When General Motors sneezes ...

[SoCalCTS]

Star Tribune Story


Editorial: When General Motors sneezes ...
Detroit's health-care costs are symptoms of a bigger problem.
Last update: November 28, 2005 at 5:54 PM

Like many Americans, Barack Obama was stunned last week when General Motors announced plans to lay off a quarter of its manufacturing workforce -- some 30,000 people -- and shutter a dozen North American factories by 2008.

But Obama, a Democratic senator from Illinois, was in a position to do something about the latest sign of U.S. industrial meltdown. He has introduced legislation that would relieve American automakers of part of their retiree health-care costs if, in exchange, they promise to invest a portion of their savings in production of fuel-efficient vehicles.

We have misgivings about the details of Obama's plan. But if it sparks a conversation about the cost of health care and American competitiveness in a global economy, that's progress.

The swap that Obama proposes is attractive, but it could send some bad signals. It seems to cushion Detroit from a series of management mistakes over the last decade -- specifically, its sustained bet on gas-guzzling SUVs. In effect, it punishes rivals such as Toyota for having the foresight and initiative to develop hybrids and other fuel-saving cars. Finally, it raises dangerous issues of precedent: Should the government bail out other old-line companies, such as IBM or AT&T, that have hefty retiree costs?

That said, Obama is onto something important about health care costs in the United States and the way they are crippling the competitiveness of American industry. Hefty insurance premiums certainly aren't the only reason why Detroit's Big Three have struggled. But they can't be ignored. By one estimate, employee health insurance costs General Motors $1,400 per car, more than steel or engineering. The figure at Toyota, by contrast, is something like $200 per car.

Because the United States, alone among advanced nations, has chosen to link health insurance to the workplace, it has also imposed a business cost that is no longer sustainable in a global economy. It's not just that taxpayers pick up part or all of the bill in Japan, Britain, Germany, France, Australia, Taiwan and other developed nations, lifting part of the expense off business. It's that these nations, by streamlining administrative costs and creating universal coverage pools, have also achieved vastly lower costs. Americans spent $5,274 per person on health care in 2002, according to the World Health Organization. The comparable figure in Canada was $2,931. In Germany it was $2,817. In Australia, $2,699 and in Japan, $2,133. All these countries, by the way, had better overall health indicators than the United States.

Thirty years ago the expense of health care was an afterthought in world economic competition, a field where American companies enjoyed the advantages of light regulation, a low cost of capital, a flexible workforce and constant innovation. As the industrial giants stumble and the ranks of the uninsured climb, however, it is an afterthought no more.

[regfootball]

i just read that in the paper at lunch at BK chowing on a whopper........a surprisingly fair article from the strib, although i do not like the assumed claim they make of other countries having superior health care setups.

[thegriffon]

"It seems to cushion Detroit from a series of management mistakes over the last decade -- specifically, its sustained bet on gas-guzzling SUVs. In effect, it punishes rivals such as Toyota for having the foresight and initiative to develop hybrids and other fuel-saving cars."

I can't see how either of thse would be true.

Better overall health indicators probably go a long way to explaining lower heath-care costs. The rest is because of chronic under-funding, not genuine "lower costs". The public health systems in the UK and Australia are a perennial source of political unrest, scandal, and pork. Governments have been known to "punish" sections of the electorate by closing services. The wait for non-emergency surgery can take years unless you pay as a "private" patient, and the gap between public cover and basic private costs such as a checkup is increasing all the time.

[thegriffon]

Since they reference Germany perhaps this is relevant: "Medical workers at Europe's largest university hospital, Charite in Berlin, Germany, are on a weeklong strike to protest pay cuts and unpaid overtime."

[cmattson]

I don't think gov't-run healthcare is the answer. I think a couple of things could help:

1. Discouple healthcare from businesses. As much as *I HATE* the thought of businesses shifting the burden from themselves to individuals (a la pensions -> 401k), you'd have to admit that if people had to shop-themselves around they'd take a little bit better care of themselves and they'd pay closer attention to the cost; forcing ins. companies to be a bit more competitive. This means I won't get to open the financial page of the Mpls. Star & Tribune business section and find that 5 of the United Healthcare executives made the Minnesota's top-10 for executive compensation. That's absurd.

2. Curb profits at the drug companies and at healthcare companies. This is no different than what the government does with utilities companies. When a utility company needs to raise rates, it must make a business case to do so. It opens it's books and has to petition the gov't to raise it's rates. If drug companies and healthcare companies did the same, perhaps we wouldn't have the runaway profiteering we do now. Quick factiod. Q: Since the great depression, what business sector has enjoyed gains each and every year. This business sector has outperformed every other business sector in the economy each and every year for the past 35 years. A: Pharmaceuticals. Now you know where to put your money boys and girls.

If you really wanted to look at growing the economy, I think you could probably extend thought #2 to include oil/energy companies as well. What good isn't transported into and around this country? Our basic cost of living is soo tied to energy costs, it isn't even funny. If energy profits were curbed (meaning oil/energy were even cheaper) the consumers spending ability would rise. And if you really wanted to bring up people's spending power, you'd index a companies average pay to their executive pay -> meaning the executive's pay couldn't exceed the average pay in the company by some sort of ratio. I don't think that would limit an executive's pay so much that it would rise pay levels, limit company profit/share-holder return. Shareholders would have to get used to the idea that businesses cannot sustain their "this-quarter is only 5% better than last quarter and we need to see never ending double-digit gains mentality". Personally, I think that one's a bit over-the-top, but I'd be curious to see where things would be if we had that in place for a while..

