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Fellow GM aficionados,

There does seem to be a lot of GM bashing going on, nowadays. Many of the arguments are well founded. I'm currently taking a course in Cornell's Johnson Graduate School of Management called the Semester in Manufacturing. (SIM) It is the only course I'm taking this semester (a 15 credit hour "immersion" course) and I have the great fortune of having several GM sponsored classmates, several ex-GM managers and one professor who all have worked for GM. I've had the opportunity to visit GM's Tonawanda Power Train Assembly Plant in NY and a Ford Truck Assembly plant in Norfolk, Va. One recurring theme is evident from all of this exposure to GM affiliates, operations and their main competitors. GM still has not made the major strategic changes necessary to grow in today's business environment.
Three arguments support this thesis.
1) GM is the most vertically integrated of the big 3. Therefore, when many manufacturers are spinning off businesses that are not considered their core competencies, GM is still weighted down by its own inertia and immensity. They are currently taking action to spinoff many of their businesses which we have seen recently. Delphi is probably the next spinoff in the pipe and their employees can't wait. They feel like they have been smothered for too long under GM's bureaucracy and once freed, will gain tremendous flexibility and increases in productivity.

2) Of the big 3, GM has the poorest relations with the UAW. The difference in employee morale between Ford's Va plant and GM's NY plant was almost sickening. Ford's union leadership actually trusted the management and both groups worked together toward the long term interests of the stakeholder's. GM's atmosphere, on the other hand, was frightening. The management was truly concerned about being able to institute a new team based line into the plant because of perceived animosity from the workforce and union. The union-management relationship was shaky, at best, and seemed to lack the fundamental element of trust.

3) GM's marketing efforts are truly abysmal. Someone on this board made the comment earlier that a whole generation of young people will not even consider a brand name like Chevrolet. A manager for GM in my class that works in the Cadillac division claimed that her market segment had a far worse problem; their customer base will die off within the next 10-15 years. This is a fundamental strategic problem that GM must resolve in order to stay competitive. At one point in history well over 50% of the US market belonged to GM brands. In the 60's the slide began, and it doesn't look like it's going to stop anytime soon. Saturn was an effort to compete against the Japanese small fuel efficient cars. Younger people were definitely targeted and now, even that division has been suffering. GM needs to get some marketing savvy and fix this issue fast. (Speed and flexibility are things that are difficult to comprehend in GM, so I'm told.)

**On the bright side: Every manager that I have met that works for GM has been bright and energetic. GM has a serious education intiative for its people and has a tremendous amount of talent. If they can shed their other businesses to get back to what they do best, they will be in a much better environment to compete. They have to resolve some serious issues with their labor force, so that they can make the long-term capital investments necessary to keep up with Ford. They also need to recruit some talent in their marketing function, if they don't have it already.

I own GM stock and the near term seems to be stable. In an economic downturn though, things could get very bad for the nation's largest manufacturer. Let's hope the dedicated people in this great company can engineer a turn around. :-)

Steve
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