days. Make
suggestions about who should be on this committee.
How about Bill Hoglund, ex GM executive vice president. How about
Roger
Penske, how about Lee Iacocca, or Bill Mitchell or Bob Eaton or Bob Lutz
or
JT Battenberg or Maryanne Keller.
The board must order that all records and minutes be made available
immediately to the committee. They must order that all officers make
cooperation with the committee their first, their first priority.
That's
anyone obstructing, delaying or acting in any way uncooperatively shall
be
suspended by the committee awaiting board action. Who could they hire
if
they went that way? Believe me, there are people out there who could
lead
General Motors back to Glory. And throw another shrimp on the barbie.
That's a hint about one of them.
The committee should have the right to interview people outside of
GM
for positions within the company. The committee members must be paid
terribly well for their work, too. That's because if they do it for
free no
one will respect the report. They only respect what they overpay for.
You can call this "The Committee of Public Safety."
What else can you do? Go to church and pray. Your company is going
down to
25% of the market. That's not terrible. You can make money at 25%, Ford
does. But I don't see leaders coming up the pipeline. All I see is
more
stretch goals.
When you write to your board members, tell them that's you don't
understand how a company that depends on products, has no upward
mobility
for product people. None of the top executives are product people.
Write slogans on walls, too. Victory or Death, Beat Ford, V, Sic Semper
Tyrannis.
That's it.
My last words:
Never Give Up,
Never Surrender,
And don't let them take you alive.
Any comments or questions:
[end]
Well, one day I asked the vice president of Buick, you remember, Ed
Mertz, if he could walk in 60 days before Job 1 and strip chrome off his
car. That was in the day of The 4 Phase System of new car development.
You
remember the 4 Phase system; it started at Phase Zero and ended at Phase
3.
I want you to know I never thought much of a company with a 4 Phase
System
that starts at Zero and goes to 3. Anyway, I told Mertz the Knudsen
story
and asked if he could go into design 60 days before Job 1 and strip off
chrome.
He said, "Sixty days before job 1? Hell, that's Phase 5."
Gentlemen, I have not found one man in GM who could by himself order
a
piece of chrome stripped off a car. Your management has created a
system
without power or responsibility, or with power and responsibility so
diffused that it takes forever to get anything at all done. Even the
VLE
have to hold meetings to strip off a piece of chrome.
You could say your CEO has power, but he says he doesn't know
anything
about design or engineering or marketing so why would he do anything.
Look, the division chiefs are nothing anymore. They aren't vice
presidents; they have no power over quality even. A division like
Cadillac
has about 50 people on the payroll. They probably will be eliminated in
time
and the division chief, too.
The brand-marketing boss is supposed to have power, but as far as I can
he
or she has power over the advertising. The VLE is supposed to be the
boss,
but they aren't vice presidents, and they report to manufacturing and
manufacturing never wants to change anything.
As far as I could tell, the most powerful car guy was Don Hackworth, but
he's gotten his head chopped off.
And there seems to be no penalty for failure. Has anyone been fired
for
that Saturn disaster? I figure the worst launch on top of the worst
platform decision, which was, by the way, forced not by Saturn people
but by
top management of GM. Have they shaken up design for those boring
products?
Have they changed the brand management for the market share loss? Did
they
ever fire anybody for lousy advertising? There is no penalty for
failure.
How can anyone who knows something about the American car business,
about
cars, get to the top, or even the #2 position, of GM. I don't see the
pathway up. Engineers don't count for anything anymore in this company
as
far as I can tell. You know, even Fred Donner, the ultimate financial
man
at GM, who set up the last management system about 40 years ago, felt
that
while there should be a financial man on top, the #2 should know
something
about cars. Not today.
I recall John Rock, then a vice president of Oldsmobile, said to me,
"This system won't work, but it will take them 10 years to find out."
Your board of directors. I believe there is only one person on the
entire board who likes cars, and it's not Jack Smith, the chairman,
either
The stock price: it is as high as it is because of Hughes, bought by
Roger Smith. Without Hughes I figure GM could be selling at 35. And
you
can thank Carl Icahn, the old raider for pushing it up 12 points by
announcing a raid. Now he's gone. Where will it go?
Enough, end of Part 3
Part 4. What can you do about it?
Well I hope someone made a tape of this speech. If not, I can give
you
a copy of my text. Each one of you should drop a note to each member of
the
board.
You could do it in a round robin, if you wanted. That is, everyone signs
the
same note, in a circle. That's a round robin. No one stands out.
Tell them you don't know if I'm right or wrong but you're worried about
GM.
Urge them to set up a committee of outsiders, men who know the
business,
to study GM and report back with a plan of action in 60 days. Make
suggestions about who should be on this committee.
How about Bill Hoglund, ex GM executive vice president. How about
Roger
Penske, how about Lee Iacocca, or Bill Mitchell or Bob Eaton or Bob Lutz
or
JT Battenberg or Maryanne Keller.
The board must order that all records and minutes be made available
immediately to the committee. They must order that all officers make
cooperation with the committee their first, their first priority.
That's
anyone obstructing, delaying or acting in any way uncooperatively shall
be
suspended by the committee awaiting board action. Who could they hire
if
they went that way? Believe me, there are people out there who could
lead
General Motors back to Glory. And throw another shrimp on the barbie.
That's a hint about one of them.
The committee should have the right to interview people outside of
GM
for positions within the company. The committee members must be paid
terribly well for their work, too. That's because if they do it for
free no
one will respect the report. They only respect what they overpay for.
You can call this "The Committee of Public Safety."
What else can you do? Go to church and pray. Your company is going
down to
25% of the market. That's not terrible. You can make money at 25%, Ford
does. But I don't see leaders coming up the pipeline. All I see is
more
stretch goals.
When you write to your board members, tell them that's you don't
understand how a company that depends on products, has no upward
mobility
for product people. None of the top executives are product people.
Write slogans on walls, too. Victory or Death, Beat Ford, V, Sic Semper
Tyrannis.
That's it.
My last words:
Never Give Up,
Never Surrender,
And don't let them take you alive.
Any comments or questions:
[end]