By Kevin Meyer
30 months ago… yes 30, we told you about GM's love of the top line – sales – as opposed to what truly matters. Don't underestimate the impact of such a focus as it has lead to such inane distortions as booking a sale when a car is shipped to a dealer, as opposed to when a customer actually buys it.
Those of us that have started small companies soon realize
a very important fact: you can sell yourself right out of business.
And sales mean squat if
they have negative margin. Perhaps GM needs to look in the classifieds in the back
pages of Entrepreneur magazine to find an executive staff with some
fundamental business sense.
Well, 30 months of decreasing market share, increasing losses, a government bailout resulting in a complete shuffling of management and board members, and even an Evolving Excellence post pointing the way hasn't changed that flawed mentality.
lose the No. 1 spot in U.S. sales and has charged his management team
with regaining market share after years of decline. Edward E.
Whitacre Jr., in an interview Tuesday after the company's first board
meeting since emerging from bankruptcy in July, said GM's business plan
needs to be "tweaked."
"Tweaked?" Are you serious? Completely demolished and rebuilt from scratch should be more like it. How about completely forgetting about the top line and creating the tiniest of focus on the bottom line? Then perhaps figuring out that more goes into improving the bottom line than bashing the crap out of already teetering suppliers, laying off thousands of brains under the mistaken assumption they are just a pair of hands, and… well, you get the picture.
GM has a lot of work to do. Far more than a "tweak." Once again I'm very concerned about my unwanted investment in GM.
Dan Markovitz says
Plus ça change, part 2!
Isegoria says
If your business is levered up as far as it can go — operationally and financially — then increasing your top line may be the way to increase your bottom line. Aren’t most of their costs fixed after all?
Kevin says
Uh, no. You still have to make money, and top line alone will not do that without focus on value-reducing activities that lie between the top line and bottom line.
Dave says
Kevin,
As a GM employee, we know we can’t cut our way to success. Bankruptcy has driven us to get our cost in line. Now to stablize and increase sales is part of the equation.