[aaaantoine]

I don't think gov't-run healthcare is the answer.  I think a couple of things could help:

1. Discouple healthcare from businesses.  As much as *I HATE* the thought of businesses shifting the burden from themselves to individuals (a la pensions -> 401k), you'd have to admit that if people had to shop-themselves around they'd take a little bit better care of themselves and they'd pay closer attention to the cost; forcing ins. companies to be a bit more competitive.  This means I won't get to open the financial page of the Mpls. Star & Tribune business section and find that 5 of the United Healthcare executives made the Minnesota's top-10 for executive compensation.  That's absurd.

2. Curb profits at the drug companies and at healthcare companies.  This is no different than what the government does with utilities companies.  When a utility company needs to raise rates, it must make a business case to do so.  It opens it's books and has to petition the gov't to raise it's rates.  If drug companies and healthcare companies did the same, perhaps we wouldn't have the runaway profiteering we do now.  Quick factiod.  Q: Since the great depression, what business sector has enjoyed gains each and every year.  This business sector has outperformed every other business sector in the economy each and every year for the past 35 years.  A: Pharmaceuticals.  Now you know where to put your money boys and girls.

If you really wanted to look at growing the economy, I think you could probably extend thought #2 to include oil/energy companies as well.  What good isn't transported into and around this country?  Our basic cost of living is soo tied to energy costs, it isn't even funny.  If energy profits were curbed (meaning oil/energy were even cheaper) the consumers spending ability would rise.  And if you really wanted to bring up people's spending power, you'd index a companies average pay to their executive pay -> meaning the executive's pay couldn't exceed the average pay in the company by some sort of ratio.  I don't think that would limit an executive's pay so much that it would rise pay levels, limit company profit/share-holder return.  Shareholders would have to get used to the idea that businesses cannot sustain their "this-quarter is only 5% better than last quarter and we need to see never ending double-digit gains mentality". Personally, I think that one's a bit over-the-top, but I'd be curious to see where things would be if we had that in place for a while..

[post="50145"]<{POST_SNAPBACK}>[/post]

Ideally, I look forward to your suggestions coming to pass. In reality, however, greed goes a long way to screw up the quality of life of those who are not in power.

Lobbyists will pay off the governments to keep healthcare private. The government just got more money, and keeps healthcare private, which makes the industry more money. The Government wins. The Healthcare Industry wins. Guess who loses.

[bowtie_dude]

Government run anything is never the answer to any problem. The US government bungles everything, just look at social security, social welfare, and medicare.

[FUTURE_OF_GM]

[quote]Like many Americans, Barack Obama was stunned last week when General Motors announced plans to lay off a quarter of its manufacturing workforce -- some 30,000 people -- and shutter a dozen North American factories by 2008.[/quote]

This perfectly sums up how IGNORANT most americans are...

Seriously.... Has this guy not watched the news in a few YEARS?!?!?!?

[quote]But Obama, a Democratic senator from Illinois,[/quote]

And that makes my statement above all the more priceless.

[quote]was in a position to do something about the latest sign of U.S. industrial meltdown. He has introduced legislation that would relieve American automakers of part of their retiree health-care costs if, in exchange, they promise to invest a portion of their savings in production of fuel-efficient vehicles.[/quote]

Depends.... Will these "fuel efficient vehicles" make money for GM, or be a perpetual loss like all hybrids of the world now?

[quote]It seems to cushion Detroit from a series of management mistakes over the last decade -- specifically, its sustained bet on gas-guzzling SUVs.[/quote]

I don't see why all in the media think this was such a HUGE mistake... Wall Street certainly enjoyed the record profits, consumers obviously like these vehicles and GM paid it's healthcare and pension... Seems like a pretty smart move to me..

Sure, GM should not have abandoned the car side of the business BUT, if the only way the company can make money because of legacy costs is to invest in a part of the market that is unpopular with media zealots and all the new found self righteous 'oil saver' analysts and public schmoes, then so be it...

GM's job is to make money, not satisfy personal agendas from starving journalists or trend of the week fat cat analysts... and they chose the right path to do so. GOOD business move IMO.


[quote]In effect, it punishes rivals such as Toyota for having the foresight and initiative to develop hybrids and other fuel-saving cars.[/quote]

(Another Toyota humper :rolleyes:)

Oh well....

Toyota didn't build this economy.... Toyota isn't supporting thousand of american pensions and Toyota isn't employing MOST of the american automotive work force.


[quote]Because the United States, alone among advanced nations, has chosen to link health insurance to the workplace, it has also imposed a business cost that is no longer sustainable in a global economy. It's not just that taxpayers pick up part or all of the bill in Japan, Britain, Germany, France, Australia, Taiwan and other developed nations, lifting part of the expense off business. It's that these nations, by streamlining administrative costs and creating universal coverage pools, have also achieved vastly lower costs. Americans spent $5,274 per person on health care in 2002, according to the World Health Organization. The comparable figure in Canada was $2,931. In Germany it was $2,817. In Australia, $2,699 and in Japan, $2,133. All these countries, by the way, had better overall health indicators than the United States.[/quote]

WOW! Finally some in the media and government *might* be catching on to the GREAT scam that is HEALTH CARE in america, and to boot might actually be seeing that we're about to lose our ass on the industry forefront.

