AP’s Tom Krisher penned a story last week titled GM, Ford at Different Stages of Recovery, where he proposes that GM is further along the transformation path than Ford.
The essential difference between Ford and GM, according to some industry analysts, is that GM went into the tank first and is ahead in the restructuring game. "I consider Ford to be in crisis and GM to be in transition," said Gerald Meyers, a former chairman of American Motors Corp. who now teaches leadership at the University of Michigan. "The future is not clear yet at General Motors. There is a future. It’s just a matter of how much and when, and that’s a big step ahead of Ford."
Far be it for me to criticize a former chairman of AMC… we know how successful they were. Or at least those of us that go back that far. I can understand the superficial rationale of GM hitting bottom first while Ford just announced rather phenomenal losses, but that isn’t the only criteria when evaluating turnaround efficacy.
But the Dearborn-based company [Ford] doesn’t have the momentum that GM has, said Rebecca Lindland, an auto analyst at Global Insight, an economic research and consulting company.
"The biggest difference is GM is on track. They have a mission. When I talk to the people there, when you see the products, you get a feeling of confidence and empowerment," she said. "With Ford, all we hear about is conflict, turmoil, uncertainty. Internally this is at all levels."
Ok, so now we have anecdotal evidence of the beginnings of a culture change at GM. A "feeling of confidence and empowerment"… perhaps similar to that felt by the troops on the eventual losing side of World War II? Don’t worry, the analogy ends there. I guess having a positive-minded set of troops is better than the alternative, so I’ll let this slide.
Meanwhile, Ford is "conflict, turmoil, uncertainty." Is that necessarily a bad thing? I would be more concerned with a company that was "complacent, steady, overconfident" to use just one set of antonyms. In fact, we’ve written before about the Toyota culture, which has a presumption of imperfection. That type of stress can be good, and the fear of a cataclysmic industry or market disruption is often what drives the most successful lean manufacturing efforts. Change is hard; you have to really want to change… or be scared into doing it.
A lean transformation takes real leadership, and that’s where we see a wide disparity between Ford and GM. On the Ford side we have CEO Alan Mulally who came from Boeing, a company with a very strong lean program. We have some problems with Boeing’s offshoring practices, but much of that is driven by political necessity. Bottom line is that he understand lean, and just recently visited archrival Toyota with VP Mark Fields.
At a private dinner on Wednesday, Ford CEO Alan Mulally told journalists that the recent visit he and Mark Fields made to Toyota’s headquarters was born out of a desire to understand more about the Japanese automaker’s manufacturing and product development processes, which Mulally holds in very high esteem. He went so far as to refer to Toyota as "the finest machine in the world, the finest production system in the world," adding that "we (Mulally and Fields) went to study with the master."
How many CEO’s do you know that would visit a competitor and then hail them as being the best? And it says something about Toyota that they welcome a competitor, and they are well-known for helping teach other companies, and even competitors, how to manufacture better.
Then we have GM. CEO Rick Wagoner has an obsession with being number one… number one in sales, not in profits. So much so that he’s considering an investment in an unprofitable Malaysian automaker simply to keep total vehicle sales bragging rights in GM’s court.
So on one side we have Ford with a leader who understands lean and is willing to visit the best in the world to learn, with a stressed workforce that is in the middle of tumultuous change. On the other side we have GM with a confident workforce and a "leader" who is investing in unprofitable companies to maintain an egocentric metric that has no relationship to long-term success.
Which company is really ahead?