If you are looking for a good read at the beach this summer, pick up Bob Lutz’s new book , Car Guys vs. Bean Counters (Penguin Group, 2011). After holding top exec positions at BMW, Chrysler, and Ford (but never reaching the CEO spot) , Lutz joined GM at its depths, in 2001, convinced he knew exactly what a car company should look like. Despite Lutz’s strongly inflated view of himself (he compares his style to Jobs, Gates, and Branson), he has written the best book about the auto industry since Iacocca, in 1984.
Car Guys vs. Bean Counters contains some fascinating views of GM during the past decade that you might want to use in your OM class. For example, Lutz writes: “The operations portion of the automobile industry has been thoroughly optimized over many decades, doesn’t vary much from one automobile company to another, and can be manged with a focus on repetitive process. It is the ‘hard’ part of the business and requires little in the way of creativity, vision, or imagination. There is little or no competitive advantage to be gained by ‘trying harder’ in procurement, manufacturing, or wholesale”. I have to wonder if Toyota and others would agree with this assessment.
What does separate the winners from the losers, according to Lusk, is the long-cycle product development process, which still takes GM about 3-1/2 years from initial idea to 1st off-the-line. In the book, he notes how GM cut corners in some ways and wasted effort in others. He makes public for the 1st time the “hider” technique GM used on interiors, where plastic corners were rounded so customers would not notice misalignments.
My favorite story is about the Outside Speaker Effectiveness Analysis Group, which rated guest lecturers who came to speak at HQ. One well-known speaker received this letter after giving a talk at a GM conference: “The five ‘outside speakers’ average scores ranged from 5.25 to 8.25. Your average was 7.35. Your standard deviation was 1.719 and ranked 2nd among the variances”. Maybe more time on OM could have saved GM from near-destruction.