Monthly Archives: August 2019

#348 More about EV1 (Electric Vehicles): Story Behind the Story (Part 3)

26 Monday Aug 2019

Posted by in Diversions, General Motors, Personal Stories, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.  

The past few entries have been a break from the craziness in Washington.  In Entries #343-#345 I included some observations about my time working with Lee Iacocca, who died July 2.  Entry #346 started discussing another project that continues to generate considerable interest — the GM EV1, the first modern electric vehicle, which was introduced more than 25 years ago.

There are two sides to the EV1 story — product and non-product.  The product side has been reasonably well documented.  In my view, the non-product side of the story is far from complete, and what’s been told so far is misleading.  The next few entries — I actually do not know how many — will attempt to provide addition insight.  Stick around.  The series will be a good diversion from the madness in Washington and offer a good lesson or two, I hope. (If you have not read Entries #346 and #347, suggest you do so before reading this entry.)

In-house development of GM EV-1 begins. At the 1990 Los Angeles Auto Show Roger Smith, then GM chairman, introduced the first modern electric vehicle (EV-1) and proclaimed GM would produce it. As described in Entry #347, the concept car introduced in LA had been developed in secret by a company with no affiliation to GM. Formal development and production were to be inside GM.

Soon after the announcement in LA, the program kicked-off inside GM. The program manager was selected and then initial staff members recruited from different divisions. Additional staff was added as the program progressed. The EV-1 program was headquartered in the Advanced Engineering Building at the GM Tech Center. Being housed in the Advanced Engineering Building reinforced the impression, both inside and outside GM, that an Innovative product was being developed.

Another decision was to not assign the EV-1 to an operating division — Chevrolet, Oldsmobile, etc. On the plus side, not selecting the operating division helped avoid the EV1 being pushed aside by the designated division and having EV1 resources diverted for near-term marketing activities. On the negative side, not selecting a “division home” for EV1 reinforced the perception among many operating division executives that the EV-1 was part of Smith’s portfolio of projects that diverted cash from critical product development and marketing programs, which in turn, caused GM to lose market share.

One of the benefits of hindsight is the opportunity to ask, “What went wrong during the EV-1 program?” And then ask, “What did I do or not do that might have contributed to what went wrong?”

Over the past 20 years or so, I’ve been asked to discuss various aspects of the EV1 in different forums — public presentations, media interviews, guest lecturer at a university, even a movie. With each one of these “events,” I’ve tried to assess how different decisions might have affected the outcome of the program, both positively and negatively.

This series of entries, of which this is the third, attempts to analyze the “non-product” side of different activities. I have stated repeatedly in the various forums that I believe the technical limitations of the EV-1– limited range, 2-passenger seating capacity, e.g. — were not the underlying causes for GM pulling the plug on the EV1. Some of the technical limitations have been used as excuses, but were not really the causes.

What were the causes?  Before pointing fingers at others, it’s always a good idea to first look in the mirror. Most of my role at EV-1 the project was to help manage a team that focused on educating groups outside GM. The groups ranged from utilities to fire-and-rescue organizations to Federal and state-government officials to the media to the general public. While most of the efforts were in the US, we also met with officials in Europe.

The efforts of the team were incredibly successful. Even though our marketing and promotion budget was a mere fraction of the budget for the operating divisions, the team’s efforts, as measured by the amount of media coverage, resulted in a significant increase in the public’s awareness of electric vehicles and a significant increase in positive perception of General Motors.

If memory serves correctly, over a roughly three-year period, the EV-1 program generated more positive publicity for GM than the rest of the company combined. (As we’ll discuss in a future entry, all that goodwill and more was lost when GM decided to kill the program and crush all but a few EV-1’s.)

So with such a positive track record, what could have been done differently? Frankly, what did not occur to me at the time, and I don’t recall anyone else discussing this either, was the need to present to the operating divisions — Chevrolet, Buick, etc. — the same type of educational program about the EV-1 as we presented to outside groups.

While many staffers on the EV-1 program had been in the divisions that suffered because of cash diversions to fund Smith’s projects, I’m not sure any of us fully appreciated how negatively our former colleagues at the operating divisions viewed the EV-1 program. We were all enamored with the idea of an electric vehicle and assumed everyone else inside GM was equally excited.

