The Detroit Three car companies, and all companies for that matter, are taking sometimes draconian steps to cut costs. Some examples:
Over the past several weeks, engineers and technicians working at General Motors Corp.'s sprawling proving grounds west of Detroit started noticing a
curiosity: an increasing number of wall clocks had the wrong time, or
stopped working altogether.
The reason: As part of a drive to cut $15 billion in costs, GM is no
longer keeping the 562 clocks in working order, which will eliminate
the expense of replacing and disposing of the clock's batteries and the
cost of resetting them twice a year for daylight-saving time.
Ok, it sounds like a rather incidental cost. But is it the right focus? Instead of leaving 562 clocks hanging on the walls eventually showing 562 different times, how about seeing which ones are really necessary and removing the ones that aren't. If a clock is really necessary, then allowing its timekeeping to lapse probably creates more waste than the savings generated by not servicing all the other clocks. How much time is now wasted when people show up to meetings late?
In its Renaissance Center headquarters, employees working late have to
climb stairs when navigating its labyrinth of lower floors — the
company now stops the escalators at 7 p.m. In designated cleanup areas
of certain offices, the company has changed the type of wipe-up towels
it buys. In a memo to employees, a staffer explained this will lower
GM's "cost per wipe."
I'm not going to get into a "cost per wipe" discussion. Let's try some more.
work force by approximately 10%, and is trimming its capital spending,
manufacturing, information-technology and advertising costs. GM and
Chrysler have both halted or slowed work on new vehicles to cut
development expenditures. Neither company held news conferences at the
Los Angeles Auto Show last week, a standard function at such shows.
Perhaps some good savings, but again, are they the right focus? Whacking 10% of your knowledge and training investment? Reducing the ability to be competitive when you come out the other end of the tunnel? Basically ensuring you'll always have vehicles that lag behind competitor technology?
That's a good savings. We've often discussed the waste of awards, and this is a good example. Plus, is receiving a "mark of excellence" from a company like GM really something you want?
union committeeman, said he recently had to tell workers they would
have to wait until at least next year to get $270 stipends they were
promised in order to buy T-shirts, hats or coats emblazoned with their
Another good one. $270 for logo gear? Per employee? That's nuts. Instead they should charter a flight to American Apparel in LA, give them a tour, and give them a few minutes to shop at the AA company store. They might learn something about how to manufacture efficiently from this growing underwear and t-shirt company.
that GM spokesman Tony Sapienza said saved something like "a million"
dollars. Now, the only way to get union representatives or officers on
the phone is to catch them at their desk or station. Recordings that
used to say, "please leave a message," now say "please call back."
"It's all good business practices, but now it's extreme business
practices to the point where we're not wasting anything," Mr. Sapienza
said. "We're cutting to the bare minimum."
So now it will take longer to get questions answered, to find solutions to problems, and to resolve issues. Instead of a quick phone call you'll have to go wandering around a million square foot factory. Yep… there's some savings…
frozen in time, GM has switched to regular Ticonderoga No. 2 pencils
instead of the more expensive mechanical pencils that used to be freely
available in storage closets, known in GM-speak as "pull stations."
I'll give them that one as well, although I'm betting that the "pull station" is the closest GM has ever come to a "pull system."
A focus on savings, even tiny savings, is great. Everyone should always be on the lookout for waste. But superficial savings can sometimes create deeper waste. And how about taking a few steps back and looking for the real big wastes… such as building cars that no one wants just to keep factories humming…
Perhaps they can use some of those bailout billions to get their clocks back on time… while still manufacturing the same old way.