Turning Around GM

Ed Whitacre: How did the automobile industry get into trouble? It’s a good question. I think it happened over a relatively short period of time. But I think, in GM’s case, they weren't building a quality product. They refused to modify their structure. Their expenses were really more than their revenues, and over a short period of time, if you don’t sell many cars you don’t get much revenue, your expenses are there, you run out of money and you go into bankruptcy. And that’s what happened.

Well, my strategy to turn around GM really was quite simple. And I say my strategy, it was the strategy of me and the top management team we put in place. And it’s mostly common sense, I think, but the first thing is you have to define what you want to do. And General Motors, I thought, had kind of lost its way and didn’t know what its mission was. And so we decided very early on that what we did as a company was design, build and sell the world’s best vehicles. That’s a pretty easy strategy to articulate. We did that to all the employees. We spent a lot of time with all the employees of GM saying, look, we design, build and sell the world’s best vehicles. We don’t do anything else. Everything else is sort of superfluous to that; let’s focus on that. 

We also did some other things. We put in the right management team. We did away with a matrix organization and a matrix, as you know, is where you have multiple bosses and, therefore, you have no boss because you don’t know which one to listen to. So we did away with the matrix management and set up clean lines of organization. We tried to eliminate some bureaucracy. We empowered the people. We gave people the authority and responsibility to do a specific job. We held them accountable for that. I think just common sense management things. And they worked.

The workforce at GM was pretty disheartened as you can imagine. You’ve just come out of bankruptcy. You don’t know what the future holds. You’re being called “Government Motors” by everybody. In some cases your neighbors won’t speak to you because you’re in bankruptcy. You're embarrassed about going home or going to the grocery store. Some of your friends aren't your friends anymore. But there was one thing that really stood out to me and that is, the GM employees wanted to prove to everybody, hey, we’re not bad. We’re real good. Give us a chance, we’ll show you what we can do. And, by golly, they did. 

Directed / Produced by Jonathan Fowler & Elizabeth Rodd

The workforce at GM was pretty disheartened when the company hit hard times during the recent recession. And yet, GM employees wanted to prove to everybody that they could design, build and sell the world's best vehicles. And, by golly, they did.

Related Articles

Human skeletal stem cells isolated in breakthrough discovery

It's a development that could one day lead to much better treatments for osteoporosis, joint damage, and bone fractures.

Image: Nissim Benvenisty
Surprising Science
  • Scientists have isolated skeletal stem cells in adult and fetal bones for the first time.
  • These cells could one day help treat damaged bone and cartilage.
  • The team was able to grow skeletal stem cells from cells found within liposuctioned fat.
Keep reading Show less

How exercise helps your gut bacteria

Gut bacteria play an important role in how you feel and think and how well your body fights off disease. New research shows that exercise can give your gut bacteria a boost.

National Institutes of Health
Surprising Science
  • Two studies from the University of Illinois show that gut bacteria can be changed by exercise alone.
  • Our understanding of how gut bacteria impacts our overall health is an emerging field, and this research sheds light on the many different ways exercise affects your body.
  • Exercising to improve your gut bacteria will prevent diseases and encourage brain health.
Keep reading Show less

Giving octopuses ecstasy reveals surprising link to humans

A groundbreaking new study shows that octopuses seemed to exhibit uncharacteristically social behavior when given MDMA, the psychedelic drug commonly known as ecstasy.

Image: damn_unique via Flickr
Surprising Science
  • Octopuses, like humans, have genes that seem to code for serotonin transporters.
  • Scientists gave MDMA to octopuses to see whether those genes translated into a binding site for serotonin, which regulates emotions and behavior in humans
  • Octopuses, which are typically asocial creatures, seem to get friendlier while on MDMA, suggesting humans have more in common with the strange invertebrates than previously thought
Keep reading Show less