In earlier postings I have argued for GM to revive their Saturn experiment -- or let someone else (who would be more committed and supportive) take it over. Today's New York Times is running a story -- With Saturn, G.M. Failed in a Makeover Attempt -- that describes how GM effective undercut Saturn:
True believers in Saturn insist the concept behind the division, which stressed respect, teamwork and communication from the factory floor to the auto showroom, could have kept G.M. from losing nearly half the market share it held when the first Saturns went on sale 18 years ago.
“I’m absolutely convinced that the Saturn way could have worked,” said Michael Bennett, the original U.A.W. leader at Saturn. “But what we had was never embraced or adopted.”
Mr. Bennett, like many others, can point fingers to explain why Saturn fell short of its promise.
Mr. Bennett blamed a lack of interest by G.M. executives who succeeded Roger Smith, who as chief executive in the 1980s committed $5 billion to begin Saturn.
But those who followed him — including John F. Smith Jr., who became chief executive in 1992, and G.M.’s current chief executive, Rick Wagoner, who ran its North American operations in the 1990s — had bigger worries.
They had to lead the company through the financial turbulence at G.M. in the early 1990s. And with managers at G.M.’s other, older brands begging for investment, G.M. executives declared Saturn would have to prove it deserved more support, even though its small cars were accomplishing their main goal of winning buyers from imports.
Despite G.M.’s pledge that Saturn would be run as a separate company, with its own car development and purchasing operations, it was folded into G.M.’s small-car operations in 1994, and its lineup did not receive any new models for the next five years.
While executives were souring on the concept, U.A.W. officials questioned the consensus approach at the Spring Hill plant, where G.M. set up a consulting arm that taught other companies how to adopt Saturn principles with their employees.
Fearful that the division might not survive, Mr. Bennett devised a proposal to spin off Saturn as a separate business, but was told G.M.’s board would not consider the plan.
In 1998, Mr. Bennett was voted out of office at the U.A.W., and workers eventually chose to abandon their separate contract.
Since then, Saturn’s lineup has shifted from small import fighters to a more conventional G.M. division, with cars from G.M.’s Opel division, crossovers and the Vue, a small sport utility.
In other words, during the years of the SUV, GM chose to follow the market rather than lead it. And when that market collapsed, now they come to the taxpayer for help. I don't know if this was failure of strategy, failure of vision or failure of the market. But in any case, it is a classic example of reactive rather than proactive management.
So let me repeat my earlier suggestion: use some of the auto bailout money to set up Saturn as an independent company. Let' bet that someone else, besides the big GM bureaucracy with apparently a thousand other things on their minds, can make this business model work.
"[D]uring the years of the SUV, GM chose to follow the market rather than lead it. And when that market collapsed, now they come to the taxpayer for help. I don't know if this was failure of strategy, failure of vision or failure of the market. But in any case, it is a classic example of reactive rather than proactive management."
Even Porsche fielded an SUV. Porsche, a sports car maker, of all things! Honda and BMW also brought forth SUVs. Had GM steered away from SUVs instead of embracing them, that Detroit carmaker would have financially crashed in the 1990s.
About the only thing GM's decision to move heavily into the then-profitable SUV market can be faulted for is that the SUV market wasn't so profitable that it could finance GM's buying its way out of the non-economic barriers to long-term health put up by national and state legislatures, unions, and a myriad of interest groups.