Comments

Right On!!!! We've got to outwork our competition, but let's work smarter. Let other countries take the mfg. jobs and other outsourcable opportunities. Let's get back to good old US innovation. More bio-tech, more nano-tech, more leading edge, let's lead where we have a chance to set the pace, not play from behind.

Posted by John at December 8, 2005 10:28 AM

An excellent post, Mike. It has been a real refreshing experience. In my opinion, the biggest failure in management today is that talented people are not getting the place they deserve. If companies have problems is not a big surprise, how could they go well if the best are not in the best positions?

Posted by Felix Gerena at December 8, 2005 10:41 AM

Hello Mike! I like that you mention about cutting the crap observations, it's is particularly important here and everywhere today.

What you seem to complain about appears to me to be the natural way global economy should be developing: sometimes at higher speed rates in some other places that didn't reach before near their economic potential.

Felix, for the situation who expose I think rotation will be a suitable solution.

Posted by Omara at December 8, 2005 11:33 AM

Mike, Right on target. We in the U.S. are incredibly spoiled. We've grown accustomed to being the biggest and baddest since WWII. Of course, we were also the only world power left standing after that war so it wasn't a level playing field. Now, in our increasingly flat world, the playing field is definitely level - and others are playing new games.

One line in particular resonates, "No one is doing this to you." I may steal that for one of my own blog entries.

And, gosh, I bet Ford pulling advertising from gay media will just make ALL the difference in their biz...sigh.

Posted by Mary Schmidt at December 8, 2005 11:52 AM

Frankly, the car commercial turn me off. All the millions of dollars spent to promote those autos and those TV ads do nothing for my choice of vehicle. I just visit the local dealers and see hwere i can get the best price and service!

Posted by ErnieF at December 8, 2005 11:58 AM

Education at the school level is key to revitalise American industry - especially in maths and science.

You know guys, when I was a kid - around 5 years old, I knew that I wanted to be an engineer. I had to take 2 rounds of tests at that age to get to the school that my parents wanted me to go to. Fast forward 25 years later, I have a degree in engineering and an MBA.

Competition is good in schools. You need more of it. Testing provides that competition. The earlier you teach kids that they need to compete, the better it is for them - while also teaching them about fairness and sharing and all the rest of it.. You certainly don't want to raise Gordon Geckos.

Anyway, back to the original story - All the way through school, the guys who were looked up to, were the guys who were phenomenal at academics, NOT sports!! - they were the top few in class. Since science subjects were the only ones where you could really score 100/100, if you needed to win, you needed to do your science exams well. So students focused on Science and Maths. I'm sure that this "trend" was replicated in most schools all over India, as parents pressurised their kids to get better aggregate percentages. Perhaps that's why many like me are good at math and science - because we worked at it.

Haha.. needless to say, my "soft skills" suck - especially design! But hey, I can outsource that part of my work to a "touchy-feely" artsy local european???!!!!! :-)))

Posted by Arun Sadhashivan at December 8, 2005 12:45 PM

Nice job Mike. I also think that the American auto industry exhibits an almost criminal level of myopia when it comes to the realities of the global marketplace. GM is probably going to sell more cars overseas this year than in the US, yet it seems they learn nothing from those markets.

European gas prices are some multiple of the ones in the US, and the car companies should have seen those same kind of prices eventually coming here. They got fat and lazy off the huge margins of huge vehicles. It seems they never bothered to invest in a little future thinking about what might happen when gas suddenly is taking a significant chunk out of people's paychecks.

Working harder won't necessarily help. Being a little curious about the realities of the rest of the world, asking intelligent "what if" questions and investing at least a little bit in the future might be one way to start.

Posted by Andrew Hayden at December 8, 2005 1:09 PM

Heart-sinking stuff Mike. As a fourteen year Ford of Europe veteran, I get similar pangs of conscience as I drive past the formerly massive and now largely defunct Ford Dagenham Operations. The site is largely used to park new imported cars before distribution - not all of them Fords either! I left Ford from Dagenham when 1200 cars (many with defective glove box latches too!) a day was the schedule and 1000 shipped was a good day. The Japanese car industry threat had well and truly been discovered by then and what needed to be done was painted in big red letters on every wall. But 15 years later it was not done! It's all too familiar. Knowing different is relatively easy these days. Doing different is still ......... hard!

