As Toyota delays new Prius plant, will exec bonuses be next next to go?

Posted by: Ian Rowley on December 15, 2008

As expected, Toyota is delaying the opening of a new Prius plant in Mississippi, highlighting that even gas sippers aren’t immune to collapsing auto sales. The plant, near Tupelo, was originally going to make Highlander SUVs from late 2009. Then, as part of a big shakeup of the company’s U.S. production, Toyota decided it would begin making the new Prius at the site from 2010. Now, Toyota will wait until the market starts picking up. According to reports, Toyota will complete the construction of the plant’s building but will delay installing machinery.

The move looks like the handiwork of Toyota’s recently formed Emergency Profit Improvement Committee which, led by CEO Katsuaki Watanabe, is searching for ways to trim costs and reevaluate the size and timing of all new projects. Among other cutbacks, Toyota and Isuzu have shelved plans to develop a new diesel engine together, while Toyota may hold off planned capacity increases in India, Brazil and China and the revamp of a production line at its Takaoka plant in Japan.

The savings could help Toyota avoid falling into loss during the second half of its financial year which runs through March. At its most recent results announcement in late October, Toyota said it would make around $6 billion this year, but it had already booked all but $200 million of that during the first half. Since then auto sales have continued to struggle and the yen has risen to around 90 to the dollar, further hurting earnings.

In another sign of how seriously Watanabe and his team are taking the current crisis, reports over the weekend say Toyota may cut board member bonuses to zero for the current financial year, saving a further $11 million. While that seems reasonable, given the circumstances, it’s notable that Japanese execs earned far less than counterparts at Detroit rivals during the good times. Last year, Toyota says it paid its 25 most senior executives a combined $33 million in salary and bonuses. Ford paid its CEO Alan Mulally alone over $20 million in 2007 in salary, bonuses and stock options while GM chief Rick Wagoner pocketed $15.7 million (GM points below out that the cash portion of Wagoner’s income was $3.3 million with the rest made up of stock options and other benefits).

Still, while not exactly light at the end of the tunnel, there is at least some better news for Japan’s automakers. Reports reckon that, as global demand falls, Toyota is seeking a 30% cut in the price it pays for steel for the year ahead. That would save a further $3 billion.

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Reader Comments

Hugo van Randwyck

December 16, 2008 04:16 AM

The costs of a car include: buying it, maintenance/repairs and fuel. Maybe Toyota could look at ways to sell biofuel/biodiesel kits for cars, e.g. trial ideas and supply chains. Some biofuels/biodiesels can grow anywhere, and the conversion process is simple. Mass production of conversion kits and seeds/plants could help lower costs more.

Ron

December 16, 2008 08:44 AM

Toyota, which is highly profitable, once again appears to be much better and faster in realigning it's objectives and actions with the recession than the Big Three, who are in Big Trouble..., yet keep shuffling papers and protecting outdated privileges, while demanding tax payers money.

John McNeil

December 16, 2008 08:47 AM

I find it amazing that the Japanese automakers are rushing to the deep south to build cars. That is putting the people who can afford their cars out of work in the North and West. The profit committee had better review " The Wealth of Nations" or be ready for a permanent lowering of the standard of living in the US and the contraction of the auto market.

Dan

December 16, 2008 08:57 AM

Toyota has the right recipe for success. How can these American CEOs be milking so much money out of their companies when they are losing money hand over fist.

mark

December 16, 2008 09:38 AM

This is how an intelligent company reacts to a downturn BEFORE things hit the fan... It's not fun, and less growth means fewer jobs, but having the insight to see where the trend is going is better than waiting until you get there and ask for a life preserver. Wagoner at GM should read this article.

FBEye

December 16, 2008 10:55 AM

It seems as though Toyota got caught-up in the same trap as GM, Ford, & Chrysler, by making bigger trucks & SUV's and creating a vast product line which is now coming back to haunt them. Too many vehicles and not enough customers is a recipe for disaster. Even Toyota will suffer in a big way with lower sales, and they'll feel the effects of this recession that we're now in. Maybe it is time to overhaul Toyota's executives and get fresh thinkers in there now.

larx

December 16, 2008 11:29 AM

I love reading about Toyota. These guys know how to evolve so well. Auto industry in the US is NOT dying. It is moving to the South.. where there are no unions.

aemmac

December 16, 2008 11:50 AM

They move to the south because most southern states are right to work states with strong anti-union sentiment. No need to review "Wealth of Nations," they know very well what they are doing. I also highly doubt the profit committee of Toyota is at all concerned with the standard of living in the US.

