- Oct 9, 1999
- 72,647
- 27
- 91
http://www.detnews.com/2004/insiders/0403/21/c01-98054.htm
They gathered at DisneyWorld for three days last week ? 2,900 of General Motor Corp.?s top executives from around the world ? to hear their head coach?s speech.
Evoking one of his favorite athletic metaphors, Chairman Rick Wagoner didn?t equivocate: It?s halftime in the high-stakes game to become the world?s dominant automaker, he said, and GM is in danger of losing to Toyota Motor Co.p., the Japanese juggernaut that is making more money and selling more cars and trucks every year, everywhere.
The former Duke University basketball player reviewed the numbers:
GM?s global market share slipped to 14.7 percent last year from 15 percent in 2002, while Toyota?s rose to roughly 11 percent from 10.1 percent in 2001.
In North America, Toyota last year sold more than 2 million cars and trucks for the first time. Its sales in Asia jumped 23.8 percent in one year, and Toyota?s share of the European market has more than doubled over the past five years, while GM?s has stagnated.
GM?s net profits last year totaled $3.8 billion, $1.2 billion of which came from its home market. In its 2003 fiscal year, Toyota earned an eye-popping $8.9 billion, almost all of it coming from American consumers.
There?s more. Barely three months into this year, GM already has issued five recalls covering a total of 7.4 million cars and trucks in the United States, equaling its recall total for all of last year. Toyota, by comparison, has recalled 212,252 vehicles, down 58 percent from last year.
The implications of the recalls for the brand and quality images of GM?s products speak for themselves, just as the comparatively few for Toyota does.
GM outspends Toyota three-to-one on incentives for new cars and trucks sold in the United States. The efficiency of GM?s assembly plants and the quality of its vehicles (as measured by independent surveys) are both improving, but Toyota remains the leader.
Wagoner, who declined to discuss his remarks to GM?s global leadership conference, isn?t making this stuff up just to scare the team. The competitive threat from Toyota, not to mention other rivals, is real, it?s frightening and it?s not going to ease anytime soon.
Toyota is the standard by which Detroit?s automakers now measure themselves, regularly. To those who keep score ? and, believe me, they do in the auto industry ? GM is running behind the global competitor it most wants to emulate.
So are Ford Motor Co. and DaimlerChrysler AG?s Chrysler Group.
Wagoner?s overarching point, of course, is not to call the game before the second half begins, as so many of Detroit?s gleeful critics would love to see. He?s making the case for action. Now.
To help exhort GM executives in Orlando, Wagoner enlisted Jim Collins, author of the best seller ?Good to Great.? By ?confronting the brutal facts,? as Collins recommends, Wagoner wants to motivate executives from Detroit, Zurich and Ruesselsheim, Germany, to Singapore, Shanghai and Sao Paolo.
Denying reality, a GM tradition that Wagoner and his senior executives are trying to end, isn?t an option. The game isn?t over for GM, Ford and Chrysler. But the second half will not be for the meek.
In his pep talk, Wagoner urged his execs to ?commit right here, right now? to confronting the challenges facing GM, according to one participant?s notes of the meeting. Being good isn?t enough.
For a company that has been the world?s No. 1 automaker for 73 years, time is the enemy. Move fast. Do it right the first time. Understand the competition. Consider the enterprise first, the self second.
And put things into perspective, which can be difficult for many toiling in the confined disciplines of a vast corporation. GM?s turnaround over the past decade has been monumental and, to many of its critics, surprising.
The archetypal American conglomerate now runs like a single company, not the collection of fiefdoms it was. Its cars and trucks are better designed and built, delivering improved reliability and higher quality. Some of them are even becoming desirable.
GM is outpacing cross-town rivals in developing markets like China and Russia. Its technological prowess, particularly in engines and transmissions, is an industry benchmark. And the automaker?s relationship with the United Auto Workers is stronger and more cooperative than anytime in decades.
To coin the phrase of Collins, GM is a good company. But it?s not yet great, either, for only great ones will dominate the 21st-century auto industry while the rest limp along behind.
All Wagoner?s team has to do is execute, around the world, or the game will end with his warning proven sadly prophetic.