My Years with General Motors

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• GM got big in the world of finance: consumer financing
• Price packing was another bitch - dealers would jack up. Ar price, allowing them to trade in a car at pparently inflated price - but sucker paid for it with higher new car price.
• 299 - GM Quality Dealer Program was established to prevent bootlegging, a rating of dealers. Transparency or "Product Label". OSE Product Label
• Dealershi bootlegging after war - selling off wholesale inventory to used car lots
• Dealer Relations Board - binding arbitration with dealership complaints - going both ways?
• At term end, there was no requirement to renew
• Now they offer 1, 5, and indefinite dealerships - with termination for cause provision
• If dealer was canceled, GM would buy out his inventory and other assets
• 'passing off our inefficiency onto the public in the form of a higher retail price'
• 'fundamental soundness as opposed to easier approach of expediency'
• Started Dealer Council with 48 dealers , body rotating annually
• 1850 dealerships were financed this way
• Motors Holding Division - to provide capital to bankruptcy and dealership startup. Grubstake
• 1927 - instituted Motors Accounting Company. Let's learn to count.
• GM instituted a rebate to dealers, to liquidate old models.
• GM pushed a glit of cars on the franchises, saying, 'good luck'
• Dealers went from easy doing to hard selling.
• They first started to overproduce (demand leveled) then focused on distro.
• Why dealer? Selling is difficult when you have lots of trade-ins.
• Two properties of distribution: Dealer has the personal contact. Dealer is franchised. Not a legal agent of GM, but a peddler.
• Franchise distribution works only if you have prosperous dealers. No shit.
• GM.paid attention to dealers.
• Cars were designed such that every time you step in one it's a mini vacation
• 278 styling abated purpose, such as tail fins
• 276 1938 eliminated running board
• 1934 Chrysler airflow was too streamlined
• 273 - 1929 Pregnant Buick was a consumer flop.
• Perhaps - with humility - accept that we centralized only if divisions do an inferior job. Whoever does better takes responsibility. We measure results by outcome, such as sales a d reviews.
• There was a fear of monopolizing styling. Turf battles seem to be the nature of the organization. Makes me think of how we empower everybody and a diversify and grow the pie.
• Styling staff of 1400.
• New model creates some form of dissatisfaction with the old. Scarcity econoics
• 264 - two types of engineers exist - product and production. The product guys cause a lot of trouble, as they don't include production. At OSE, the engineer does product and production, integrating the process. Robustification, product ecology, and lifetime design both loosen a d tighten requirements. Value engineering is superseded by lifetime engineering, which is easier (robustification engineering) and harder (more integration work required for entry into ecosystem - such as specific part families, degeneracy, more standards, more flexibility, multipurpose, more documentation, open education)
• Research center was aesthetic, not designed by their engineers as DuPont suggested
• Automation - level of it was considered carefully. And then, as now- automation does not mean that humans don't have a role - it is really about collaborationwith machines
• Proving grounds was field test labs of 4000 acres. Then so.me in the desert and mountains.
• 249 - Dayton Engineering laboratory - Delco. Research co, also produced the starter.
• GM had 19k engineers. About 2 k in org, rest in divisions
• 247 - annual model. People want new frivolity, and competition does it too.
• 235 wishbone suspension became popular as easiest to build
• 5 of 7 B of capital - they got from revenue
• Econ necessity and evolution to lower price - means centralization. BS, if we level the playing field.
• 213 - grew from 200k cars to 5M from 1917-1962, 25k to 600k employees, and to $15B sales.
• 199 fina cial and op controls aved them from depression, lowed to react quickly
• 193 - invest only in industry central to cars. Such that steel was not.
• Crisis means coordination increase means economy
• 162 Model T didn't change and died off by 1920s end
• Thus Pontiac set to demonstrate that mass production can reconcile with variety
• They followed produ t ecology for their second up mod. Why not for all?
• 150 - transformation - installments, trade-in, closed body, annual model.
• Before 1908 - class market. To 1925 - mass market. Then GM era - mass-class market - mass market with better quality
• Financial control reduced need for control from the top
• Comptroler of division was responsible to org as well
• Bottom line - worker-manager relationship is adversarial. This shit creates inequality, imbalance, dead end jobs. Get rid of 'investors', create lifelong learning, make self-realization replace ROI- or rather Integrated ROI which is general happiness. This would also solve authoritarianism/dictatorship as enlightened individuals would not trade with mass murderers.
• 143 objective of data: to enable openminded communication and objective consideration of facts
• 141 - return attainable in the overall amerket - 'return attainable'
• Controls- ROI is key. Controls: appropriations, cash, inventory, production. Controls are: cost, price, volume, returns
• Al this forecasting bullshit is just an artifact of products that have a shirt lifetime. Is can be fixed with lifetime design.
• 137 continuous improvement - critical fa for that can stimulate demand regardless of outside factors
• Calculated graphs of cash month ahead, and checked divergence
• Cash between divisions was handled with a corporate Clearinghouse using certificates
• Cash control - depository account over which divisions did not control corporate withdrawals
• 121 manual for capital appropriations/expenditures
• 119 had to curtail excessive spending of divisions by responsible oversight
• 116 coordinated financial controls
• Established protocols, such as engine testing. For us it's a transparent label with everything on it.
• 107. Nobody cooperates. They tried collaborative engineering. Etwee. Divisions. To me that is a lack of standards or common vision.
• Point - effective distinction between central and divisional engineering efforts
• 71 - revolutionary car. Mr. Kettering the engineer superstar failed to deliver. Nobody even understood what he was doing. If it can't be understood, no point - one needs a team and better get buy-in. If the c suite could think critically, or Kettering could communicate clearly - this would all be solved. All this smacks of reinvent ting the wheel, many ead ends, snail like progress of non- collaborative development

K3

• Price bracket product strategy - such that it would borrow from brackets below and a ove
• Just matching the competition not exceeding eliminates performance risk
• Companies compete in broad policy and specific product
• P64 For low cost car, modeled the org before building the org. That is OSE style.
• Limit number of direct reports to CEO to let CEO focus on broad policy
• Interdivision sales - cost plus. For OSE - cost is a fraction, so maybe value-share 50/50 on the benefit?

Chapter 1

• P17 -Duryea was the first consumer gasoline car company in the USA [1]
• Mr Durant could create but not administer

Intro

• A distinction should be made between expansion, and the organization needed to support it
• Sometimes need to build parts of org around some individuals?
• Design org to be objective, not subject to personalities
• No org is sounder than the men who run it
• Centralized in policy and decent is administration
• Intro p22 -Competition for survival as greatest incentive. Ie, getting your fucking ass kicked as an incentive? How about constructive incentives?

Amazon

https://www.amazon.com/product-reviews/0385042353/ref=cm_cr_dp_mb_top?

• Read some of the reviews to see if it's worth it
• First long review shows that book didn't cover production for the nazis in WW2. Details!
• Tanks were welded in a merry-go-round system that required learning only one simple weld rather than full scale training
• Great book on scarcity economics (competition) and Gayes' pick if you were to read only one biz book