DW

December 16, 2008 11:51 AM

to hear some of Toyota Boosters here, I would have really expected they would have done this back in September instead of waiting till now. They move some quicker than others. but this plants not in production so that makes it an easy call. Now they did after much internal debate shutdown their Texas truck plant. so far its been shut down for 3 months. now word when it reopens. and those workers are still getting paid. sounds like what Detroit would do doesn't it?

ps

December 16, 2008 12:39 PM

John, the wages that the Japanese transplants pay are pretty close to those in the north and west- and the offshoot may be more of these cars being sold in the south, one of the bastions of the big 3- If they could build a plant in the north or west and have a FLEXIBLE labor force, they would.

Ana

December 16, 2008 01:07 PM

Interesting to see the pro-Toyota spin. Can you imagine the criticism GM would get if it decided to put a hybrid investment or the Chevy Volt on hold?

bob

December 16, 2008 01:29 PM

The American CEO's are not interested in how much there companies make as long as they get theirs. I really enjoyed that the combine total of the 25 top paid in Toyota's most senior executives a combined $33 million in salary and BONUSES. While Ford was well over half this to the CEO.

Julie M. Gibson

December 16, 2008 02:10 PM

I work for GM and would like to add some context to the salary figure quoted for our CEO and Chairman Rick Wagoner.

His compensation for 2007 included salary of $1.5 million and a bonus of $1.8 million in recognition of significant accomplishments including the historic 2007 UAW contract, $9 billion in structural cost reductions over the prior two years and a slew of successful new product launches.

The bulk of his remaining compensation for 2007 was in the form of at-risk, multiple-year stock and option awards that did not pay out in 2007 and conceivably may not pay out for the foreseeable future. The compensation figure quoted ($15.7 million) includes a theoretical cash value for those awards and a $3 million increase in the accounting value of Mr. Wagoner's pension largely resulting from the lowering of GM's official retirement age from 62 to 60.

Far from "pocketing" $15.7 million, Mr. Wagoner took home approximately $3.5 million in 2007. Not an insubstantial sum to be sure, but a far cry from the kind of excessive executive compensation that has so angered the public and shareholders in recent years.

A few other quick points I would like to make:

-Mr. Wagoner has not had a base salary increase since 2003; he voluntarily cut his salary by 50% in 2006 25% in 2007

-84% of Mr. Wagoner's compensation is at-risk, meaning its value is dependent on the stock price and other business performance measures

- And, as most of you are already aware, Mr. Wagoner has made the determination to take $1 in salary for 2008 as a demonstration of his commitment to the survival of the company and the interests of taxpayers.

Thank you.

Julie M. Gibson
GM Financial Communications

Not a commie, I just want FAIR

December 16, 2008 03:39 PM

In my opinion, NO single executive is worth more than a million dollars in compensation... I wonder what these guys do with all of their money? How many luxury houses can you accumulate at $20M/year? Quite a few, I'm sure. It's wrong, and immoral. These crazy-high income guys should not only be stripped of their current incomes, they should be forced to forfeit their past income to the government. I wonder how quickly we could pay down the public debt if these fatcats coughed up their ill-gotten gains?

Tad

December 16, 2008 04:22 PM

This problem was not created by the automotive companies. It has been created by bankers lending money to people who cannot afford to pay it back. "Free trade" is not free trade. Our government has sold our economy for the benefit of the ultra rich. Goods made in China aren't cheaper there is just more profit in them for the producer. If we don't make anything here the middle and upper middle class will be lost. Free trade should be free trade, No teriffs period.

JB MacHine

December 16, 2008 08:41 PM

It is interesting that GM would post a response. I applaud them for participating with the populace.

The funny thing about the CEO's of most corporations is that they are not leaders, but merely people warming a chair. They are no different than their low level employee. We plainly see this with the bank failures, the Big Three, and many other companies to come.

The New York stock broker runs the corporations. Everyone rules by the almight penny, and it has outright killed American innovation, and any chance that America would gallop out of this recession into another innovation boom.

Well, we have the limitless opportunities of startups and the Internet to generate wealth and jobs for the average person...

chr$

December 16, 2008 09:05 PM

Comment from a European in Japan working for automotive industry :
Please read the EU automotive sales figures for November, and you will fall back to earth about the Japanese.
Exemple :
TOYOTA = -33.3% in Nov08vs07 and -14.7% for the YTD
HONDA=-34.3% in Nov08vs07 and -15.9% for the YTD
worst than the market!

Meantime VW/Audi/Skoda/Seat group is doing better than the market trend....

And you can see how unsignificant Honda is in the EU...

US market does not tell you the whole story. So please do not generalize.

Japanese engineers are by no means better than than GM or Ford ones. Main difference is in my opinion the fact that their management is less focused on short term easy gains/profits and more in long term customer satisfaction.
This makes a BIG difference when you get to the engineering details and the way cars and powertrains are validated/tested....