Posted by Richard King at December 8, 2005 1:10 PM

If I hear "this is how we've been doing things for fifty+ years and it's worked great for us" one more time, I am going to gag.

Especially when it comes from a company whose strategy for the next five years is:
1) Respond to price pressures from cheaper imports (copies) by moving production overseas 2) then cutting costs further by shifting emphasis from smart design to cheaper and more generic parts, 3) then cutting corners on quality, 4) then starting to say "no" to customers or charging them extra for service, 5) then spending the equivalent of a third world country's GNP on advertising and promotions to try and boost slumping sales.

Before you know it, your brand is no longer relevant, your products are average (at best), and nobody cares.

Nobody wins a price war.

There's a lot of denial in American corporations.

"This is how we've been doing things for fifty+ years and it's worked great for us" doesn't fly when you're only growing at 6% per year or when you find yourself having to lay off 30,000 workers.

Great post, Tom.

Posted by olivier blanchard at December 8, 2005 1:11 PM

There is a new revolution going on in science and technology for kids ages 9-18. The revolution is called FIRST Lego League, VEX and First Robotics Competition. I am a new coach for a Lego League team which competes with robots that the kids build and program using kits. THIS STUFF IS CONTAGIOUS WITH THE KIDS!! The objective of the program is to get kids interested in engineering, science and robotics. The FIRST organization is doing something schools are unable or unwilling to do. These robotic competitions are like sporting events. To learn more, do a web search on FIRST Lego League.

Posted by Kraig Richardson at December 8, 2005 1:14 PM

Nice to see you Andrew. Of course I agree that myopia is huge. When you grow your own engineers in your own college with textbooks written by alumni...well..you get my drift. I do take issue that working harder won't help. I am not talking about sweat equity here, but some urgency and the realization that a fair days work for a days pay in the big three would probably get you sacked in other companies. Andrew, my research here comes from my years of managing both exempt and nonexempt at GM. In GM's case, it is about market share. they invested heavily in operational excellence and cost control, and then forgot to build vehicles that people wanted. Thanks for your thoughts Andrew

Posted by mike neiss at December 8, 2005 1:15 PM

Mike, I guess my point about working harder is that you have to make sure you're working harder on the right things.

When I was in the consumer PC group at IBM, there were a lot of brilliant engineers who worked 70-80 hour weeks to design motherboards. They did an excellent job, but if you lifted your head and looked at the competition, virtually all of them were buying motherboards pre-made from Intel.

Inevitably, our PCs were later to market and cost more than most of the competitors, but with no appreciable performance advantage. In a price sensitive marketplace where most of the PCs were similar big boxes, we worked harder, but did we work smarter?

Eventually the company adopted the industry model, but by then it was too late.

Posted by Andrew Hayden at December 8, 2005 2:38 PM

Absolutely dead on! And here is one more thing - embrace change. Instead of sending scores of lobbyists and lawyers to Washington to explain why something can not or should not be done - hire more engineers to figure out how it can be done.

Posted by Doug Ward at December 8, 2005 2:47 PM

Here are a few of my own "cut-the-crap" observations from a Michigan veteran of a transplant auto company:
1. It doesn't matter. Even Michigan's economy is substantially diversified these days that GM and Ford can close every plant in the state. There will be pain, but not as much as the state politicos would like everyone to believe.
2. Honda, Toyota, Subaru, and Nissan are heavily invested in Michigan and other "rust belt" states--directly and through many suppliers of all tiers. Yes, you can make money with US labor. The "labor" doesn't make UAW rates, but they do pretty well for themselves.
3. GM expected Delphi to go under when they cut it loose. Ford expected the same of Visteon.
Then, they would be free of these high priced supplier albatrosses and could buy from lower priced, high quality competitors.
4. Talent is still appreciated. If you want to be in the auto industry, you might have to work for the Germans or the Japanese, but you can still thrive as an engineer, manager (LEADER, sorry), line worker, technician, etc.
5. There is a LOT to Michigan that isn't Detroit or Flint. Really. Come on over sometime and I'll show you around...