Clearly not everyone was. An example was a return to my former division, Buick. After working many years helping position Buick for the future, I thought the EV-1 would be a perfect fit for Buick and its dealers, many of whom I knew personally. My thinking was the EV-1 could attract younger buyers to Buick, give dealers a sporty model in the showroom to attract new floor traffic and allow Buick to leverage interest in EV-1 among younger people to help build long-term brand loyalty. My rationale, however, when presented to the Buick general manager, fell on deaf ears. Buick was not interested in any association with the EV-1.

Buick and the other operating divisions were not alone in poo-pooing the EV-1. Somehow, we managed to get on the “Do Not Call List” for a number of staffs. Part of the conflict stemmed from assigned responsibilities. For example, EV-1 was the only group outside of the corporate staff whose responsibility included “government relations”. While our dealings with the government were restricted to topics associated with electric vehicles, we were allowed to approach legislators, government agencies and staff without first seeking approval of the corporate “government-relations” staff.

To me the limited scope of our government-relations activities made perfect sense. If a goal of the EV-1 program was for those in government to understand requirements for a successful introduction of electric vehicles, then the group charged with the introduction should be making contacts with various government entities. In my view we were judicious in our approach and diligent about keeping the corporate staff informed of our activities.

Were we successful? Like the group’s efforts in educating the public about electric vehicles, I think we did a good job educating legislators, legislative staff and a number of agencies. We also worked with other auto companies to ensure there was a consistent message to government about how it could help support the development and introduction of electric vehicles.

So what could go wrong? Let’s start with the relationship with the corporate government relations staff. I can state categorically there was no intent on our part to have the relationship go sideways…but it did.

Scene: Executive dining room at the GM Tech Center. Table for two. At the table are GM’s chief environmental lobbyist and me. Part way through lunch the other GM executive (I’m withholding the name intentionally) leans over the table and says, “Dabels, you’re my worst enemy.” My response, “How can that be? We work for the same company.” His retort, “You’re my worst enemy because my job is to convince Federal and state legislators there’s no demand for electric vehicles and you’re out there proving me wrong.”

The conversation continued, rather politely, but without resolution. The lack of resolution stemmed from our instructions. He was to promote a corporate policy that was in direct conflict with the policy the GM EV-1 group was to promote. We finished lunch and then left to carry out our respective instructions.

Inconsistent internal policies within GM were not uncommon. Another rift, which will be discussed in the next entry, was how the financial staff viewed the EV-1 as a cost center, and not a marketing opportunity. Focusing only on cost created an environment where the financial staff placed no value on improved corporate image, no value on increased future buyer potential, no value on brand loyalty, and no value on myriad other non-product attributes that often differentiate one brand from another and can lead to higher market share and earnings.

My view?  Supporters of the cost-center perspective ended up killing the program. The next entry will also provide some insight about what happened during the meeting the day the EV-1 music really died.

#347 GM EV1 (Electric Vehicle): Story Behind the Story (Part 2)

14 Wednesday Aug 2019

Posted by in General Motors, Personal Stories, Stupid Is as Stupid Does

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[Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.]  

The past few entries have been a break from the craziness in Washington.  In Entries #343-#345 I included some observations about my time working with Lee Iacocca, who died July 2.  Entry #346 started discussing another project that continues to generate considerable interest — the GM EV1, the first modern electric vehicle, which was introduced more than 25 years ago.

There are two sides to the EV1 story — product and non-product.  The product side is reasonably well documented.  The non-product side story is far from complete, and what’s been told so far I think is misleading.  The next few entries — I actually do not know how many — will attempt to provide addition insight.  Stick around.  The series will be a good diversion from DC madness and offer a good lesson or two, I hope.

(If you have not read Entry #346, suggest you do so before reading this entry.)  On top of the array of his decisions to divert cash from developing and marketing new products, Roger Smith (GM CEO) hired McKinsey & Company (consulting company) to study and determine if GM should be reorganized, allegedly to streamline operations.

