While much has been written about the
First, the worst. The magazine published a brief interview with Glenn Reynolds of CreditSights, who is described as a longtime auto analyst. (His firm is described as one that analyzes corporate capital structures.) Reynolds proposes that Chrysler become a joint venture owned by Daimler, General Motors and a group of private equity players.
With such a deal, Reynolds says, “GM could control the rationalization of the North American auto industry.”
Oh, really? I think market forces, such as the strength of the Japanese companies, have a bit more to do with it.
Forbes, noting that GM already has too many dealers, brands and exposure to a tough market, asks whether there is a case for GM’s getting involved with Chrysler at all. Reynolds responds:
The stock and credit markets will hate it. That said, there are a number of very good reasons. GM could drive a steady and orchestrated restructuring of the industry. GM also could work over the longer time horizon to consolidate many dealers. While GM would be unlikely to admit it for regulatory reasons, GM could also better influence market pricing and production planning.
I think he’s right about the reaction of the stock and credit markets, and that’s because they have more sense than he does. GM’s influence on market pricing is minimal, if it exists at all. And while GM is making progress in its own restructuring, it is far from being at the point where it could take over another troubled company and turn around both Chrysler and itself.
Fortunately, on the very next page of the magazine, automotive columnist Jerry Flint offers a refreshing dose of common sense.
Cutting costs isn’t turning around; reducing the dollar losses isn’t turning around; and even moving to the financial black from the red isn’t turning around.
Turning around means selling more cars and trucks instead of fewer cars and trucks. It’s making volume gains over the year before. It’s gaining market share instead of losing market share.
(I’d argue that market share is less important than profitability, but we’ll debate that another time.)
It’s too early to say GM has turned the corner. Wait three months.
Funny how there is no mention of sales or profits in Reynolds’ remarks on the preceding page.
So what does all this have to do with lean? The relentless drive for continuous improvement demonstrated for so long by
By the way, since its publication, that book has consistently been one of our best-sellers. Let’s hope executives in