[cmattson]

Medicare's administration & overhead costs are unbelievably better than private healthcare. Just because our gov't administers something doesn't mean it's bloated beyond belief. While Medicare does have it's issues -- overhead isn't one of them.

[regfootball]

i just read that in the paper at lunch at BK chowing on a whopper........a surprisingly fair article from the strib, although i do not like the assumed claim they make of other countries having superior health care setups.

[post="50123"]<{POST_SNAPBACK}>[/post]

letme clarify...i did not mean 'fair' article. i guess i was surprised it was not a much more liberal viewpoint. it was a liberal viewpoint, but the strib is usually clueless x 10 on most topics. here they are just mildly clueless.

[regfootball]

Flint's article (another topic) from today cuts directly to the chase our industry is facing with regards to health care etc. everyone in America needs to read that article.

[Guest buickman]

Health care is a concern, yet we have two directors who are from pharmaceutical companies, Karen Katen from Pfizer, and Percy Barnevick from Astra Zeneca. We are concerned about fuel economy yet a board member, John Bryan serves on the board of British Petroleum. Anyone notice a conflict of interest? The UAW should offer concessions in exchange for a seat on the board. These folks have a true vested interest in GM's success, as do their families and communities. Why not eliminate the jobs bank and put these people to work in the plant doing something. This makes more sense than paying a guy to work overtime, or having contract workers. Hello??? Isn't it time for some common sense?

[Guest Josh]

Health care is a concern, yet we have two directors who are from pharmaceutical companies, Karen Katen from Pfizer, and Percy Barnevick from Astra Zeneca. We are concerned about fuel economy yet a board member, John Bryan serves on the board of British Petroleum. Anyone notice a conflict of interest?

[post="50382"]<{POST_SNAPBACK}>[/post]

People may knock on dolinger....but look at the wealth of information that post holds.

Now wonder why he says what he says and come from where he comes from. A member of the board of B.P. is on the board for General Motors?!?

[Guest buickman]

Josh, That's just the tip of the iceburg. Buickman

[Guest buickman]

I'm available most anytime. It will be an honor to be interviewed by C&G. Just waiting for Josh.

[turbo200]

yay, more free publicity

[Guest buickman]

for a common sense plan that will work.

[evok]

for a common sense plan that will work.

[post="51553"]<{POST_SNAPBACK}>[/post]

Maybe if you present some data that shows, your "common sense" plan will work, you would have an ounce of credibility with GM. The problem is you don't have any data to support you opinion (plan). Your plan therefor is just opinion and you know what they say about opinions!

I still have yet to see any competitor of GM implement any of your "Twenty Points" in their own buisness model. And, it has been 6 months since your plan has been made public... have you ever thought why?

Six months ago I said I would revisit this discussion and see what other manufacturers would implement the "Return to Greatness". And I just did. Edited December 2, 2005 by evok

[razoredge]

Maybe if you present some data that shows, your "common sense" plan will work, you would have an ounce of credibility with GM.  The problem is you don't have any data to support you opinion (plan).  Your plan therefor is just opinion and you know what they say about opinions!

I still have yet to see any competitor of GM implement any of your "Twenty Points" in their own buisness model.  And, it has been 6 months since your plan has been made public... have you ever thought why?

Six months ago I said I would revisit this discussion and see what other manufacturers would implement the "Return to Greatness".  And I just did.

[post="51731"]<{POST_SNAPBACK}>[/post]

I agree, rather than try something anything its just best to sit and do nothing and just watch everything flow away.

Ingenious !

[evok]

I agree, rather than try something anything its just best to sit and do nothing and just watch everything flow away.

Ingenious !

[post="51756"]<{POST_SNAPBACK}>[/post]

Have you read the plan? Have you analysed the 20 Points?

[turbo200]

I agree, rather than try something anything its just best to sit and do nothing and just watch everything flow away.

Ingenious !

[post="51756"]<{POST_SNAPBACK}>[/post]

Do you know what GM actually is doing about the dwindling market share? Do you have access to future product plans? Do you know where there future investments lie?

Something is being done, you just don't see it yet.

[FUTURE_OF_GM]

I'm willing to *listen* to Buickman..

And no, I haven't read the plan or the 20 points but I also think that a lot of GM and Ford's problem are a result of no common sense.

I'm sure GM has a plan (Well, I'm kinda sure anyway) but my big complaint or issue is that all their 'plans' haven't worked for the past 20 years.

So, I think SOMEONE whether it be Buickman or Kerkorian's rep needs to shake things up or either GM management better step outside of their box, and that also goes for Ford.

[turbo200]

I'd be willing to listen to buickman if he had more to talk about than ousting Wagoner. It's funny how months back, he became so irate with C&G and with Josh when he wasn't being interviewed. He asked for all his posts to be removed, as if they were knowledge that we plebians couldn't have. Now all of a sudden he's "honored" that Josh has shown interest again. Buickman seems to regurgitate everything he says again and again. C&G knows what the real problem with GM has been, always, for decades now, is the PRODUCT. Clean. cut. clear. simple.

