I'm a designer in Michigan, with friends in the automobile business. I have observed the mismanagement of the American car business through my adult life as the executives in Detroit made mistake after mistake and frittered away market share. A great example was when GM started Saturn. For the same investment at the time, they could've purchased Toyota (you know, the guys who are bigger than anybody now, with brands like Lexus and Prius). I also have some experience working at Herman Miller, one of the most admired companies in America, by virtue of innovative product development, and progressive employee relations such as employee stock ownership and executive compensation linked to factory worker compensation.
Here's a proposal for fixing GM and charting a course for the future of companies like GM.
There are 565 million shares of GM stock. Yesterday, the stock traded under $2 per share. Think of that for a second. GM, with it's countless assets, it's considerable intellectual property, and it's legendary brands could be owned for $1.1 billion, or controlled for under $600 million. This is a pittance compared to the money controlled by the UAW pension fund.
The UAW can and should buy GM.
As an employee owned company, labor and management would engage in a cooperative arrangement, rather than an adversarial one. Imagine a situation where the guy on the line is invested in producing a quality car and reducing waste and maximizing profit and paying attention to the community. Imagine a situation where the guys around the board room table are being evaluated by the guys on the line. Would those board room guys still have chauffeurs who drop them off at their heated garages adjacent to their luxurious offices to dine for free in their wood paneled private dining room? Imagine a situation where every employee brings every ounce of his or her creativity and thoughtfulness to the job, and feels empowered to contribute it to the mix. Where every employee is a watchdog for making the enterprise work.
I'd like to work at that place. I'd like to invest in that place.
The UAW is inextricably connected to GM. The UAW will lose big if GM fails. Instead of just watching things unfold, why not actively create a situation where the UAW and its members win big if GM succeeds?
Why not take charge of this situation, install some competent leadership and fix this mess?