As someone trained in finance, I agree that some improvements in operations likely were needed.  At the same time, those improvements could have been accomplished without a reorganization. Just for some perspective on relative size of GM at the time, Buick Motor Division generated more revenue than the worldwide operations of the entire Goodyear Tire & Rubber Co. Chevrolet Division was more than two times the size of Buick. In addition, under the then current organization structure, GM had been extremely profitable for decades. So why would anyone want to reorganize?

When I was interviewed by McKinsey for the study, it was clear from the questions that Smith had already decided to reorganize the corporation. The study was a sham and used as a front to justify the decision. The reorganization, or so we were told, would streamline product development and eliminate redundant cost.

Not part of the study was the value of “organizational loyalty.” Smith never spent time on the revenue side with a US operating division — Chevrolet, Cadillac, etc. If he had spent time, he might have understood how most employees felt about “their” division. Many people at Buick, for example, whether in field sales or on the assembly line, considered themselves part of the “Buick family.”   At the time of the “study” Buick had been operating in Flint, MI for more than 75 years. Many workers were 3rd, even 4th generation. Same type of history existed with many hourly and salaried employees at Chevrolet, Pontiac, Oldsmobile, Cadillac and GMC Truck.

For many of the same workers, even though their respective operating division was part of General Motors, the other GM divisions often were viewed as competitors.  Oldsmobile was considered a competitor by many people at Buick and vice versa.   While this might seem a bit unusual to many outside GM, I personally believe the sense of loyalty to a particular operating division was one of GM’s strengths.

The reorganization ignored the “emotional bond to the division” of the various employees. The reorganization created two major operating groups – CPC, which consisted of Chevrolet, Pontiac and GM of Canada – and BOC, which consisted of Buick, Oldsmobile and Cadillac. In addition to now being grouped with a former competitor – Buick and Oldsmobile, e.g. — the name of the group, “BOC” changed the alignment of the position in the marketplace of two divisions.

Since the 1920’s, Buick had been positioned higher than Oldsmobile in the GM hierarchy and higher in the car-market pecking order. Yet, the BOC name implied Buick as being lower on the pecking order than Oldsmobile.

Another example of the people driving the reorganization being incredibly tone-deaf was the names initially assigned to the “manufacturing-related” groups within BOC.  Names for these groups were apparently chosen by people who never worked in communications or marketing. Or, if they had worked in these areas, the names assigned were to thumb their nose at those responsible for the reorganization.

The initial names for the groups were etched on large metal signs and installed at the HQ buildings. The morning after the installation I saw the sign driving into Buick’s office.  The sign noted the Flint Automotive Group would be co-located in the Buick HQ building. At Oldsmobile, I assume there was a sign indicating the Lansing Automotive Group would be co-located at Oldsmobile’s HQ.

After a quick chuckle and a head shake, I asked someone in the Flint Automotive Group if anyone had considered the initials of the group — “FAG”.  The Lansing Automotive Group initials were “LAG”. Apparently no one had considered the initials.

After the inquiry, the names were quickly changed but another example of someone making decisions but not paying attention to anything other than what was considered a possible cost savings. The inept “non-financial”-related decisions — group alignment, group names, sub-group names, etc. – never set well with most employees and the ill-will towards Smith continued at least into the 1990’s, past the announcement of the EV1.

As if it were not bad enough that Smith diverted huge amounts of cash to non-core projects that diminished GM’s competitive position and earnings power, Smith was a control freak. Smith seemed to have to make all key decisions, even if he knew little or nothing about the topic. An example was when Buick sought approval for the introductory MSRP of the Reatta, a 2-passenger near-luxury car.

Buick had completed extensive research about consumer expectations for the MSRP. Two different research methodologies were used and results of each method suggested a price of less than $20,000 ($1985). Research also indicated a price above $20,000 was a psychological barrier and would reduce sales potential significantly.

Buick presented the research findings and the ~$19,950 MSRP to the Price Review Group, whose members consisted of various GM executives. While we were making the presentation and discussing the findings of the research, Smith interrupted the presentation and stated, “The MSRP is going to be $25,000. Next item on the agenda.”

So the Reatta was introduced with about a $25,000 MSRP. What happened? The Reatta had great visual appeal and consumer interest, but sales never achieved potential. Why? Rather than argue about the correct MSRP, a better indicator of value is to look at what happened in the used-car market.

