Using S.M.A.R.T. to Save GM    

 Once the US auto industry led the world, but for the last 30-40 years their dominance has steadily declined.   One major factor in this decline is that foreign auto makers have become very good at designing autos that appeal to the American consumer while providing excellent quality at commensurate prices. Unfortunately, another important factor for the decline of the US auto industry is complacence and an ethnocentric attitude. The company and all Americans just never imagined that manufacturers other than GM, Ford, and Chrysler would be automobiles of choice for the US market.

 Japan and Germany rebuilt theirs societies and manufacturing base after being decimated in World War II, and now Japan and Toyota are frequently mentioned as the leading automobile supplier in the US. Germany leads in the luxury car market. With support from their government, Korea has built itself into a major player with Hyundai and Kia leading the way. Other countries like Sweden with Volvo and Saab have also made inroads into the US market.

 When the bottom fell out of the economy due to the financial crisis, the situation that faced some major US auto companies became grave. Fearing the loss of not only tens of thousands autoworkers jobs but the millions of job that would be lost due to issues with the suppliers and dealers of the auto manufacturers, the government stepped in and supported Chrysler and purchased controlling interest in General Motors.  Ford somehow had foreseen and/or planned for such an event a year before and had refinanced the company. Ford declined the offer of bailout money offered by the government, not wanting to place the control of the company in government hands.

 We know after Japan recovered from the war they had their eyes on our auto market and that competition from Japan, Germany and other nations was a major factor in the decline of GM, Ford and Chrysler. However, many believe that much of the decline of US automakers were self-made. I have already mentioned their ethnocentric views. This led them to insist on following development and marketing models that were extremely successful when they had little real competition. As a result their foreign competitors were able to innovate current and new products and services while our automakers refused to recognize that they were being overtaken by competition. This complacency also infected the American auto unions who thought the automakers sales and profits were immune to declines. They insisted on and the auto giants agree to wage and benefits that became unaffordable once foreign competition began to catch up to and overtake the Americans.    

Now that the government has stepped in GM, Ford and Chrysler have a chance to regain their leadership position in the American and world auto market. The challenge is how to do that. We are going to discuss a recovery plan using the S.M.A.R.T. system referenced in your text on page 198, as well as the other techniques covered in that Module.

To start off let’s define a goal/objective for the S in SMART. What do we want to achieve and what do we have to do to get there? To start us off are any of these good goals for GM:

–   To be the largest and most profitable auto maker in the US/the  world

–   To attain the largest share of market in the world or US auto market

–   To convince the American auto customer that GM produces autos that meet their needs

–    (Reframe any of these and/or post the objective that you believe best fits for GM)