{"id":951,"date":"2012-08-07T18:50:24","date_gmt":"2012-08-07T18:50:24","guid":{"rendered":"http:\/\/www.department99.com\/bobamter\/?p=951"},"modified":"2013-02-03T18:03:33","modified_gmt":"2013-02-03T18:03:33","slug":"general-motors-versus-toyota-who-will-win","status":"publish","type":"post","link":"https:\/\/bobamter.com\/?p=951","title":{"rendered":"General Motors versus Toyota \u2013 who will win?"},"content":{"rendered":"

General Motors just reported a 41% reduction in its second quarter Net Income to $1.5 billion with a $1.8 billion decrease in Sales.<\/a><\/p>\n

The main source of the GM decline was its European operations. Its future results are questionable as USA sales forecast predicts declines. Both of which are understandable in this difficult economic environment.<\/p>\n

But, Toyota reported a huge<\/em> increase for the same time period<\/a>. Its Net Income was $3.17 billion on robust sales growth \u2013 profit was 111% greater than GMs. Its sales forecast expects substantial increases.<\/p>\n

Can GM be successful up against Toyota and other Asian manufacturers?<\/p>\n

Toyota\u2019s USA based operations have lower product costs compared to GM because their hourly factory labor wages are lower \u2013 further compounded by lower health care and retirement costs. Toyota has a leaner salaried organization and thus lower overhead costs. These significant issues were not dealt with during GM\u2019s bankruptcy.<\/p>\n

GM is not the best cost producer in its industry and, as a result, will decline. Its profit margins and free cash flow will be squeezed resulting in less capital available to develop new products and productive manufacturing systems and equipment.<\/p>\n

Will this bring GM to its knees again?<\/p>\n

Most likely.<\/p>\n

Click on the following links to read my earlier posts with greater details of GM\u2019s issues:<\/p>\n

General Motors – Industry Leader? <\/em><\/a><\/p>\n

GM & Chrysler Bankruptcies<\/em><\/a><\/p>\n

UPDATES:<\/span><\/em><\/p>\n

<\/em>On August 15th<\/sup> Forbes published a thorough analysis of General Motor\u2019s declining performance entitled General Motors Is Headed For Bankruptcy \u2013 Again <\/em><\/a>–\u00a0 a worthwhile read.<\/p>\n

A September 10th<\/sup> \u00a0Reuters\u2019 article, \u201c<\/em>Insight: GM’s Volt: The ugly math of low sales, high costs<\/em><\/a>\u201d<\/a>, <\/em>details General Motors costly failure with the Chevrolet Volt \u2013 a loss of $49,000 on each car. Couple this failure with the Chevy Malibu being rated dead last versus five competitive vehicles in Car and Driver<\/em> magazine\u2019s comparison tests raises two questions: Is GM well managed? Can it succeed?<\/em><\/p>\n

These product failures signal the absence of coordination and cross-functional communication among GM\u2019s operating functions. In particular, for these two product failures, are product engineering, marketing, manufacturing engineering and cost accounting working in sync?<\/p>\n

In my experience there is an absence of open and candid communication through all levels of distressed, troubled companies. Cross-functional communication is always missing. Consequently mistakes mount, problems fester.<\/p>\n

Cross-functional communication requires that the CEO uses it and demonstrates that it is an integral part of the company\u2019s culture. Absent that it is difficult for functional officers and mangers to use it \u2013 the negative politics of some human beings results in certain people being unwilling to participate in this style of management. Need a fully competent and self-confident CEO – highly knowledgable of what goes on in the bowels of a manufacturing company.<\/p>\n

If its faults are not corrected, the prediction that GM will reenter bankruptcy may come true.<\/p>\n

October 31 and <\/em>November 5. Toyota\u2019s net income tripled and market share increased<\/a> while General Motor\u2019s net income declined 12%<\/a>.<\/p>\nTweet<\/a>","protected":false},"excerpt":{"rendered":"

General Motors just reported a 41% reduction in its second quarter Net Income to $1.5 billion with a $1.8 billion decrease in Sales. The main source of the GM decline was its European operations. Its future results are questionable as USA sales forecast predicts declines. Both of which are understandable in this difficult economic environment. […]<\/p>\n","protected":false},"author":1,"featured_media":952,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,8,20,38,16,7,132],"tags":[226,134,12,21,227,133],"class_list":["post-951","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bankruptcies","category-bankruptcy","category-business-failure","category-gm","category-manufacturing","category-the-big-three","category-toyota","tag-bankruptcy","tag-best-cost-producer","tag-biography","tag-business-failure-2","tag-general-motors","tag-kia"],"_links":{"self":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts\/951","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=951"}],"version-history":[{"count":14,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts\/951\/revisions"}],"predecessor-version":[{"id":1191,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/posts\/951\/revisions\/1191"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=\/wp\/v2\/media\/952"}],"wp:attachment":[{"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=951"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=951"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bobamter.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=951"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}