The used-car market sets prices on what customers will pay, not what a manufacturer claims the price should be. A year or so after introduction, if one applied the traditional depreciation schedule to the Reatta, the introductory MSRP should have been about $20,000 (just what the research indicated and what Buick proposed), and not Smith’s demand of $25,000. The result? Smith’s arbitrary “seat-of-the-pants” 25% premium on the Reatta basically killed the program…and with it GM lost another opportunity to build market share and make money.

Buick was not alone in being subjected to Smith’s arbitrary decisions. All divisions suffered. I’m just not as familiar with some of the details since I was focused on activities at Buick.

With no love lost for Smith among a wide swath of GM executives, along comes the GM electric vehicle, the EV1. To add a little salt to wounds inflicted by Smith, how did the EV1 concept car get developed? Through GM Design Staff? Developed in conjunction with an operating division? No, the EV1 was developed in secret by a company located in southern California, called AeroVironment.

How are GM executive introduced to the EV1 concept car? Showings at the GM Tech Center? An in-house video?  No. The executives found out when the EV1 (called the Impact at the time) was introduced at the 1990 Los Angeles Auto Show. The introduction in Los Angeles also included Smith’s surprise proclamation that GM would put the EV1 in production.

Just think about what’s happened the decade preceding the surprise introduction of the EV1. Smith’s decisions included diverting cash to: (i) buy Hughes Electronics; (ii) buy Electronic Data Systems (EDS); (iii) buy back all the stock owned by Ross Perot as part of the EDS purchase, (iv) start yet another GM division, Saturn, which then never made money; (v) reorganize a company that had essentially printed money since the early 1920’s; (vi) arbitrarily price vehicles (I’ve spared you other stories about how Smith put the kibosh on breakthrough advertising and marketing ideas at Buick); (vii) focus on profit per car rather than market share.

The effect of these decisions was hugely negative. During Smith’s reign in the 1980’s, GM lost of 10 points of market share – equal to five (5) assembly plants.  Plus, GM laid off tens of thousands of employees.  Some of the supposed cost savings from these plant closings were never realized as many hourly employees continued to receive full pay even though not working.  The net result of Smith’s actions was a loss of tens of billions of dollars profit and a drain of cash for future product development and marketing. And now Smith develops an electric car in secret and the first time most executives became aware of the EV1 and the commitment to produce was the media coverage of the LA Auto Show.

So if anyone wonders what attitude executives in the operating divisions had toward the EV1, now you know why there was little, if any support at the beginning of the program. The lack of support eroded as the program continued and GM continued to lose share and cash.

The next entry will begin to discuss conflicts that emerged inside GM after the program started and Smith retired. For example, one GM executive told me over lunch, “Dabels, you’re my worst enemy.” Stay tuned.

#346 GM Electric Vehicle (EV1) — the Story behind the Story (Part 1)

05 Monday Aug 2019

Posted by in Corporate Policy, Education Issues, General Motors

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[Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.]  

The previous three (3) entries were about my personal experiences with Lee Iacocca, who many consider one of the most effective corporate executives of the 20th Century. I decided to continue the break from the craziness in Washington and discuss another part of my life that continues to generate considerable interest — The GM EV1, the first modern electric vehicle. (if you want to read all five entries as an ebook, download 2019Q4 GM EV-1 Story Behind the Story Booklet.)

There are two sides to the story — product and non-product.  The product side is reasonably well documented.  The non-product side story is far from complete, and what’s been told so far I think is misleading.  The next x number of entries — I actually do not know how many — will be an attempt to provide addition insight.  Stick around.  The series will be a good diversion and offer a good lesson, I hope.

More than 25 years ago, GM presented to the public the first modern electric car. The car generated widespread interest worldwide and helped boost GM’s image. Despite the positives associated with the car, GM management never seemed to endorse the program. After very limited production by auto company standards, GM pulled the plug. People frequently ask me, “Why was the program stopped?” “What could have been done differently so GM management would have kept the program?” “Did GM killing the EV1 set back development of electric vehicles for a decade or more?”

