Ok heres a different alternate history question for ya. Seeing how bad General motors is doing in market share atm. How would you turn them around to be a healthy company?, on the par with toyota, without a huge debt and the UAW/Healthcosts on its back. Say starting with a POD of the 1970's oil crisis?
General Motors Alternate History
- Thread starter Odin
- Start date
Legacy costs aren't going to go away unless they declare bankruptcy or the USA implements single-payer, federally funded healthcare, so their labor costs will be higher than say, Toyota or Hyundai. That being said, Mercedes and BMW in Europe don't exactly have low labor costs either, so one possible decision is to follow the Germans and move upmarket in search of higher profit margins, leaving the bottom end to the Japanese and (later) Koreans. Unfortunately GM management took the opposite direction and cut costs relentlessly, and since labor costs were hard to cut, it was the materials, workmanship, reliability and engineering that suffered, and their market share suffered along with it. A Cadillac DeVille from 1967 feels far more upmarket than its 1987 counterpart filled with chintzy plastic and fakewood. IMHO Toyota in the mid-2000s were heading the same way, with an entire decade of declining materials and build quality behind them, but management was apparently smarter than 1970s GM, and they've fixed the problems since.
Earlier embrace of fuel-efficiency technologies like fuel injection and 4+ speed automatic transmissions wouldn't have hurt either.
marathag
Banned
Leading up to the Cadillac Cimarron
A rebadged Chevy.
poor performance, cheap looking, but still expensive
GM squandered a massive lead in technology and engineering to all but perhaps the Germans that they had in the 1950s, namely by assuming that they were invincible and that the American market would never change. They needed to burst that mentality in the 1960s. If they do that and continue to advance the science of automotive design, there is no reason why they couldn't do far better than IOTL.
The American car companies learned after the great recession that you have to move upmarket to maintain your profits. Maybe butterfly away the SUV boom so that GM faces it's problems sooner.
Edit:
I think GM is generally a par with Toyota today and may have a better future due to greater share of emerging markets.
Orville_third
Banned
A few ideas:
-Keep the diversification. Frigidaire and Hughes and Electro-Motive could have the potential to be moneymakers.
-Keep Saturn and spread what they learned.
-Don't get GMAC into the subprime market.
-Keep the diversification. Frigidaire and Hughes and Electro-Motive could have the potential to be moneymakers.
-Keep Saturn and spread what they learned.
-Don't get GMAC into the subprime market.
Driftless
Donor
Just going by first glance, which is the Cadillac, which one is the Dodge cheapo K-car?
Upstarts often have inherent advantages though. They are not burdened by history via employees, customers, investors, suppliers, or hubris. This is true in many, if not all industries. So, GM maintaining their lead is a low probability outcome.
Further, it wasnt just technology that hurt them. The Japanese developed higher quality products through superior manufacturing practices via Deming. In addition, with the higher quality autos (or at least more reliable), they went after the lower cost segments and built up their market share from the bottom up. Given many of the lower cost car buyers are/were young buyers, they didnt have to change customer attitudes and they acquired a customer for life.
If anyone is interested in learning more at a non-auto specific level, read Innovator's Dilemma by Clayton Christensen. You will immediately see why GM was in such trouble.
The question is how can you drive your costs down to maintain market share, did GM have JIT systems in place during the 1970s? Was it possible to expand the volume of cars being made to facilitate lower costs per unit, which are passed on to consumers and to then export the surplus? Instead of the Toyota way we could be referring to the GM way.
The overall change that is needed, from my reading of the situation, would be for a dramatic organisational cultural shift, which I'm not sure can happen.
JIT didnt really come into place until the 1980s and the Japanese were way ahead of GM. Inventory holding costs were, and probably still are, a significant problem for GM. I dont think the Americans could ever drive their costs down to where the Japanese were. Deming helped them get way, way ahead in that until the 80s. Their manufacturing methods were so superior and so much more cost efficient. But you couldnt convince American management to change their ways. And then once they saw what was going on, they had to convince the unions, who they had long since poisoned relations. Its a lot of obstacles to overcome.
When my dads says when GM should be stable and growing and says that light truck and heavy truck division and 3 luxury brands and conglomerate brand (like Mercedes-Benz) and etc.
I agree with everything you said but the Toyota. Any company that ha to recall more cars then they built in a year is not doing well.
GM put out good quality cars until the late 60's early 70's. Then they got whammed by pollution control they were at the end of the road of being able to add equipment to the existing engines. Pollution control added a lot of complexity to the engine and made them use more fuel and lowered the HP. Then came the oil embargo up until then gas mileage was not very important you could find a car with decent mileage. Gas in the 60's was as low as 19 cents a US gallon. 35 cents was in the ball park before the embargo 69-70 cents after it. It wasn't the price but the shortages in areas of the US of Gas. Boston really got screwed. So the auto makers just redid the engines and while cleaner used more fuel. As they are trying to get better mileage safety features are being phased in which was fought tooth and nail by Detroit but they lost finale. At that time the safest cars were the heaviest cars. Some of the weight they removed affected the ability to meet the safety standards. The auto makers still considered small cars as a temporary issue except for Lee Iacoca. To cut costs, remember inflation was high also. When the Government set the first fuel standards the Auto Makers said by 1980 no car bigger then a Chevy nova will be built. For younger or are not from country it is between a Ford Fusion and Taurus in size then. It was all bs creative company of Ford manged to get the Crown Victoria declared an import. It is the best example of the big American Cars ever made. The unions and Management didn't help either. To end this I am not against any of the issues I mentioned pollution, better gas mileage, safety ect. The next time any one wants to bitch about California remember they started auto emission control in 1966 which spurred Congress to require them on all cars. CA was and is 2 steps ahead of the Feds. The same with other environmental solutions.