A Radical Fix for General Motors

Interesting article. Very similar to some of the ideas thrown around this forum:

http://www.businessweek.com/managing/content/dec2008/ca2008122_788350.htm

In a nutshell:
Split the company in two: Hive off Chevy, Buick, and Cadillac, and then liquidate the rest, including the lumbering, old high-cost setup

Radical Proposal
Here's my radical proposal for a heart transplant to save General Motors:

1. Divide GM into two companies, the first composed of Chevrolet (including trucks), Buick, and Cadillac.

2. Install new management and a new board of directors, move the headquarters to a new location, and create an empowering culture for all employees.

3. Negotiate new employee agreements with wages and benefits competitive to those of foreign producers' U.S. factories (around $44 per hour, not GM's current level of $73), including health plans and pensions comparable to its foreign competitors.

4. Retain only GM's most productive American and foreign factories—those that operate at greater than 80% of capacity.

5. Embark on an aggressive new-product development program to make its autos fully competitive in engineering, features, and styling within five years.

6. Commit to a fleet average of 40 mpg by 2015 and 50 mpg by 2020, competitive with European standards, with a mix of hybrids, electric cars, lighter vehicles, and efficiency improvements.

7. Re-charter the dealer network for these three brands with fewer, healthier dealers.

8. Establish a viable capital structure enabling this company to operate with sound cash balances and a reasonable debt-to-equity structure.


But is it viable?

Interesting article. Very similar to some of the ideas thrown around this forum:

http://www.businessweek.com/managing/content/dec2008/ca2008122_788350.htm

In a nutshell:



But is it viable?

Fleet average of 40 mpg by 2015? Absolutely not. And to embark on aggressive engineering... with what money, if it may not be around come March 2009?

Sounds like a list of what someone would like to see, without delving into how to get it done and whether it's viable.

What would the 2nd GM company be?

Sounds like a list of what someone would like to see, without delving into how to get it done and whether it's viable.Agreed. What amazes me is that guys like this get press, and we have folks around here that actually are more articulate and better informed on what is actually viable. :p

What would the 2nd GM company be?It doesn't matter, because it would be liquidated. He's proposing it as a holding place for all the rotten pieces of GM that aren't worth saving. :p

It doesn't matter, because it would be liquidated. He's proposing it as a holding place for all the rotten pieces of GM that aren't worth saving. :p

Oh you mean that's NOT how people feel about the whole company? Coulda fooled me...

$75 an hour is hogwash. That figure came from mgmt, who added wages,benefits, and health benefits and retirements pay, dicvided by ONLY the people worklng,. Not a valid figure, but it has cauht fire in the infndignation about the bailouts. 5% of the bank bailouts (to the poeple who ran this country into the ground) woudl cover the auto industry fine.