The questions and discussions about electric vehicles range from informal over drinks and dinner to Q&A following classroom lectures to interviews as part of formal research for a book or academic paper. For example, recently I was contacted by a professor doing research on electric vehicles. He’s been researching EV’s for a number of years and contacted me for more possible insight into the late GM EV1 program.

After two lengthy Skype calls, and roughly a day I spent filling in holes in such public information as Wikipedia, his comment was, “I’ve never heard anyone talk about what you said.” Just to calm the EV1 crowd, no confidential information was provided or discussed.

The focus on the “untold story” was the dynamic inside GM that I considered the primary reason GM management never fully supported the EV1. As will be described in this series of entries, my belief – the underlying reason for stopping the program had little to do with GM’s public claim of lack of demand and excessive cost. True that GM had limited cash but, as will be described herein, much of the cash shortage was self-induced.

As a bit more background, most companies struggle with introducing new technology. Such struggles are well-documented. Two books address the phenomenon of the internal struggles. If you’re interested in learning more, start with Jim Utterback’s, “Mastering the Dynamics of Innovation.” You’ll be shocked at how many companies tried to introduce a threatening disruptive technology but were unable to do so. To help understand more about why the difficulty, read Clay Christensen’s, “The Innovator’s Dilemma.” The books have been around a while but I think still relevant and certainly will help build an understanding of the difficulties of transitioning a company from an existing to a new, disruptive technology that without adoption could put the existing company out of business.

Before getting into the internal dynamics at GM, let’s clear up one gigantic misconception about why the GM EV1, and other electric vehicle models were not pursued. Despite implications in the movie “Who Killed the Electric Car?” from all that I know and experienced – and that was a lot – there was no conspiracy! There was no sinister backroom plot to kill EV’s. Yes, auto companies were frustrated with CARB’s (California Air Resources Board) zero-emission vehicle mandate.

And, yes, oil companies have repeatedly tried to thwart any regulation or legislation that reduces access to drilling, no matter what the cost to society or the environment. But neither of those killed the electric car.

What did kill the EV1 was dynamics inside GM. The dynamics are rarely, if ever, discussed. To understand how the dynamics evolved we need to review actions inside GM during the decade leading up to the introduction of the EV1 concept car. For many inside GM, those 10 years could have been titled “The Decade of Sour Grapes.”

I apologize for the length of this explanation. I still don’t know how many entries might be required to explain properly what occurred inside General Motors and why there was such resistance among so many executives to the EV1 program. Whatever the number of entries, I hope you find these entries enlightening and hope the decision to kill the EV1 becomes more understandable. You might not like the decision, and I certainly did not, but I think it will be more understandable following this series.

In 1980, the position of GM chairman transferred from Thomas A. Murphy to Roger B Smith. Murphy and Smith were polar opposites. Tom Murphy might as well have been the quintessential CEO from central casting. He was well spoken, self-confident, witty, kind and considerate. Smith, his successor, was short, insecure and had a ruddy complexion, squeaky voice and a tyrannical personality.

After Murphy retired I often thought if you could sit down with him, ask him what decision he considered his biggest mistake as chairman, after a couple of drinks he might say appointing Roger Smith as CEO/chairman. After a few years into Smith’s reign, I decided Murphy wouldn’t need a couple of drinks to admit the mistake. A cup of coffee would do.

One of the keys to success for OEM’s in the auto industry — GM, Honda, Daimler, Ford, etc. — is keeping products up-to-date, including significant styling updates. Keeping products fresh requires enormous amounts of cash. Without product updates, sales decline and the amount of cash available usually declines even faster. Further the effect of the decline can take years, if not a decade or two to turn around.

As obvious as the sales to cash generation relationship might seem, Smith took a different view. He believed sales and market share were less important than profit per car. Profit per car is important but without sales, all the fixed cost inherent in the auto industry gets spread over fewer units and the additional cost per unit starts to eat away at even the most profitable car lines. As the sale decline continues the company can be overwhelmed with red ink.

Inside GM the car divisions were profit drivers. Virtually all cash generated within GM was associated with sales of cars and trucks. While some individual product lines were marginally profitable, those product lines helped spread the enormous overhead cost.