[razoredge]

[quote name='turbo200' date='Dec 2 2005, 01:56 PM'][quote]I'd be willing to listen to buickman if he had more to talk about than ousting Wagoner. It's funny how months back, he became so irate with C&G and with Josh when he wasn't being interviewed. He asked for all his posts to be removed, as if they were knowledge that we plebians couldn't have. Now all of a sudden he's "honored" that Josh has shown interest again.[/quote]

First Im not standing up for the guy, but I will say when you guys get tag teaming someone rather than give a listen and open the mind and see the other side, do you not expect them to get irate ?.....yaright !...thats the whole point of it in the first place, isnt it ? Do a little PM chitty chatty then go for the throat because this is someone that does not see our side but rather their own. I think I know a little about this.......do I not ?

[quote]Buickman seems to regurgitate everything he says again and again.[/quote]

Now what is this ? Im thinkin the use of that regurgitating word is meant to be some kind of insult or reference to accute retardation, at least thats how I have come to interpret it and its use here. Just to shed some simple basic knowledge on the subject of someone repeating their stance.......here we go.....ready?......its because thats what they believe in, thats what they are faced with, thats the world that they live in. Rather than deny credit to someones existance, experiance, and evaluation of that givin situation why dont you listen to it, obsorb it and realize that the friggin world is not flat ?

[quote]C&G knows what the real problem with GM has been[/quote]

now, I have been around here enough to know that you know GM's problem is not simple or accredited to a "real" problem. Though myself I would say its mostly because we have allowed foreign competition to purchase property within our country thereby making it alright for the American public to by foreign because its now somehow American :unsure:

[quote]always, for decades now, is the PRODUCT.[/quote]

I still say bullshit to this one. I have asked a few times as to what ricemobile built in the mid-late 80's was a better car than my 1986 Buick LeSabre Limited ? Not a single answer but somehow Im sure some friggin Honda or Toyota or Nissan had the ass tray mounted just perfect so as to prove my LeSabre was justifiably junk.

I will not deny that the lowly Chevy models and their divisional counterparts should have been better and that they were the cars that competed directly with the compact that imports were at that time. BUT! Still everyone pulls them out of their hat to sum up the overview of all GM products.

[quote]Clean. cut. clear. simple.[/quote]

If only !
All the kings horses and all the kings men !

[post="51807"]<{POST_SNAPBACK}>[/post]

[/quote]

[razoredge]

Have you read the plan? Have you analysed the 20 Points?

[post="51764"]<{POST_SNAPBACK}>[/post]

No I havent, and I did think it strange that it could not be posted but yet would be mailed or whatever that deal was, I did not follow those threads because I could see they were becomming a huge gangbang bash fest.

As for analyzing........didnt someone analyze Fiat back in the 90's and make some great "power point" decision based on that analysis ? I guess this would be one of the times that doing nothing would have been the best bet ?

[turbo200]

[quote name='razoredge' date='Dec 2 2005, 03:43 PM']
First Im not standing up for the guy, but I will say when you guys get tag teaming someone rather than give a listen and open the mind and see the other side, do you not expect them to get irate ?.....yaright !...thats the whole point of it in the first place, isnt it ? Do a little PM chitty chatty then go for the throat because this is someone that does not see our side but rather their own. I think I know a little about this.......do I not ?


This is ridiculous. There is no tag teaming going on, just because we happen to come from a similar viewpoint with regards to buickman and his points. I could care less if Mr. Dollinger shares his points here. He will only get ripped apart further, because he refuses to acknowledge the essence of GM's problems.

You want to hear a little of what buickman has to say, just do a search of his posts here. It's basically what he's been saying for over a year now, here and at CZ28, oh and do a search on that site too.

Now what is this ? Im thinkin the use of that regurgitating word is meant to be some kind of insult or reference to accute retardation, at least thats how I have come to interpret it and its use here. Just to shed some simple basic knowledge on the subject of someone repeating their stance.......here we go.....ready?......its because thats what they believe in, thats what they are faced with, thats the world that they live in. Rather than deny credit to someones existance, experiance, and evaluation of that givin situation why dont you listen to it, obsorb it and realize that the friggin world is not flat ?


Okay, I guess I wasn't clear enough. Buickman doesn't really listen to what others have to say; he isn't ready to acknowledge a different viewpoint then his. Most people here are very quick to make a snap judgement on the current GM administration, when they have no idea what goes on behind the scenes. It's getting more than a little frustrating to see all these people with limited knowledge pretend to know all that goes on behind the scenes and pretend Wagoner hasn't done anything of good, when voices who do know the truth are standing behind his administration. This is what Buickman exemplifies, this and his constant repetitive calls for Wagoner's ousting, that if you look around, most people here ignore anyways.

now, I have been around here enough to know that you know GM's problem is not simple or accredited to a "real" problem. Though myself I would say its mostly because we have allowed foreign competition to purchase property within our country thereby making it alright for the American public to by foreign because its now somehow American :unsure:
I still say bullshit to this one. I have asked a few times as to what ricemobile built in the mid-late 80's was a better car than my 1986 Buick LeSabre Limited ? Not a single answer but somehow Im sure some friggin Honda or Toyota or Nissan had the ass tray mounted just perfect so as to prove my LeSabre was justifiably junk.

