A month or so ago (June 5, 2008), I wrote a piece comparing the compensation of the executives at GM vs. their counterparts at Toyota. I think the overall conclusion was that by a wide margin, GM won (perhaps the only metric in which it beats Toyota these days). I would be remiss not to include a link to a powerful piece written by the Dean of the Peter F. Drucker and Masatoshi Ito Graduate School of Management, Mr. Ira Jackson, about Toyota applying Peter Drucker’s principles in its management (Drucker Difference).
Given the difference in corporate culture, the countries from which they operate, the baseline infrastructure, etc., it is probably difficult to generalize whether the performance gap comes from the quality of management. However, when rumor floats that GM may have to file for bankruptcy, it is time to look carefully into the words of its leaders. And perhaps it is here, that we find the greatest failure.
Richard Waggoner, when questioned about the possibility of a GM bankruptcy, gave the legal answer.
“Under any scenario we can imagine ... our cash position will remain robust through this year.” (MSNBC)
Perhaps the statement is true. But then, that is not very inspiring from the leader of what was once the biggest company of the world.
He didn’t talk about new cars, investing in hybrids, trimming costs, global strategy, making more fuel efficient vehicles, or even giving back his salary. He said basically that we ain’t going broke cuz we got lots of cash.
Some time ago, an article in Time (I think) called the automotive industry as a bunch of “health care companies that also make cars,” referring to their extra-ordinary liability in health care costs for former, current, and future workers. Nothing from the CEO about that either.
And this is what Mr. Wagoner had to say about the rising fuel costs:
“We missed that, but I think us and 99.999 percent of the rest of the people in the world did too.”
Maybe the GM Board should pay him like 99.999 percent of the rest of the people in the world. Maybe then he would trade in his Hummer for a more fuel efficient soon-to-be American vehicle, the Toyota Prius.(MSNBC)