Posted by Mike at December 8, 2005 4:21 PM

Everything can be outsourced, except the tasks that involve the US market directly.

Design and Marketing.

Design and Marketing it is folks.

Posted by Vishi at December 8, 2005 4:50 PM

If my memory serves me right, this is the 3rd wake up call for GM. They didn't anticipate the demand for smaller cars in the 70s and they were late to the quality dance in the 80s. And now they've missed the boat on design and fuel efficiency. It's a safe bet that those responsible will land on their feet while their employees will pay the price.

Posted by John O'Leary at December 8, 2005 9:36 PM

I’m from Ukraine. And I’d like to tell you that your films, cars ….. become inadequacy. You don’t see that your goods aren’t suitable for other nations. You sell only what you like, because you’ve felt in love with you products. I think you should come down from the sky to look what other people want.
But in general, I hold in high respect to achievement of your economy.

Posted by Nestor at December 9, 2005 4:03 AM

I hear you Mike - I drive an Infinity mainly because it was made in Japan from Japanese parts - 60k - going for 260k.

Posted by Sean at December 9, 2005 9:39 AM

Until we realize that business doesn't care about education little will change about public education. Employers can get intelligent workers as free agents and knowledge nomads 24/7 cheaper in other countries that return gain to shareholders. If they really cared about educated workers in the US over the long term they'd fund public education to be delivered as well as in the private schools within which their children go. There is no better investment in the future than education.

Posted by Rich at December 9, 2005 5:42 PM

> U.S. business schools and grads take note.
> Where's the homegrown talent? If you can
> pull your eyes away from your spreadsheets,
> you might be able to see what we are missing.

Our homegrown talent is consumed with pimping their rides, waiting in line overnight for the XBox 360 and leeching off of mom and dad wondering how their inflated 4.0 average in high school didn't translate to a cakewalk college aducation and a 50K job without experience.

Posted by Drew at December 11, 2005 9:46 AM

Hey guys,

I just heard that the Kia (a division of Hyundai) cars have a waiting list for a few months to a year here in the Netherlands. Especially the model called Kia Sorento.. Granted, it's an SUV, and folks in the Netherlands are beginning to buy more and more, which is wierd... :-))

The success is due to their price quality mix.. You get fairly good quality (as compared to a mercedes or a bmw), at a deeply discounted price.. the car looks gorgeous. Designed in the west - I believe in Frankfurt.

I guess the South Koreans are doing to the Japanese, what the Japanese did to the Americans.

Posted by Arun Sadhashivan at December 12, 2005 3:31 AM

Customer comment for a car guy. The only American cars I have ever bought were muscle/performanc cars (68 Charger/84 Camaro). I did once make the mistake and buy a Chysler mini-van (kid hauling needs) what a nighmare. Americans have never made good cars, you had to modify them to get good. Europeans don't make the best reliable cars but they have the best overall performance/quality. I have owned (BMW M3/Passat GLS). The cars with the best quality/performance value have been the Japanese. Owned several Hondas, Toyotas, Lexus, and Infiniti. American car company's have been obselete from their first innovation's of mass production and mass marketing. Marketing doesn't sell, brand loyalty is the only thing that barely keeps American car companies afloat. Innovate, get lean at the bureacracy level or the customer will push you out of business. The dollar votes.

Posted by Greg at December 20, 2005 9:57 AM

Te contsto en español para tu público de habla hispana que es mucho y realmente te felicito y encuentro tu actividad genial y vamos a seguir de cerca desde Chile. Saludos Rodrigo González Fernández, Santiago, Chileconsultajuridica.blogspot.com

Posted by rodrigo gonzalez fernandez at December 21, 2005 5:36 PM