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Jeffrey Pfeffer
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Jeffrey Pfeffer

Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, and author of the Sept. 2010 book, POWER: Why Some People Have it and Others Don’t.

It's Already Too Late

In a word, nothing could have been done. It was already too late. Having flown to D. C. recently in corporate jets, the CEOs "driving" to Washington was a publicity stunt. Having made enormous salaries even as they asked for wage and benefit concessions (Ford's CEO made $22 million last year), a symbolic cut to a salary of $1 is a joke.

Union concessions are nice but, as many in Congress recognize, the problem with the U.S. auto industry is not "stranded costs" like pensions and health care, but a product line-up and brand image that requires U.S. auto manufacturers to sell their cars at large discounts to get anyone to buy them.

Witness, for example, the steady erosion of market share over the years and the data in the Oliver Wyman Harbour report, which shows the lower average realized revenue per vehicle sold compared to companies like Toyota.

The sad thing about the U.S. domestic automobile manufacturers is that nothing has changed from decades ago. David Halberstam's book, The Reckoning, Maryann Keller's book, Rude Awakening, and John DeLorean's book, On a Clear Day, You Can See General Motors -- all of them decades old -- document the problems of the auto industry, most of which endure today.

Those problems include slow adoption of new technology and product innovations, inattention to quality and design, adversarial relationships with the workforce, too much emphasis on short-term financial results and strategic fixes, such as the many unsuccessful mergers (e.g., Jaguar, Volvo, Daimler-Chrysler), rather than attention to operational and engineering excellence, and bloated, bureaucratic cost structures and management.

Given this long and undistinguished history, accompanied by virtually unremitting erosion of market share over years, why should we believe the future is going to be different from the past? As the quality movement should have taught us, it is much easier and less expensive to prevent problems than to remedy them once they have occurred.

By Jeffrey Pfeffer

 |  December 8, 2008; 4:12 PM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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The command experiences and battle losses of General Eisenhower in Europe and General MacArthur in Asia were drastically different from each other. Eisenhower not only tolerated high losses in combat operations [as opposed to MacArthur's 'hit them where they ain't approach -- Sun Tzu anyone] but Ike secretly wrote off all Allied POWs that were known to be alive in the Soviet Union to avoid a nuclear war, should we have discovered those in the Eastern zones held by Russia had never been repatriated. They went to the gulags and later were slave labor to build Russian infrastructure.

Nevertheless, both were excellent Generals and I wonder what the USA would look like today if MacArthur had become president, instead of Ike.

The reality is that we can only live in the 'now' [just as God does] and while we can direct our future, we cannot change the past. Individuals who suffer from depression, usually so suffer because they are not living and focused in the 'now' and prescription RXs help to achieve that effect.

WHY I'D LOVE TO BE THE NEW CAR CZAR, OR EVEN THE USED CAR CZAR.

I FIND THAT LAWYERS MAKE EXCELLENT CAR CZARS AND I HAVE BOTH DOMESTIC & FOREIGN CAR EXPERIENCE, NAMELY, FORD AND GM ON THE DOMESTIC SIDE AND HONDA AND TOYOTA ON THE FOREIGN SIDE

AND I KNOW CHINESE

为什么I' 是D的爱新的汽车沙皇,甚至半新车沙皇。 我发现律师做优秀汽车沙皇和我有两国内& 外国汽车经验,即,在外国边的国内边的福特和GM和本田和丰田

AND JAPANESE TOO.

I'なぜ; Dは新しい車の皇帝、また更に中古車の皇帝であることを愛する。 私は弁護士が優秀な車の皇帝を作る私持っている両方国内&をことが分り、; 外国の側面の国内側面の外国車の経験、即ち、フォードおよびGMおよびホンダおよびトヨタ

Posted by: brucerealtor@gmail.com | December 10, 2008 3:32 AM
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We need to collectively ask ourselves, as Americans, why do our systems of management produce such terrible long-term results?

Firstly, there must be something wrong in the organizational culture that rewards failure. From the outside, it appears that top management get to make and break the rules at will, and are simply not held accountable for their failures.

Secondly, there is a *huge* disconnect between the board and C-level directors, and the customers. If the CEO can no longer understand, and does not care, about how the customer reacts to the product he is producing, then the business is doomed.

It is interesting that the auto industry was undone by its own cost-cutting and efficiency mentality, that starved product design and innovation of the resources needed to make the company successful long term. This is a sickness of companies that enjoy large market share, in that they adopt a defensive financial strategy. It is also a reflection of how short-term focus on quarterly profits can simply erode a strong financial position of any firm.

Posted by: AgentG | December 9, 2008 11:17 AM
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