Tuesday, August 09, 2005

GM -- Market Leader

And all you have to do to see it is go to China. Via Keith Bradsher of the New York Times, we learn that GM's business is thriving in China with a $5,000 minivan that gets 43 miles to the gallon in city driving.

That's the good news. GM has apparently found the right formula for a vehicle that appeals to small business owners and a working class that is gaining in economic resources.

Much of the article is about the way the joint venture was conceived and implemented by former executive Philip Murtaugh:

Their development was led by an American, Philip F. Murtaugh, a native of Ohio and a maverick executive who was willing to zig while the rest of G.M. was zagging. Mr. Murtaugh was able to create in China the kind of innovative environment that G.M. has struggled for decades to achieve in its American operations. But whether G.M. can duplicate elsewhere its achievements in China or even keep its pace here is unclear.

In what may be a telling sign of the corporate culture at G.M., Mr. Murtaugh's success in China led not to promotion but to his departure from the company. G.M. declined to discuss personnel matters, but both it and Mr. Murtaugh said he resigned and was not dismissed.

A soft-spoken man in a company known for autocratic leaders, Mr. Murtaugh ran the China operations for more than nine years from his base in Shanghai, repeatedly making some of the best calls in the industry. Now he finds himself unemployed and living in a small community in rural Kentucky.

His resignation in March, at the age of 49, came shortly after senior company executives reorganized management to give more power to Detroit executives to oversee design, engineering and various manufacturing disciplines all over the world, including operations in China.
I have a feeling his phone will be ringing. For GM, I guess it's time to zag again.

(See also this post at Our View from Madison on the NYT article and this post of an Economist article from April on foreign car companies in China.)

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2 comments:

Eagle1 said...

Why is this not surprising? Why is that companies and the military tend not to recognize the leaders they need until a time of crisis? General Grant comes to mind, as do Eisenhower, Nimitz, Iacocca...

Anonymous said...

well what gm mini van gets 40mpg u dont say which vehicle u just say gm minivan- that narrows it down