General Motors announced record losses in the auto industry of the order of US $ 38.7 billion.
Although the reported loss is extraordinary and gigantic, look at it from where you want to look at it and whatever the way or way you try to explain it, the truth here is that the top managers received succulent salaries, the shareholders will not see dividends and a total 74,000 operators will be affected by a voluntary retirement plan.
In the first place, it is surprising how the most gigantic company on the planet, which presumably has a large number of graduates in the main business schools of the United States among its managers and officials, and they have the most advanced computer systems to generate negative results of such a magnitude, or in other words, how such a situation got out of hand.
The first thing to consider when analyzing a news item of such magnitude is to consider how the management of the company thinks and acts in its operations. If a small company suffered losses in an underdeveloped country, due to the mistakes of its owner and / or advisor, it could be understandable, but lately the news is really surprising. Just remember the loss recently suffered by the French bank Société General.
Seen all this from the perspective and fundamental ideas of the TCM © (Total Competitive Management) this could not occur from having a strict control over each one of the sixteen fundamental control points, which includes among others:
- Zero misinformation, zero unproductiveness, zero incommunication, zero failure or defect.
Thus, if the budgetary and management control systems are not flawed, if the information is generated on time and with sufficient accuracy, and there are no communication problems between the various areas of the company, the unproductivities and the corresponding generation of losses should be detected with enough time to twist the course of the results. The questions are: How bad are GM's management systems? How capable are your managers if they generate a loss of such magnitude? How real are such losses? Or is it a financial-accounting trickery to avoid paying taxes or to ask Washington for help?
What is certain is that GM is still anchored to the old management paradigms, paradigms that are no longer valid for the new moments of the world economy. Just as an airline like PANAM disappeared from the skies, we are not surprised that in the future GM vehicles will be seen as collectibles.
The serious and serious errors in making strategic decisions have been happening continuously and systematically by the managers of General Motors, which is why it is essential that the way of thinking of the organization and its processes must be radically changed, and for this it is necessary a radical change in the way of thinking and feeling on the part of the top management.
Meanwhile its main global competitor, Japan's Toyota, has been reporting earnings year after year. There is a clear difference in the way of managing both companies. While the North American makes use and boasts of large computer programs and professionals with too many masters and little or little common sense, the Japanese make use of tools as simple as a kanban and develop their future leaders from the lowest levels of the organization.
Undoubtedly, GM faces a lack of leadership, in addition to a high degree of irrationality in its strategic decisions, which leads it to a situation totally contrary to that set by the TCM ©, which foresees the need for a positive and ethical leadership, in addition to taking measures not only of prevention but also of extreme care with the adoption of irrational behaviors.
