Note to GM, Relevance is Good Business

There were two big stories in the automotive industry last week. The first, highly anticipated for months if not years, was the bankruptcy filing of General Motors. The second story, which is not getting nearly as much media attention, is that Toyota Industries announced the launch of the Geneo-Hybrid, the world's first internal combustion, hybrid lift truck.

The Geneo-Hybrid combines a 2.5-liter diesel engine, electric motor, and nickel-metal hybrid battery to reduce fuel consumption and CO2 emissions by 50%. Toyota sold 193,000 lift trucks in 2008, and this new version will most likely sell a great deal more over the coming years. Toyota launched the Prius, the first mass-production hybrid car, in 1997, and has sold more than 1.7 million worldwide.

Unfortunately, since then General Motors has brought America the Hummer and other large variety vehicles. The Hummer isn't the only reason for the company's perilous condition, but the mindset of the corporate culture in the auto industry is. While other automobile companies struggled to find ways to stay relevant, GM did not. And now that the federal government owns a majority stake in the automaker, it will be an interesting case study to see if the company can make its way out. (It's not like the U.S. has a great track record in running companies or quasi-public/private companies--AMTRAK and our Postal Service come to mind).

This never had to happen, at least not in such a dramatic fashion. It wasn't as if Toyota was working in stealth mode and all of the sudden dropped the Prius on our shores. Toyota's long-term strategy for bringing energy-efficient vehicles to the market is apparently working. Now they've moved into heavy lifting and, most likely, other markets as well. Maybe General Motors can take a page from Toyota's playbook and come back to life with new purpose and relevance. Now that would be good for America.

Jonathan A. Schein is the publisher of MetroGreenBusiness.com and GreenBusinessCareers.com

Comments

[Russycle]

Last I heard, Chevron owned the patent on using nickel-metal batteries in vehicles (purchased from GM. Nice going, geniuses!!!) How is Toyota pulling this off?

[distributorcap]

GM has a huge marketing problem - even if they produce a car that is competitive or better than Toyota, Honda, Nissan or a European maker - most Americans think they suck. I know in the back of my mind I think they suck. I remember when I was buying a car around 12 years ago - I just wouldnt even consider a GM. I dont know how you get past the bad name and rap that GM and Chrysler have. A whole lot of mea culpa ads are not going to do it.

And the rightwing blasting that we should boycott GM is only going to make matters worse.

[Punksten]

While companies like Toyota were being sensitive to the consumer, GM was spending its time lobbying Congress to keep its fuel-deficient cars on as low a mph-requirement as possible.

Meanwhile, Toyota and other foreign care companies are thinking, "What does the customer want? What makes them happy?"

So, GM has gotten its just reward. Hopefully, they'll learn a lesson, but I doubt it.

[sc300nc]

Toyotas success over American car manufacturers has been with their non-efficient lines, the Camry, Corrolla, pick-up trucks, and their line of SUV's. It's the quality that sells them, the majority of people that have owned Toyotas are loyal to them because the vehicles hold up well, have great resale values, are not a maintenance nightmare, and are reliable. GM could not compete with their base models, that's why they are in the situation they find themselves.

[illusionpainter]

http://www.nlcnet.org/article.php?id=586

[illusionpainter]

BTW, I would like to see some fact base behind what you said about GM vehicles. I have a GM Truck that is 8 yrs. old with 180,000 miles on it and I have had nothing but normal maintenance done on it. I have never had one single problem with it. I have several family members that have a variety of GM vehicles that they have not had any problems with. What you stated is a myth and inaccurate.

[sc300nc]

Not any bias at all in that report I suppose. Irregardless of how much truth there is in it, if your competitors are cutting wages in the US and you are not, that puts you at a disadvantage. It's all about competition, GM lost.

[illusionpainter]

Should GM follow the lead of Toyota's practices? I think NOT!!!! Take a read of this article from The National Labor Committee.­..... http://www.nlcnet.org/article.php?id=586 Is this what you are promoting?

As for the Hummer. The vehicle was made for the military. The public started asking for them and that is why GM put them on the market. You Know, a company is in business for sales and to please their customer base. People were also asking for more and more SUV's. That only changed when gas prices went sky high. What do you do if you have more than 2 children and a spouse? Do you think they will all fit in a Prius? What if you have a boat, camper or trailer? How will you tow them? What if you own a business that requires you to have a truck, van or SUV?

