Car Guys vs. Bean Counters - Bob Lutz [28]
Eventually, Bob Stempel came in and sat at the head of the long table with me at his left elbow. He greeted the Chrysler supplicants with the “we all know why we’re here” speech and emphasized the need for a decision. There followed a procession of GM planners, each approaching Stempel and showing him the data in “their” book, each taking care to hold the cover in such a way that I could not possibly peek in. Book after book was viewed by Stempel, with the owner rewarded with grunts and nods of approval.
After an hour, Stempel turned to me and said, “Bob, I know I promised you a decision coming out of this meeting. I’m afraid I can’t deliver. There are some delicate aspects here that require more discussion among ourselves. But I promise you a decision in forty-eight hours. And I intend to keep my commitment.” My Chrysler colleague and I left and congratulated each other in the elevator. Forty-eight hours was a victory!
“See, when you have a problem like that, come and see me,” I boasted. “I don’t mind calling the top guys, and that’s the way to get action out of a place like GM.”
Three weeks later, we had no decision, and Bob Stempel wasn’t returning my calls. (We ultimately did sell GM the “D-Spec” manual transmission.)
At about this time, during my tenure as president of Chrysler, I liked to invite one supplier each week to a private lunch in our lavish, Iacocca-instigated Italian-style dining room. The meetings were usually frank, no-holds-barred, because I was anxious to improve the notoriously rocky OEM-supplier relationship and, for Chrysler anyway, transform it into more of a partnership working for mutual success. I usually asked, “Which auto company do you prefer to supply, and why?” The depressingly familiar answers were nearly always Toyota and Honda, but Ford and especially Chrysler were improving rapidly. GM was always the pathetic caboose in the rankings.
Then, one day, a supplier of bearings surprised me by answering, “My favorite customer is GM!” Whoa! “Why on earth is that?” I inquired.The supplier replied, “Because they’re so monumentally screwed up that we can sell them the identical bearing in seven different boxes, with seven different part numbers, and seven wildly different prices. Their purchasing groups are only dimly aware of one another’s existence. It’s a bit hard to keep it all straight, but boy, is it lucrative!”
Well, there you have exactly the wrong way to be the favorite customer of a major supplier. Much of the overspending and overorganization was later tackled once Jack Smith became president in 1992. He reduced bloated senior executive ranks, closed plants, shifted the manufacturing and supplier “footprint” out of the high-cost United States and into (then) lower cost Canada and Mexico. Given GM’s enormous size, organizational complexity, the vigorous defense waged by its time-honored fiefdoms, and its many powerful and influential believers in the status quo, the task accomplished by Jack Smith, Rick Wagoner, and their team should not be lightly dismissed. It was, as they say, hard slogging.
And some initiatives were brilliant: the early foray into China in the early 1990s, well before the potential of the country became obvious, was a masterstroke of long-range planning and acceptance of intelligent economic risk. Opting for Buick as the initial brand seemed odd to most outside observers: why place a huge bet on a traditional, U.S.-size, near-luxury car in a country where most of the population rides bicycles? But it actually made perfect sense; most of the production of the early years was absorbed by government officials at the central, provincial, city, and rural levels, and by corporate executives. In China, Buick was a revered brand; people still remembered the pre-Communist era, when most Western business leaders and traders, as well as the last emperor