Forcing each carline to be profitable also limited the car division’s opportunity to offer competitive products to counter the ever increasing number of imports, particularly from Asia.  The goal of the imports was to gain market share and many modals very attractively priced.  The Asian companies took a much longer view and were willing to subsidize certain models sold in the US with profits from carlines sold elsewhere.

Smith’s time horizon was much shorter and the emphasis on profit per car/truck, rather than overall profit, had a devastating effect. For reference, think about a grocery store. In order to attract people to shop, the store has “loss leaders.” If the store stops offering such loss leaders, what happens? Profit margins might increase but overall profit will likely decrease as people begin to shop elsewhere. And this is what happened to General Motors in the 1980’s under Smith’s strategy of emphasis on profit-per-car/truck rather than sales. People stopped coming in GM dealerships and started shopping elsewhere.

How bad was the strategy? Over the decade of the 1980’s GM market share of all cars/light-trucks sold in the US declined from roughly 45% to 35% — a relative decline of about 25%. What did that mean in terms of unit sales? During the 1980’s, the US averaged about 13-15 million cars and light-duty trucks per year. The 10 points lost by GM (45% to 35%) equated to sales of 1.3-1.5 million cars and trucks per year.

What did that mean for employment? 1.3-1.5 million cars and trucks per year equates to roughly five (5) assembly plants. Thus, Smith’s strategy resulted in unemployment for everyone who worked at those five assembly plants and unemployment for thousands more at GM suppliers. In addition GM made huge cuts in white-collar staff. (Yes, I understand there is another discussion that needs to take place about which auto companies gained share that GM lost. However, that conversation is not relevant to the dynamics inside GM that affected the EV1 program.)

Did GM profit improve under Smith’s strategy? In terms of earnings, if each car averaged say $2,000 variable profit (a reasonable estimate), then GM lost market share during the 1980’s reduced potential GM earnings over the 10-year period by at least $15-$20 billion. (Roughly $30-$40 billion in $2019.) In addition, GM profit margin declined as did overall profits. If you were the teacher grading Smith’s performance, a grade of “D-“would be extremely generous.

In addition to a strategy that generated lower profits and less cash, Smith directed GM to purchase Hughes Electronics, to purchase Electronic Data Systems (EDS) and to start the Saturn division. Where did the cash come from for these ventures? Funds from an ever smaller piggy bank that should have been allocated to help car and truck divisions maintain competitiveness were instead diverted to Smith’s various projects. As such, the divisions — Chevrolet, Buick and others — had even less money to update new products and less money for marketing. Of the GM car and truck divisions, only Buick managed to maintain market share during Smith’s reign.

The purchase of EDS created another problem. With the purchase of EDS, Ross Perot became GM’s largest single shareholder. Perot asked many thorny questions during the GM board meetings which irritated Smith. Perot irritated Smith so much he ordered GM to buy back all of Perot’s stock — for $750,000,000. (About $1.5 billion $2019.)

Where did the $750 million cash come from to repurchase Perot’s stock? Again, funds diverted from the car divisions that should have been used for product development and marketing.

Another major diversion of cash went to the creation of Saturn division. Smith created Saturn because he believed the existing car divisions were incapable of attracting younger buyers. Smith’s attitude angered many senior executives at the car divisions.

To make a bad situation worse, Smith insisted Saturn should be set up as a completely separate car company, even to the point where Saturn had a separate foundry to cast engine blocks. Such vertical integration was ridiculous. No one, and I mean no one, cares which supplier casts a particular engine block as long as it meets quality standards.

In addition to diverting funds to set up Saturn as an operating unit, Saturn never made money. The longer Saturn stayed in business the more the other car/truck divisions suffered as funds were diverted from product development and marketing programs to prop up Saturn. (Although not a topic of this set of entries, Smith’s negative impact on GM did not stop when he left office. The decline in GM share became almost impossible to stop because the product competitiveness of the divisions had fallen so far behind. In my view, GM’s eventual bankruptcy should be attributed directly to Smith.)

Hope you’re beginning to get an understanding of frustration among executives at the car and truck divisions. Hard to believe, I know, but there’s more background we need to cover. You mean like why Smith cast aside the organizational structure that had made GM hugely profitable for decades? Yes. And when the reorganization happened Alfred P. Sloan likely rolled over in his grave…and rightfully so. Time to pause for now.