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Finger-pointing is unproductive for automakers

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Finger-pointing is unproductive for automakers

BY MARK PHELAN

FREE PRESS AUTO CRITIC

Toyota executives had few less-sympathetic moments in their congressional testimony than when they responded to lawmakers' questions by saying that decisions on engineering and recalls are made by the home office in Japan.

It was the corporate shuffle at its finest, a patently insufficient response from a company that regularly sells more than 2 million vehicles a year in the U.S.

It should also be a learning moment for General Motors' leaders as they strive to repair the company's vital Opel brand in Europe.

Bad decisions made in a distant HQ can cripple a thriving business. Toyota is learning that now.

GM should have learned that lesson years ago. Opel has frequently suffered from Detroit-centric decision-making. GM must alter that mind-set to restore Opel to its historic profitability -- and to win loans desperately needed loans from European governments.

Opel's workers are afraid the company will be crippled by product and investment decisions made by Detroiters who don't understand or care much about Europe. German politicians say they fear GM will siphon German tax dollars back to the company's U.S. operations.

Both arguments betray a basic misunderstanding of how a global automaker should function: It must be strong in all parts of the world. You can hardly blame the Europeans for being skittish, though. GM's U.S. management has frequently made the same mistake.

Opel had its greatest sales and financial success when Detroit paid the least attention to it, the brand's jingoists argue. There's some truth to that, but it overlooks the inconvenient fact that Opel would not exist if GM hadn't bailed it out at least three times: in the 1920s when the whole German economy tottered, over the last decade with $10 billion spent to keep Opel, and now, when some of GM's first post-bankruptcy cash flowed to Opel.

There's an equally irrational temptation for Americans to belittle Opel supporters' fears as irrational whining, as if GM has always been the benevolent American uncle. They forget that multibillion-dollar Opel profits propped up GM's ailing North American wing for years in the 1980s and '90s. They also overlook the fact Opel's decline in the last decade did not stem solely from its own missteps. American-led decisions left Opel behind the competition in key technologies like diesel engines.

At the same time, Opel employees would sometimes shrug off their problems as beyond their control: Detroit's fault.

That cycle of finger-pointing must end. This is GM's problem. GM needs a solution that works on both sides of the Atlantic.

Opel chief Nick Reilly, an Englishman, seems to understand that. He has pledged that Opel will have control of key decisions. Among the first was his promise to plug the minicar-gap in Opel's lineup. Europe's other leading manufacturers moved into that growing segment years ago. Opel sat it out and lost sales. Reilly says that will change.

Opel management and workers must also recognize that they need GM's global technical prowess and volume. GM's corporate leadership must realize that Opel requires the freedom to respond to European market trends even if they seem odd to American tastes.

Opel does not exist to prop up GM's U.S. business any more than Buick exists to strengthen Opel. Opel and GM North America must both be organized around two goals: Making money at home and making GM a strong global automaker.

"Those decisions are made at corporate HQ. I'm not responsible," didn't wash when Toyota executives addressed Congress. It won't work as GM rebuilds Opel.

link:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100307/COL14/3070461/1210/BUSINESS01/Finger-pointing-is-unproductive-for-automakers&template=fullarticle

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