Have you looked around? GM has exactly one model that is class-leading, the C6 Corvette. They have relied on arrogance, a strong dealer body, and hefty marketing accounts to sell cars that weren't up to the bar of the competition. I'm not talking about your Buick razor, lose some ego, recognize this world doens't revolve around the one car you purchased from GM. No, I am referring to scores and heaps of crap from General Motors. Want me to host a poll on this FAN SITE about how many years GM has been making crap? Is that what you want?

I will not deny that the lowly Chevy models and their divisional counterparts
should have been better and that they were the cars that competed directly with the compact that imports were at that time. BUT! Still everyone pulls them out of their hat to sum up the overview of all GM products.
If only !
All the kings horses and all the kings men !

I have expelled much energy and effort trying to show GM where they aren't bulding what the customer wants. They have listened, and are responding, with real good cars, that drive the way we want them to, sound the way we want them to, look like we would love for them to look. Witness the Solstice, Sky, Aura, and a host of other upcoming GM products, that you won't hear me bitching about, razor. Finally, the consumer has been listened to and paid attention to, and GM is no longer concerned with cutting corners, instead they are concerned with pleasing the consumer, in order to stay a viable business, which I DO CARE ABOUT. Praise God!

[post="51807"]<{POST_SNAPBACK}>[/post]

[/quote]

[post="51921"]<{POST_SNAPBACK}>[/post]

[/quote]

[Guest buickman]

Ok here...

GENERAL WATCH NEWS
As was well known prior to the Annual Stockholders' Meeting, the call was made for Rick Wagoner to resign, based upon his record. Security at the event refused to allow distribution of the following report to fellow shareholders. At the conclusion, a line formed to receive the material. Here it is for your review. For a transcript of the meeting call 313-556-5000 and ask for shareholder relations. More soon...



GENERAL MOTORS


RETURN to GREATNESS

____________________


FOUR PILLARS
For Market Share
____________________



Customer Long Term Care

Dealer Training

Company Policy

Veteran Involvement



THE PLAN


1st PILLAR - CUSTOMER LONG TERM CARE

Step Six Got GM - Get GM
Step Ten AARP
Step Eleven Brand Merchandise
Step Twelve Auto Shows
Step Fifteen Referral Savings Accounts
Step Nineteen Direct communication


2nd PILLAR DEALER TRAINING

Step Four Destination Detroit
Step Five Home Deliveries
Step Eight Dealer Margin
Step Eighteen Sales Guilds
Step Twenty Regional Sales Training


3rd PILLAR COMPANY POLICY

Step One Elimination of Destination
Step Two Mid Year Price Increases
Step Three Quarterly Incentives
Step Seven Fall Annual Model Introduction
Step Nine Day at the Dealer


4th PILLAR - VETERAN INVOLVEMENT


Step Thirteen Profit Sharing
Step Fourteen Executive Vehicles
Step Sixteen GM Smartcare
Step Seventeen GM Card




www.GeneralWatch.com


: Introduction

This outlines the first twenty ideas for improvement. Many more exist; however, this illustrates the existence of rational, executable ideas. GM management complains of health care costs, retirement expenses and exchange rates while continuing their empty promises of new products, processes and restructuring. We all are aware of the repeated failures in the marketplace. These past decades of decline are attributable to GM’s failures in merchandising rather than these costs, which are, in truth, incidental to the real problem. Sales executives at General Motors don't understand marketing. They don't know how to sell cars. It's all about image and perception. A winning image in the marketplace can overcome product weakness, assuming the product is not glaringly inferior. Given today's relative equality of merchandise, my experience is that the presentation makes the difference.
Since 1997, after watching the missteps of GM management, I began developing a marketing plan specifically for General Motors. It uses proven techniques learned through decades of successful selling and sales management. In addition to retailing well in excess of ten thousand new vehicles, I have also studied the corporation's historical development. I've attended annual meetings since 1982 and hosted luncheon PowerPoint presentations on market share. As the nation's leading Buick salesman six times, and the General Manager of different GM stores, my success has been significant.

This year, for the fifth year in a row, I have been nominated for the Board of Directors. In support of that nomination, I offer a few of the ideas from The Plan – A Return to Greatness. I ask those of you who receive this to please keep the information confidential as to the specifics. Feel free to write and/or talk about The Plan's existence, but keep the details under wraps, as to not enlighten the company's competition.

Any plan is only as good as it's implementation. Having a successful outline is one thing, but if it is not put into effect in a logical sequence, the odds of success greatly diminish. Alfred Sloan, the architect of the modern GM, years ago instituted an idea called the Ten Day Report. The implementation of The Plan builds upon this idea. Once A Return to Greatness is announced, GM releases the first step. Subsequently, we issue another improvement in ten days, continuing a pattern of every ten days with another step. This will create anticipation and the image of leadership. The groups targeted for action will look forward to the next event, and come to understand that there is a purpose and direction emanating from the company. I will assume each of you will visit www.GeneralWatch.com where background information can be found, and a copy of the PowerPoint presentation detailing strategy and structure may be downloaded.


