Well, GM is in the news again, this time for refusing to cancel its program that gives a company car and company-paid gas for about 8,000 white-collar employees. It's almost too easy to work myself into a righteous wrath over a perk that costs the company $12 million a year, at a time when GM has already received $13 billion from taxpayers and is looking for $16 billion more. But in the grand economic scheme of things these days, it's pretty much a rounding error.
GM claims that the perk, which is formally called the "Product Evaluation Program," is an important tool to improve vehicle quality, because employees can immediately report problems. But Walter McManus, a former GM economist during most of the 1990s, questioned the program's value:
Okay, so we've got some waste here: a program that certainly costs money to administer but doesn't do a damn thing to benefit customers. But to me, the real problem with this program is the way it isolates GM executives from the reality faced by its customers. The principle of genchi genbutsu ("actual place, actual thing," where "gen" means "actual") is designed to ensure that workers (and especially) managers get out their bubbles and see the reality of a situation. Yuji Yokoya, the Toyota chief engineer for the 2004 Sienna minivan is legendary for driving 53,000 miles around North America while developing the minivan, all in an effort to experience the reality of the US market.
You'd think that it would be easy — even unavoidable — for GM execs to experience the "actual thing" faced by their customers. All they need to do is simply drive their cars — you know, to the store, to work, back home — just like their customers. But leave it to GM to keep their execs in the bubble. What's the long term effect of these twice-yearly free cars twice and free gas? After all, if you're getting it for free, can you really understand what it's like for a consumer to own an SUV that gets 9 mpg when gas costs $4 a gallon?
Somehow, I don't think that the inability of gas pumps to register over $100, and the extra effort of the double swipe was the biggest problem facing consumers last year. When you're getting the car and the gas for free, you're not really experiencing the "actual" anything.
So, given the cost and questionably utility of this program why not end it?
Ah, now I understand: 8,000 execs who are high enough up the corporate food chain to warrant (and I intentionally don't use the word "merit") free cars and gas can't afford to drive to work? Do they really make so little money that they can't afford to pay for the commute out of their own pockets? Did they really "build their lives" and choose where to live based on the assumption that they'd have free cars and gas in perpetuity? Are they really that asinine? If so, that explains an awful lot about how they can so seriously, and so regularly, misunderstand the customer.
Leave it to GM to take the "gen" out of genchi genbutsu.