Tuesday, June 9, 2009

Speaking of GM...

In the argument over who ruined GM, and whether it can be saved, I tend to view management as the key. Stuck in my mind I have a TV documentary I saw a long time ago. I don't remember who the executive was, or which company he worked for, but I remember his words. "The trouble with small cars is that you take out value faster than you take out cost." There you have it: a management philosophy that claims that to make a car smaller and more efficient, you have to "take out value." The opposite of the Toyota/Honda philosophy of putting as much value as possible into efficient cars. No wonder car buyers passed up Detroit offerings that screamed "CHEAP" and instead paid premium prices for Accords and Corollas.

Yes, Americans have a century-long love affair with the big, powerful, luxurious land yachts of the sort made by the Detroit Three. We also have a love affair with trains like the Century Limited and the Phoebe Snow, planes like the Lockheed Constellation and the DC-3, and luxury ocean liners like the Queen Elizabeth and the Titanic. You can still rent a horse-drawn carriage for an hour and take a romantic ride around downtown GR. But that doesn't mean that we prefer them to modern, efficient transportation for everyday use. When Detroit learns that, they'll be OK.

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