Former GM CEO Fritz Henderson gets the axe from GM in December, 2009 and immediately started consulting GM as an outsider. In September, 2010 he finally quits the consultancy. The consultancy where he was paid $59,000 PER MONTH to work for 5 HOURS per week. Here's the story. http://bit.ly/bz785q
I am a native Michigander and it pains me every time I saw/see another automotive company fold or layoff 30% of its employees. After I left the U.S. in 2007, my own plant was closed down and most of the people with whom I worked were laid off. This pattern has been repeated countless times over the past years.
To me, this topic is the perfect example of what is wrong with Detroit and this industry (it's just too easy to blame GM). How can this guy sleep at night with Michigan and Detroit's unemployment rates leading the nation due to, in part, the profound and undeniable incompetence by the leaders of his industry over the past, oh, 30 years or so? Tens of thousands of people were laid off, had their retirements destroyed, and generally lost their livelihoods in Michigan and this guy gets fired and then makes more money in a month than many people make in a year. For doing 5 HOURS OF WORK PER WEEK. That's one hour per day. ONE HOUR PER DAY. $2,950 PER HOUR. What kind of "work" can this guy do for one hour per day? And consulting? Consulting for what? How to fail as a car company? (Yes, he was CEO for only a short time but he was CFO for 3 years before that and in various positions since 1984).
Not only was this whole fiasco disappointing and just sick, it all took place during the time of Government Motors with the, at least implicit, approval of the Obama administration.
If you want to know what has been wrong, and what is still wrong, with this industry look no further than this. Folks, we have a long way to go before American automotive can be taken seriously again.
Thursday, October 7, 2010
Sunday, October 3, 2010
Volkswagen: two steps forward, one step back
See this article from the "Hindustan Times" on October 4. http://bit.ly/9K2S5y
I think that Volkswagen is probably the most shrewd of the automakers right now, in their pursuit to beat Toyota as the biggest in the world. Not only are they holding their position in Europe and China, they are now teamed up with Suzuki and Maruti Suzuki to dramatically increase their position in India. Maruti already commands around half of the market there and even though they face tough competition they are backed by Suzuki which is a small-car specialist in Japan and around the world (their well-regarded recent U.S. mid-size Kizashi notwithstanding). Tough market small-car leader (Suzuki in Japan) owns tough market small-car leader (Maruti in India) and now with the engineering and production horsepower of Volkswagen, looks to be the best example of a three-way win in the automotive world. I think that the possibilities of VW and Maruti in India, and VW and Suzuki everywhere else, will surpass the last great, successful union of Renault-Nissan. Certainly they will do better than Fiat-Chrysler (the great unknown), the current Renault-Nissan (middling), and the handful of Chinese partnerships (which VW already commands a strong position with its current Chinese JVs).
VW's heady pursuit of Toyota is reminiscent of Toyota's pursuit of GM only a few years ago. Toyota passed GM in 2007 but it was a Pyrrhic victory as the Recession and a spate of quality problems caused them to stumble immediately afterward. They're destructive "crush" on Porsche and slinking after Alfa is surprising for a company which seems to otherwise "get it". Not to mention that VW is rather weak in the U.S. The recent "cost optimized" 2011 Jetta runs the risk of turning off those Americans who want German engineering and performance on-the-cheap (but not too cheap). They have invested in a new plant in TN to make a new, American version of the Passat (or something) but they need to be careful to not lose their identity in the critical North American market (e.g. what is the "CC" anyway?). The only way they can pass the newly dusted-off Toyota is to increase their U.S. position. India will certainly help, but they would do well to find such a "wow" opportunity in the U.S. as well. Can they do that? We'll see.
I think that Volkswagen is probably the most shrewd of the automakers right now, in their pursuit to beat Toyota as the biggest in the world. Not only are they holding their position in Europe and China, they are now teamed up with Suzuki and Maruti Suzuki to dramatically increase their position in India. Maruti already commands around half of the market there and even though they face tough competition they are backed by Suzuki which is a small-car specialist in Japan and around the world (their well-regarded recent U.S. mid-size Kizashi notwithstanding). Tough market small-car leader (Suzuki in Japan) owns tough market small-car leader (Maruti in India) and now with the engineering and production horsepower of Volkswagen, looks to be the best example of a three-way win in the automotive world. I think that the possibilities of VW and Maruti in India, and VW and Suzuki everywhere else, will surpass the last great, successful union of Renault-Nissan. Certainly they will do better than Fiat-Chrysler (the great unknown), the current Renault-Nissan (middling), and the handful of Chinese partnerships (which VW already commands a strong position with its current Chinese JVs).
VW's heady pursuit of Toyota is reminiscent of Toyota's pursuit of GM only a few years ago. Toyota passed GM in 2007 but it was a Pyrrhic victory as the Recession and a spate of quality problems caused them to stumble immediately afterward. They're destructive "crush" on Porsche and slinking after Alfa is surprising for a company which seems to otherwise "get it". Not to mention that VW is rather weak in the U.S. The recent "cost optimized" 2011 Jetta runs the risk of turning off those Americans who want German engineering and performance on-the-cheap (but not too cheap). They have invested in a new plant in TN to make a new, American version of the Passat (or something) but they need to be careful to not lose their identity in the critical North American market (e.g. what is the "CC" anyway?). The only way they can pass the newly dusted-off Toyota is to increase their U.S. position. India will certainly help, but they would do well to find such a "wow" opportunity in the U.S. as well. Can they do that? We'll see.
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