RETURN to GREATNESS


The Improvements

STEP ONE: Elimination of Destination Charges. "The Return" announcement proclaims, “If you want to pay freight, get a foreign car”. This is mindful of Iaccoca's proclamation, “If you can find a better deal, take it.” This worked for Lee, and showed his tenacity. He earned Chrysler respect and admiration by showing true leadership. He had gumption and people like that. It's an attraction. The problem with GM is that we are seen as softies, and losers. Taking a stance, and actually giving customers something easy to understand, and appreciate, will be a tremendous opening salvo. It will set the competition back on their heels, and let people know we are serious. This step begins our weaning process from the devastation of rebates. We can work towards effective net pricing, and earn goodwill in the process.

STEP TWO: Elimination of Mid Year Price Increases. Ten days after the original announcement, we release the next step. The deceptive practice of incremental increases only clouds the purchase process. Customers will perceive us as doing something positive and beneficial, rather than sneaky, and underhanded. We will earn more goodwill without any true expense.

STEP THREE: Quarterly Incentive Changes. No more pressure to buy now, hurry before it ends, only to be followed by another program. This repetitious process, which has been our norm, destroys credibility, and works against us in many ways. How many times has a customer purchased, only to have the rebate etc. increase the very next day? The effect of this goofiness has customers riding around in their new cars and upset that they just missed an opportunity. Let's create some stability, and simplicity, in the marketplace. Give customers’ confidence in their decisions, and provide the right amount of time to make informed choices. Give the customer the opportunity of ordering the vehicle of their liking, without worrying what the deal might be. Also, allow the retail personnel an appropriate amount of time to properly sell, and deliver, the unit. This would be preferable to slam dunking folks who are under the gun to meet a deadline, and who end up less than completely satisfied with their delivery process. Quarterly adjustments only make sense, and give the business a well-needed sense of order.

STEP FOUR: Destination Detroit. This idea brings all future award-winning dealers and salespeople to the Motor City. The benefits are countless. First, we would be more effective in focusing the meetings, and events, on the business at hand. Rather than desert tours and polo matches, we entertain showing Motown's finest offerings. Have the individuals tour Milford Proving Grounds, drive on the test track, witness a crash in order to illustrate safety testing, go through the Styling Studio and expose future designs. Allow them to meet with engineers, and see the inner workings of corporate headquarters. We pamper the spouses with our city's best services. At the conclusion, we send them back home ecstatic about GM, and Detroit. These actions would build goodwill for our city and company, and spread it throughout the country. Meanwhile, our executives can stay at home, which would be very good for their family lives, and our expense column.

STEP FIVE: Home Deliveries. We announce an effort of working with our dealers to bring to the customer the vehicle of their choice, directly to their place of employment, or residence. Most customers either dread, or dislike, the dealer experience. Offering this free service would further build goodwill, and lead to customer appreciation. I've made an entire career out of this offering. People absolutely love it, and this is responsible for more sales than anything I've ever done is. Once we begin this process, our competition will probably follow, but hey, we'll be seen as the leader for a change.

STEP SIX: Got GM - Get GM. It is a loyalty incentive that anyone can comprehend. If you currently own, or lease, a GM vehicle, you receive $1,000. It is stackable, and compatible, with any offering, transferable to family member at the same address. No goofy rebate if you own a non-GM car. Who thought of that one anyway? Why reward disloyalty, or have to ask customers if they own a competitive product? Let's only give something to those who already support us. If the customer is not eligible, oh well, next time they will be. The program should be renewed annually, and left in force all year.

STEP SEVEN: Annual Model Change. This is big. Sloan came up with this idea for a reason. It evened out the seasonal fluctuations in sales. Whoever got the bright idea to come out with a car whenever it's ready really did not understand the car business. How many of you remember the anticipation of the fall's New Model Introductions? Let's return to the regular release of new products after Labor Day, and return a sense of order to the business. These days we're selling three different model years side by side. That is very confusing and damaging. Some things should never change, and this is one of those things.

STEP EIGHT: Dealer Margin. We will let our retail partners know they have something to gain in our quest to regain share. For each full point of share we regain, we give the dealers another point of margin. They can use this additional margin to do more advertising, or salesperson incentives. They could increase levels of service, carry more inventory, hire additional staff, or retain extra profit. They are the ones with the investment, and best understand their local markets. Let them decide what to do with the money. Maybe multi-line dealers will see the benefit in moving our products, rather than those of the competition.

STEP NINE: Day at the Dealer. Each month, every salary member of VSSM would be required to spend one day in a randomly selected dealership service department, preferably in write up. This activity would build tremendous goodwill, and give our employees valuable insight into the customer's needs and wants. Actually getting to know GM employees would give customers a sense that GM has a face. They would begin to see us as human beings, rather than an impersonal Corporation. The dealers would benefit by having additional support in their service lanes, and be able to offer quicker, more responsive service on those days when executives were there to assist. Customer satisfaction would increase, as would repeat and referral business.

STEP TEN: AARP. This is a fantastic demographic, and another opportunity to simplify incentives. Make it a year-round program. If you belong to AARP, you get $500 off any GM product, buy or lease. Make it compatible with all other offerings, and leave it alone. People ask about it all the time anyway. They feel cheated seeing it after they've already made a deal.

