If I Were the New CEO of General Motors
With Rick Wagoner stepping down as the CEO of General Motors this weekend and Fritz Henderson taking his place, I couldn’t help but think about what I would do if I were in Henderson’s place. President Obama is looking for a restructuring plan that will assure the longevity of the company. Here is a look at the approach that I would take to reinvent General Motors into true trend setting, profitable company.
Find Brightest Automotive Engineers in America
General Motors makes a big show about their work with green automotive technologies. However, the results have not supported their hype, by many accounts they are a full generation behind Toyota. The technology and engineering at General Motors is so far behind the industry standards they can no longer go the road alone. My first order of business as CEO would be to correct this situation by pursuing a partnership with Tesla Motors.
Tesla Motors is making the auto giants look foolish with their all electric Tesla Roadster and plans for the Model S set to release in 2011. The Roadster is not your typical weak electric car, but a powerful vehicle that also looks spectacular. A partnership to produce and develop a joint line of cars would be extremely beneficial to both parties. It would be a huge step in advancing the GM technology, and help Tesla increase production of cars that are already in high demand.
Major Restructuring of Production
Over the past couple of days there has been a lot of talk about General Motors slashing all lines that are not making the company any money. Unfortunately there has been very little discussion about restructuring or replacing these lines with vehicles that are making money or have more potential to make money. Every action to cease production should be accompanied with a plan to develop the infrastructure necessary to produce better vehicles in the future.
As an example, one of the very first lines that should be cut is most certainly the Hummer line. It is the most controversial and unpopular vehicle in the entire GM portfolio. Even Arnold Schwarzenegger, the first individual to purchase a Hummer has condemned the line. This discontinuation should be directly linked to the start in production of a true green vehicle such as car that runs on hydrogen fuel. The old Hummer factories should be equipped to build the hydrogen model. The entire budget that was used for development, marketing, and production of Hummer should be reallocated directly to fund this new line.
Genuine Plan to Produce Revolutionary Vehicles
One of the things that has infuriated me about General Motors over the past couple of years, has been their green campaign highlighting all of the developments they are making in alternative and fuel efficient vehicles. I first noticed that there is a huge gap between what GM claims for green vehicles and what is actually produced when they started advertising E85 ethanol fueled SUVs. In New England (where I was watching the ads), it was nearly impossible to actually find these SUVs at dealerships. Even if you managed to drive one up, there was only one gas station in New England that even sold E85 (maybe two if you count the half of Connecticut that roots for the Yankees).
Next year Chevy will roll out the Volt, which is being marketed as if it were an all electric vehicle. It is in fact a hybrid, although it does rely more on the battery than most existing hybrids on the market today. The part that really irks me is that they don’t plan to produce enough of these Volts to have a significant impact on the company’s overall fleet emissions average. To top it off, they don’t ever foresee turning a profit with car!
This sends the message that work on fuel efficient vehicles has been done simply as a publicity stunt, and GM never intended them as the future of the company. This attitude would not be tolerated under my command. In depth planning to ensure that General Motors leads the auto industry in new innovative technology would be a priority. This means working with companies outside of GM to pursue alternative fuel source technology. Dealing with fuel distributors to setup infrastructure throughout the country to enable the sales of our vehicles. Finally, equipping factories to produce the revolutionary vehicles that will lead the auto industry.
Fritz Henderson has two months to develop a restructuring plan for Barack Obama. Hopefully he will address many of the issues that I have noticed as an outsider looking in, and bring real and specific solutions to the table. The other hope is that Henderson finds a way to keep and create as many jobs as possible. A little bit of optimism on an economic turnaround will go a long way in justifying the jobs of many Americans.
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What about Fuel Cell Vehicles? Where do they stand in Chevy’s long term plan.
Again their current fuel cell technology (hydrogen) seems like it is only being used as a publicity stunt. They have given a couple people in major cities prototype fuel celled vehicles (they call it a fleet) to drive around, but the cars are not available for purchase, and there seems to be no definitive plan to roll them out for sale.
http://www.chevrolet.com/fuelcell/