Back in the good old days, General Motors was often run by a person with an engineering degree and a solid background in manufacturing. Today, that's how it is at Toyota, while GM is run by a finance guy. Maybe that’s why Toyota just topped GM in worldwide sales.
It’s hard to pick up a newspaper or log onto a Web site these days without seeing some kind of dire news concerning General Motors Corp. (GM, Detroit). For instance, the company just announced that it’s reducing head count and scaling back on truck capacity. It also is reducing sales and marketing spending, while “holding” engineering spending.
Recently, I spent of lot of time delving into the giant automaker’s past, present and future while preparing ASSEMBLY’s special GM centennial coverage. The articles appear in the July issue of the magazine, with additional material available on our Web site.
We devoted the space to GM because the automaker has a unique manufacturing heritage. For most of the 20th century, the company ranked as the world’s largest manufacturer. Engineers at GM pioneered many different production tools and techniques, such as the use of interchangeable parts, annual model changeover and flexible assembly lines, in addition to robotics, machine vision, programmable logic control, automated material handling and computer simulation.
However, I wonder if GM will still be around in another 100 years. The company missed the boat on recent trends such as hybrids and small cars. Of course, it has survived other blunders in the past, such as the ill-fated GM10 debacle in the mid-1980s, which cost $7 billion and has been called “the biggest catastrophe in American industrial history.”
I wonder if those same “mistakes” would have happened under the watch of a CEO with more of an engineering or manufacturing background. The current head of GM has a background in finance. Shouldn’t the leader of a manufacturing company be required to have experience on the plant floor? At least that’s the way it was back in the good old days.
Some of GM’s great leaders of the past had tons of experience working close to assembly lines before they moved into the corner office. For instance, Charles Wilson held an engineering degree and served as vice president in charge of GM’s vast parts manufacturing operation during the 1930s. Before joining GM in the early 1920s, William Knudsen established a reputation as a production whiz at Ford Motor Co. (Dearborn, MI). He later transformed GM’s assembly lines into a formidable powerhouse that toppled Ford’s supremacy. Even the legendary Alfred Sloan had a degree in engineering.
At Toyota Motor Corp. (Nagoya, Japan), most of the top executives have engineering and manufacturing backgrounds. They also have a vested interest in monozukuri, which refers to the art of “product manufacturing” or “making things.” Toyota’s last few CEOs had strong roots in manufacturing.
Is that a mere coincidence? I don’t think so. Perhaps that’s one of the reasons why Toyota topped GM in worldwide sales during the first half of 2008.