STEP ELEVEN: Brand Merchandise: Include with each delivery a coupon for $50 off, or towards, merchandise from an affinity catalog. For each brand, have a booklet full of things such as shirts, sweaters, gym bags, coats, golf bags, etc. The end result would be people going to nightclubs and health clubs, churches and stores, sporting our logos, and providing us with free advertising. This activity is of a personal nature, and would do wonders toward building strong brand image and awareness.

STEP TWELVE: Auto Shows. Instead of the current practice of giving rebates to certain residents of surrounding counties, let's offer Auto Show tickets to those who test drive our products. This would bring people into the stores, and provide an inexpensive gift that would be remembered as the customers enter, and exit, the shows. We would be the good guys who gave them something concrete as the sponsor of their attendance. The gift could possibly be made to include early entrance, or access on special days.

STEP THIRTEEN: Profit Sharing. At year end, instead of giving our employees a cash award for profit sharing, give them the choice of common stock. Have them become true partners in the company's success. Owning stock would increase the employee perception that they are part of something, and would be more meaningful in the long term than a few dollars easily disposed of.

STEP FOURTEEN: Executive Cars. Quite often, GM executives turn in their factory demos for sale with the odometer just under the next price discount level. This practice is both frustrating and annoying. The inconsiderate action toward fellow employees, and retirees, is inexcusable and unacceptable. GM needs to announce a policy of driving the unit to the next mileage category whenever the driver is within say 250 miles of the next price break. How can the company promote unity when a few individuals think they are being cute? I've seen units turned in three miles short of the next discount, more than once. What does this do for morale?

STEP FIIFTEEN: Referral Savings Account. Similar to the GM Card (another crisis), GM announces a program to accumulate savings of $50 for each referral who buys, or leases, a new vehicle. The referral must be disclosed prior to delivery, and would be similar to what we commonly refer to as a birddog. The account holder could then cash the savings in at the time they take delivery of their own unit.

STEP SIXTEEN: Free GM Smart Care Maintenance Agreement to all GM Retirees. This 36 month/36,000 mile program would offer free recommended maintenance to all GM retirees. The benefit would be great in the number of customers brought in for dealer service. This group of people has tremendous purchasing power, and exerts a large amount of influence over their family members’ buying decisions, often contributing financially to the transaction. Also, increased showroom traffic by our service customers, would lead to increased sales to those individuals, and to others who feel more comfortable buying when there is heightened activity.

STEP SEVENTEEN: GM Card. This was one of the best programs GM ever had. That was until someone decided to take earnings away from eligible GM family members, and thereby alienate thousands of employee cardholders. Many people swore off GM for the move. Some form of retribution needs to be made. Consultations with the legal staff could result in some form of program to attempt to bring those lost, back into the fold.

STEP EIGHTEEN: Sales Guilds. For years GM had brand specific sales guilds. Now, everything is combined into the GM Mark of Excellence. It's a decent enough program, but there would be a greater impact if we returned to the old days of Buick Salesmaster, and the Chevrolet Legion of Leaders. These former groups built a sense of loyalty and awareness for each carline, and gave salespeople their own individual rankings within respectively common professions.

STEP NINETEEN: Direct Factory Communication: Imagine going to your local dealer and ordering a new vehicle. From that point on, you might receive a call from your salesman with an update as to the order status. Usually though, no contact is made until the vehicle arrives. Utilizing the internet, GM could send information directly to the customer, informing them of their order's progress at the various stages, including when the vehicle is scheduled for production, after it is actually built (including the new VIN), and the estimated shipping, and arrival, dates. This increased communication would lead to greater awareness and satisfaction, as well as anticipation.

STEP TWENTY: Reinstatement of GM Regional Sales Training Classes. Years ago, GM offered professional sales development classes at the Regional Training Centers. As one who attended these seminars, I can attest to the benefit of the experience. I learned many things that still contribute to my success, even to this very day. Who better than GM to train salespeople as to the proper way to present our products, and follow up with our customers? The manufacturer knows more about the product than anyone, and should be able to give competitive information beneficial to those who need it in today's hotly contested environment. I believe this is far superior to our current system of computer testing in order to fulfill merit award requirements. I'd say roughly half of the time today, savvy salesperson’s subcontract out their testing on the computer to those adept at answering multiple choice, and working online. This process sidesteps the purpose of giving our salespeople the information, which improves their competitive performance.

These twenty illustrations from The Plan are an indication of the kinds of marketing that will lead to a rebound in GM's sales. As you can see, there would be hardly any expense involved, and in fact, many of the ideas would actually serve to reduce costs. GM needs to get off of the fire sale, deal of the day, mentality. The full page, distress ads currently being run only harm image, and create a sense of desperation. GM needs to let it go, and save the dough. We spend tens of millions of dollars unnecessarily, including huge amounts for useless spokesmen, who bring nothing to the table. Additional steps in The Plan include things like further doing away with rebates. If there is a problem with day’s supply, don't increase the rebate. Instead, add a point, or two, to the residual value and have the image of a good car with a great lease, as opposed to a slow mover with a big rebate. GM needs to wake up and realize, as the book says, "Your Marketing Sucks". GM worries about health care costs and pension benefits, yet wastes untold millions in the name of marketing. To quote my friend Jerry Flint, senior automotive writer at Forbes magazine, "It's not that the leaders of GM are bad people, they're not. They just don't understand the American car business". He further states, "This business really isn't all that difficult, all it takes is a good car, and someone to sell it". This excerpt from The Plan – A Return to Greatness shows that this someone does exist. Articles about my achievements and ideas have been showcased in major publications such as The Detroit News and Automotive News. However, there is nothing better than a first hand look at specific examples and detailed explanations.

