Finally!

After being the role model of the worst leadership practices for a decade, finally, inept and incompetent Rick Wagoner resigns from the top position at General Motors.

The some time best vehicle manufacturer in America faces hard times no doubt. The worst part of this news: Wagoner still receives about $20 million compensation for his outrageous performance.

Losing money for each produced unit for the last few years, GM was corroding from inside while the bosses lived an irresponsible fantasy of wealth and millionaire bonuses.

The auto maker will now likely have to rise from its ashes…

The News:

New GM CEO Fritz Henderson's first press conference yesterday generated a great deal of coverage on TV last night and in this morning's papers. NBC Nightly News (3/31, lead story, 3:20, LeBeau) reported, "The new CEO says it is probable GM will remake itself in bankruptcy." Henderson said that "the automaker is preparing for a complete overhaul." The CBS Evening News (3/31, story 7, 2:05, Couric) reported Henderson said bankruptcy "is more likely than ever. And he'll need to shut more plants to meet the White House demand that the company get leaner and meaner." Henderson also "admitted today the company's facing a crisis with consumers."

Hello? Is this news at all?

I can still remember the 50s of the past Century when Chevy’s were the representation of beauty and efficiency. Today, I live in a smart neighborhood complex with about 130 homes and just out of curiosity counted last night the more than 120 vehicles parked. Only 9 are GM brands and a total of 17 were made by the “big 3” as some still call them.

So, what happened?

We have frequently written in our websites about the mindset change companies’ leadership teams need to undertake if they want to succeed in today’s competitive world.

The following comment comes as no surprise to me:

Ollis Lee Perry 3rd comments in BusinessWeek - March 29, 2009 07:26 PM:

“I have been employed at the Fort Wayne truck & bus plant in Indiana for over 15 years. I am an hourly worker, and hold the job title as a team leader. We build the world class Chevy, and GMC pick-up-trucks of the future. I wish I could say that I will miss Mr. Wagner as my CEO, but I never remembered him visiting with the workers at the world’s number one truck plant. I found it strange that since we are economically the most cost effective per vehicle to produce a truck that I never seen Wagner (Wagoner’s) presence. It's very deserving that Fort Wayne assembly be awarded the funds to become a flex plant, because the people there worked so hard to make Fort Wayne assembly number one in nearly every category.”

Companies need to steer away from “business as usual” and face a fact:

“The World Has Changed”

The Global Economy is literally hurting and GM must restart fresh. The only way experts see this happening is by going into a Bankruptcy process, where they will be able to totally renegotiate their relationship with a typical Union that has put an unbearable load on the employer, as many of those obsolete and unnecessary organizations do, even after "giving up some unsustainable privileges." Then the Leadership team needs to switch gears, get in touch with reality, talk with their people, learn from them, and establish an authentic Lean Manufacturing Implementation. Lean Thinking needs to become a Culture in the company. They have tried but not seriously enough to follow the steps of their successful Japanese competitors. One of the reasons for failing to do so is the requirement for a humble approach. Arrogant teams can't implement Lean. It will require a true commitment to achieve that and get back into business. Actually in the current situation many companies will have to do just that in order to survive.

Read: "How Detroit Drove Into a Ditch"

With our 3-day 12-hour “Management Through Leadership” program we provide the essential training on Change Management and on Management Change, and also draw along with you a proven basic strategic plan. We can do it in person or via Video-Conference. Email us NOW!

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