People say they want a small fuel efficient car because it's the "politically correct" thing to say now. However, most of them have a SUV or truck in their driveway with no intention of selling it. Unless gas goes to $4 per gallon again those small cars won't sell like everyone thinks they will.

[KillTheMessenger]

The Hummer wasn't made for the military. The HMMWV was made for the military..­. but that's a different vehicle, though, made by a different company: http://en.wikipedia.org/wiki/AM_General. AM General at one point even belonged to Renault. GM only bought the rights to the Hummer name. That's pretty much it in terms of ownership.

Damn... reality sucks. It never seems to agrees with you!

[illusionpainter]

And I care why?

[Nitehawk]

GM still hasn't learned its lesson. I heard spokesperson touting their new hybrid suv's that get 19mpg. Ummm I have a 20 year old Jaguar that does better than that.

[illusionpainter]

The mpg is actually 22, you can look it up at GM's website. That's pretty good for a vehicle that large and that heavy. Your car is a lot lighter than an SUV. You know, physics and propulsion­.....

[KillTheMessenger]

Exactly, physics tells you to make your vehicles smaller... and what do you do? You make them larger. Not smart. You know.

[Aaror]

I don't think you should knock the postal service, they have been accurate, effective, and innovative for 200 years. When someone tells you the reason you didn't get a birthday card is that it "must have been lost in the mail," do you believe them? No? I guess you agree that the postal service is accurate..­.
Now granted, their prices have been going up lately, but you have to look at their business enviornment. Personal notes are not going via e-mail and internet, so their volume is down, but Congress mandates that they serve every po-dunk town in the nation, from LA to Van Buren County, Iowa. I agree with that mandate (the postal monopoly is because any private mail company would save money by not serving 10% of the population), but it still drives up costs.
Still, 2 day mail 6 days a week to every town in a nation of 300 million is nothing to sneeze at.

[trimom]

Let's not forget that Toyota is an exceptional example of a company implementing lean manufacturing techniques. This allows the company to be flexible and results in reduced costs.

[EinChicago]

"Let's not forget that Toyota is an exceptional example of a company implementing lean manufacturing techniques. This allows the company to be flexible and results in reduced costs."

yeah. Buying your steel from brazillian slave labor charcoal camps and using a majority of benefiots less $3 per day brazillian-american migrant workers in Toyota city will do that for you.

But hey, if Toyota can get 100 feet pergallon better mileage, who cares about human rights and abusive labor practices, right?

[KillTheMessenger]

Yaaaaaaaaa­wwwwwwwwnn­nnnn... excuse me... I had to stretch myself for a moment. So you were saying?

[sangazure1]

One reason Americans are buying foreign-made cars is simply that they're of higher quality. If Detroit wants to win back the American consumer, they will have to meet foreign standards for quality. I haven't bought an American-made car in 30 years.

[KillTheMessenger]

My parents had a Ford and then another Ford when I was a kid. What I remember mostly about the two cars is that they had to be constantly repaired. Then they got a Fiat. Even worse. And then they got a Honda. 12 years of perfection and they are still upset that they sold that car! Now they have another Honda for 14 years and close to no problems (one indicator light is faulty because of a firmware defect and the service people say it's not even worth repairing). There is not even rust on that car and it's been in Western Europe all the time with rain and snow!

What car companies forget is that people have lifelong memories when it comes to cars. They don't forget what Dad said when his car broke (and I can't even repeat that here!).

Anyway... I just met a Lady who drives a Lexus and I asked her how she liked the brand... she basically gave the equivalent of a performance of the balcony love scene between Romeo and Juliet and it was all about the car and the brand and the service people. I mean, the woman was totally in love with it. THAT is customer satisfaction. When your own customers become your best sales people, that's when you know you have done something right.

[mikefina]

I daresay you may be a bit out of date. Many of your 'foreign-made' cars are actually American made, by a foreign owned company. Moreover, there are many outstanding American engineered and manufactured vehicles that give your MUCH more dollar-vaule.

The author of this piece may laud Toyota, and rightfully so, but the value of a Prius, to most families, is negligible­--especial­ly at its price-point. Ever more interesting would be to know how much, if ANY, money Toyota makes on a Prius.

[brklynivn]

That tells you something about Detroit's management. The autoworkers are first class, and can build a first class product -- it's the mid and upper level managers of the Big Three (notable exception Ford - I hope), that are the problem. Also the question is how much money and technology residuals Toyota WILL make, short term profit above all else is what makes American management the worst in the world. Notice that gas prices jumped again, during a recession?