Word: gm
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Dates: during 1990-1999
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...chairman Smith's radical cost cutting, which removed 137,000 workers from the payroll, and his $50 billion investment in retooling will eventually pay off for the company. More important, his huge reorganization of the company in the mid-1980s is finally creating some cooperation between GM's far-flung divisions. One major change has taken place in its Automotive Components Group, a $33 billion operation. Because the companies in the group (examples: Harrison Radiator, Packard Electric, Inland Fisher Guide) were captives, there was traditionally no incentive for them to offer competitive prices. GM now insists that its parts makers...
...company's most dogged problem is its image among consumers. Admits president Reuss, with a candor uncharacteristic of GM's inner sanctum: "In the early and mid-1980s, we let a lot of people down. We disappointed customers with some of our products' quality, reliability and durability. And as we were going through the change from rear-wheel drive to front-wheel drive, we had too many cars that looked alike...
...GM cars have improved vastly, but most car shoppers don't perceive it yet. While GM still lags behind most Japanese manufacturers in overall quality, its cars have 53% fewer defects than they had only five years ago, a fact the company is just beginning to tout in its advertisements. Some of GM's car lines actually beat the Japanese. Buick, for example, ranked fifth in the most recent J.D. Power survey of initial quality, placing the GM division ahead of Honda, Nissan, Acura and BMW, among others. The Buick LeSabre model placed ahead of the Acura Legend, Honda Accord...
...heart of the issue is consumer trust, which the Japanese have deservedly won and GM now has an opportunity to win back. Inspired by Saturn, GM may be able to turn the once derogatory epithet "domestic" into a true competitive advantage. "The Japanese have been worried about this for some time. It scares the liver out of them," says David Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan...
...Saturn succeeds, then the message to the rest of American industry will be unambiguous. The American work force, often and unfairly maligned as the cause of U.S. competitive woes over the past two decades, can compete with anyone if managed intelligently. GM's smaller U.S. rivals have already adopted some of the progressive techniques employed at Saturn. Ford, which is using Japanese-style team systems at many of its plants, has already improved so much that its efficiency matches that of the average Japanese plant in Japan. Chrysler's best factory, in Sterling Heights, Mich., is nearly as efficient...