Word: gm
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Dates: during 1990-1999
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BARELY A WEEK AFTER NEW CEO JOHN F. SMITH Jr. pledged to make General Motors profitable by the end of 1993, his mission appears even more impossible. Most troubling, GM could now face untold costs in settling liability lawsuits relating to fire hazards in its Chevrolet and GMC pickup trucks, 5 million of which are still on the road. Newly released internal documents indicate that from 1983 to 1987, GM recognized but failed to correct a design flaw that exposed side fuel tanks during crash impacts, allegedly causing about 300 deaths...
...laboratory for organizational change at GM is supposed to be its built- from-scratch Saturn division, but so far the results have been mixed. Saturn's long and costly gestation -- it took seven years before the first model rolled out of its Tennessee factory -- drained $5 billion from other car projects and stirred anger and envy within GM ranks. And Saturn's special status as a stand-alone company within GM has created a snooty attitude on the part of its dealers toward the turmoil in Detroit. "Most of our customers don't know who makes the car," says...
...division has yet to make money for the company, in part because GM reportedly sells the car at a loss to build up its market share. All told, Saturn ran a deficit of $1 billion last year, according to U.A.W. estimates. But Saturn has in abundance what many of GM's other products so desperately need: prestige. The upstart division's high-quality products have proved so popular that customers have to put their names on waiting lists. If Saturn can translate its popularity into profits, the formula could help save the rest of the giant company...
...large corporations like GM often stubbornly resist change, as underscored by the crises now gripping such American giants as IBM, Sears and < Citicorp. "Big organizations that last a long time are usually very conservative, like churches or armies," Womack says. Their size usually helps them forestall change for too long, so that when the forces finally become irresistible, the upheaval resembles the centrifugal breakup of the Soviet Union...
...GM's case, the company that once bestrode the world now has trouble paying its bills. "We wasted too much time and money, and we're finally down to the point where it's nip and tuck," says a senior GM executive. "To me, the sad part is, Couldn't we have done it any other way?" Apparently not. But besides cutting costs, GM must now focus its attention on something the company has too often seemed to forget: how to build cars, trucks and vans that more people are happy to pay money...