Word: gm
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Dates: during 1990-1999
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Rather than simply demanding that their key suppliers cut costs overnight, as GM is now doing, Chrysler enlisted supplier support to make design and engineering changes that would add value and boost productivity. As a result, Chrysler's parts suppliers have turned in 3,900 suggestions that have saved the company an estimated $156 million in production costs...
Iacocca plans to retire in January, at age 68, but he will leave behind a noticeably happy family at Chrysler. Last spring he chose as his successor Robert Eaton, the chief of GM's successful European operations, which rankled some Chrysler insiders at first but has produced a smoothly working triumvirate that includes the former heir apparent, president Robert Lutz. Iacocca sees the upheaval as a positive force. "We do run better scared," he says. "When we have trouble, we're used to that. That has been the beauty of Chrysler for 50 years." While Chrysler still has $15.9 billion...
...changes in GM's bottom line were nothing compared with the changes at the top. After months of bitter skirmishing with GM's board of directors, chairman and CEO Robert Stempel finally quit. It was Detroit's bloodiest boardroom drama since Henry Ford fired Lee Iacocca in 1978, and it marked a turning point for the once mighty U.S. manufacturer now struggling to reinvent itself...
...most provocative of Smith's lieutenants is J. Ignacio Lopez de Arriortua, the director of worldwide purchasing, who reportedly has been handed the assignment of reducing GM's supplier costs at least 20%, or $100 million a week. Lopez, 51, a veteran of GM Europe, has become known as "the Grand Inquisitor." In only four months, he has rankled many of GM's leading suppliers by reopening existing contracts and dispatching his teams of subordinates through supplier factories to preach productivity in one-week workshops. Lopez says he has already transformed more than 100 of GM's 2,500 suppliers...
...that point everyone agrees. Lately, GM's products have earned high marks for quality. But the company desperately needs to make them more cheaply and sell them more effectively. The automaker's U.S. market share dipped to less than 31% last August, down from 45% in the late 1970s. Sales of Chevrolet and Oldsmobile models have sagged most dramatically, slipping 13% and 9% respectively since last year. If the economy remains stuck in low gear during the early 1990s, price competition is likely to remain fierce, and only the low-cost producers will make money. For GM's top managers...