GeneralWatch News

Market Capitalization

May 2000 $66 Billion
May 2001 $48 Billion
May 2004 $25 Billion
May 2005 $15 Billion


Under the leadership of G. Richard Wagoner (Executive Vice President and President North American Operations 1994, President and Chief Operating Officer 1998, Chief Executive Officer 2000, and Chairman 2003) General Motors has closed, sold, or spun off:

Oldsmobile Hughes
Delphi Detroit Diesel
Defense Electronics Light Armored Vehicles
American Axle Electromotive
EDS and more!

In replacement we have:

Saab Disastrous Marketing
Daewoo Record Recalls
Shanghai (may work) Huge Long Term Debt
No Innovative Buicks Diminished Profits
FIAT FIASCO JUNK BONDS

In Japan, they fall on their sword for any of these failures individually. When added together, the real question appears. Who is RESPONSIBLE? Hardly anyone questions the BOARD, even with over 75% of the company’s value GONE in five years. The answer is The Plan, which calls for virtually no investment, and will, in fact, serve to significantly reduce expenses. The specific steps are based upon decades of successful experience as America’s top Buick salesman (six times). Here are sample responses from dealers, Wall Street analysts, marketing research companies, GM employees and retirees, and the media:

“I can’t thank you enough for sending The Plan. It is clear and logical. Implementation would be relatively easy and I have little doubt—based on our customer surveys—that such a program would be effective.” Art Spinella, CNWMR

“Frankly, your twenty points could not have made any more sense.” Gitas Jamekis, John Crane Inc.

“Wow, Jim, this is amazing. Some of these ideas might just work, by God. And Mark LaNeve dismissed this? I have looked at the website, and there is a ton of interesting stuff in there.” Dan Neil, Los Angeles Times

“Everything makes perfect sense in its appropriateness and simplicity.” Ed Garsten, Detroit News

“So, the legend grows.” Ed Lapham, Automotive News

“I think you hit the nail on the head.” Ed Wright, GM Plant Manager, retired.

“It is a blessing to hear your thoughts about GM. Being a Nissan dealer, I have watched the company do a 180 turnaround because of vision and dynamic leadership.” Ben Keras

“You remind me a little of the legendary Ed Cole.” Robert Harless, Preferred Media

“First of all, let me say that I think you’re doing everyone a great service.” Jason Stoddard, Centric

“Jim, just read your plan to return GM to Greatness. It all makes sense but how do we get the brass at GM to pay attention?” David Bruckman, Clay Matthews Auto Group

“Rick ran GMNAO directly for four years and indirectly for two more: what you see at GMNAO today is a direct result of his strategy and actions.” Gary Lapidus, Goldman Sachs

“I will gladly put your name on my proxy.” GMAC Branch Manager

“I think it is the best thing to have happen to GM.” Anonymous, Bellagio Resort

“Buickman – Who knows more about selling cars than just about anybody.” Jerry Flint, Forbes Magazine


James M. Dollinger
Founder GeneralWatch Shareholder Newsletter
Chairman
Dollinger & Company, Inc.
416 South State Road
Davison, Michigan 48423
(586) 914-BUICK (2842)
[email protected]





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[Guest buickman]

GENERAL WATCH NEWS

How many times did Edison fail before he saw light? What do we remember...that he succeeded.

Years ago, a banking organization named Morgan thankfully had enough experience in building railroads and steel companies that when this auto industry came along, they saw the wisdom of a good plan. It was called "The Organization Study". It had been prepared by Alfred Sloan and presented to Billy Durant, our great founder, who was otherwise preoccupied. When Durant lost control for the second time in 1920, Pierre duPont, who had invested heavily in GM, read Sloan's plan, and together with JPM, decided to put Sloan's study into effect. The rest is history (See "My Years With General Motors").

Luck is preparation meeting opportunity.

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--- [This E-mail scanned for viruses by Declude Virus] Edited December 3, 2005 by buickman

[razoredge]

I can find items in there that I think are less important than others........but what about the important ones ? There has been many post here and elsewhere about disatisfaction with dealerships or sales approaches, pricing, rebates, not to mention perception.

No I dont think this is the entire answer but how much could it help ? What could some of it hurt ? Theres a few things there I wouldnt bother with, I admit.

in regards to the last few paragraphs - I am curious as to many, many of GM's business decisions, not that Ive heard anyone else wonder or question them :rolleyes:

edit : in case I havent said it in a few post - I still believe the health care industry totally needs to be curbed, possibly beaten, yes indeed they may actually be to the point of deserving a good firm beatin'. This includes abusers of the system as well, that includes the legal profession and their scam artist partners in crime.


but then what would make the world go round ? Edited December 3, 2005 by razoredge