Is GM Old Board Guilty of Corporate Mismanagement and Can the New GM Board Save the Company?

GM Is A Lost Vision

I remember watching GM CEO Roger Smith in a GM Corporate Teleconference in 1984 or 1985 indicating that GM had committed the necessary resources to set up Saturn and the research of Alex Maier that supported the idea.

At that time, in the mid 1980’s GM had about 50% market share and Oldsmobile sold about 1 million cars per year. Today’s sales are about 10 million units annually so using these numbers the Oldsmobile 1/10 = 10% of total sales. This is bad math, but it illustrates a point. Recent year sales have been about 16 million units so 6.25%.

Will the New GM Survive

On a very somber note GM will get smaller than anyone imagines, now that GM has gotten past the bankruptcy chaos. It is our assessment that in three years GM will be smaller than Ford and about the size of Honda.

GM Market Share Falling

Currently, GM talks about maintaining 19% of the U.S. market, but that’s not going to happen. Before bankruptcy, in the first four months of 2009, GM had 19.2% of the market. Car divisions to be shut down include Pontiac, Saturn, Hummer and Saab representing 2.8 points, which calculates to 16.4% remaining.

Continuing the calculation let’s look at Buick-Pontiac-GMC where Pontiac accounts for one-third of their sales.  A second factor are fuel prices that will increase and third, EPA MPG requirements that will increase all combine to hammer GMC’s pickups and sport utility vehicles which means that GMC will see a sales decline.  Today’s market share is 13% for Chevy and Cadillac.  Projecting forward would be to take the 13% add in GMC & Buick and then adjust the numbers ahead 3 years. This is a sobering calculation which leads us to believe that GM will be about the size of Honda in 3 years.

GM Corporate Mismanagement

At that GM teleconference I was thinking about a statement made by a regional Division Manager of Oldsmobile anyone that messes with Oldsmobile is crazy. GM Corporate starved and neglected Oldsmobile and the entire GM product line.

The Automotive Tribune does not have an attorney on the staff but in our assessment it certainly seems that this type of GM Corporate Neglect in the Boardroom and CEO Corner Office represents a Civil Crime. GM’s Board of Directors (with a few exceptions who raised their voice and were shown the door) were dead to the reality of what was going on.

Was GM’s Board Guilty of a Civil Crime

That question can only be resolved by a Jury. As a Car Guy your Tribune Editor is of the opinion that the Jury would come back with the Decision that the GM Board was Negligent in their Responsibilities.

If the Jury questions were expanded to include Selected GM Corporate Officers that would prove to be really interesting. The Late Roger Smith was recognized as #13 in the CNBC list of Worst American CEO’s of All Time.

Is The Old GM Board Guilty?

If success is measured in market share then GM’s Board is Guilty.  If success is measured by Corporate CEO Leadership then they are Guilty.

New GM Board

It is important to separate past actions from current action.  It is clear that there are two entirely different mind sets.  As stated clearly in this article, if current trends continue, GM will shrink to about 10% market share in three years. 

GM’s current board has many issues to deal with.  The #1 issue is Percetion of GM by the American Customer.  There is no technical problem with GM Product, as is clearly indicated in the ratings.  However, GM is in a Disconnect with the American Consumer and Consumers are the Purchasers of cars and trucks.

Burning Customer Relationships

GM has burned so many customers for so long [car diesel engines, selective cylinder shut off (old system not new system), and Pontiac Aztec to name just a few] that the Majority of American Society finds it easy to pan GM.  American Society is of the opinion that Toyota is the Greenest Car Company in the US.  Toyota has a great, long term, quality image.

An Open Message To The GM Board

You, the GM Board, need to look at Wal Mart.  Several years ago their image was flagging.  They got a top tier image consultant, applied corrective procedures, and today the Wal Mart public image is very good.

For you the GM Board, this is not Rocket Science, it is far more serious.  Rocket Science is far more predictable.  To experience a rocket or NASA  space failure brings together the experts examine the “event” in an orderly manner to resolve the problem.

For you, the GM Board, you now have to stop the 40 years of market share decline.  Action and Success can only be measured in long-term market share retention.

Does History Repeat Itself

In 1912 the Titanic sank.  Captain Smith did not heed information about icebergs.  The Federal Government “Bailed Out” GM.  Now the real question is how far will
GM sink in the foreseeable future?