Frank

December 16, 2008 11:24 PM

Regarding the posting by Chr$. I also work for the Japanese Automobile Industry and it is not as simple as the poster claims.
Japanese cultural upbringing prides itself and sees beauty in perfection. Nearly every Japanese does his assigned duty with great pride wether a janitor or an engineer. Quality has always been part of their norm and unlike America.
Quality in America is a cost in the engineering details whereas a requirement in Japanese lives.
Visit Japan and just onserve.

Rob

December 17, 2008 10:40 AM

Although GM and Ford have been steadily losing money since 2005, Wagoner and Mulally have padded their bank accounts quite nicely during this period. Over the past two years, Wagoner and Mulally took home approximately $24 million and $49 million, respectively, in total compensation. Because Chrysler is owned by private equity firm Cerberus Capital Management, less is known about Nardelli’s pay package. But while serving as CEO of Home Depot, Mr. Nardelli and the board of directors came under fire from shareholders for problematic pay packages, eventually leading to his resignation. So if history is any judge, we can safely assume that Nardelli has his hand as far in the till as the other two.

Read more at ....

http://globalinvestmentwatch.com/2008/12/05/5-reasons-to-oppose-a-bailout/

sh007r

December 17, 2008 06:20 PM

""same trap as GM, Ford, & Chrysler, by making bigger trucks & SUV's and creating a vast product line which is now coming back to haunt them.""

Not True.
Americans WANT big cars and SUV's and since gas dropped people are buying them much faster than small cars.
How did it happen?
The gov't has killed the US auto biz since 1978, with CAFE standards, safety regs, laws and then siding with the unions. Thats the real base cause.
GM's designers are second to none.
I hope the Big 3 are here forever building the cars we WANT, not what algore wants you to buy.
BUT, the UAW has to give much more than it has. I've been self employed for 2+ decades and lost much more than half of my life savings, my retirement account, over the last few months and I'll be darn mad if I have to pay for UAW's retirement plans thru a gov't bailout. If they don't file BK, Chapter 11, they will be back for more and they could fail completely.
It's basically 'you file now and take less' or they might have NO job at all.
It sucks, but so did my losses, and it seems as if our Dem leaders might have created ALL of this mess (with help from the GOP).

Pat West

December 17, 2008 11:56 PM

The European market is as chauvinistically primitive as regards Japanese cars as the American market was 40 years ago. The Europeans produce nothing in the way of economic small cars that even remotely compare to a Honda Civic or a Toyota Corolla. Given time, the same thing that happened in the U.S. and Canadian markets will happen in Europe, as their sleazy econo-box industry goes under! Of course, it has gone far beyond the whole economy car business in North America, where the largest selling mid-sized car is the great Toyota Camry, and even Bill Gates drives a Toyota Lexus. The Japanese are also about to capture what is now left of the rather ludicrous North American “Pick-up Truck” market. In short, Detroit has blown the entire market and, eventually, so will the Europeans.

Sean

December 18, 2008 03:34 AM

On Quality:
Everyone is arguing about the extenuating circumstances of the current economy, the relevance of unions, the unfairness of bailing out financial but not manufacturing companies, etc. All this aside, the root of Detroit's problems is its quality standards, which has deep cultural roots.
My parents emerged from the deep recessions of he 70s and 80s with the conviction that a constructive contribution would be if they were to support America by "buying domestic." So we usually had Ford, sometimes Chevy, cars growing up. But things came to a tee when my parents bought a Taurus in the 90s. That car was a nightmare. Long story short, after countless problems, they wrote Ford a detailed letter citing the issues they encountered. Ford's response, paraphrased: "We are sorry that was your experience. However, the vast majority of our customers have reported that they are satisfied."
Nice form letter Ford. Funny how you lost multiple customers for life, and didn't even notice. "Post-letter," the whole extended family has gone to Honda/Toyota.
That is my experience...you guys can talk as much you want about executive bonuses, auto shows, gov't plans, markets.... I am not making any different consumer decision until I see a major improvement in product quality from the American car companies.

Ron Johnson

December 18, 2008 06:47 AM

Julie,

What makes Mr. Wagonner worth a seven figure salary? He has presided over the downturn and embarasing panhandling of a once great company. He flys in his corporate jet to beg for government welfare?

The model should be Steven Jobs at Apple. He came in, takes all of his compensation in stock, and turned his once dead company, Apple, into an industry innovator.

Mr. Wagonner, until recently, kept GM's vision of buying bigger and bigger gas guzzlers that ultimately no one wants.

If I had a crystal ball, the next vehicles will come out of Silicon Valley with manufacturers in Tennessee with executives like Jobs who put their money where there mouth is.

GM, Chrysler, et. al. can sell their facilities to them at a Chap 7 sale.

The country will be better off for it in the long run.

Ron

December 18, 2008 07:13 AM

Interesting that GM (Julie M. Gibson) only participates in this discussion when the salary / bonus of its CEO is discussed....
Surely there are other more urgent and more importnt issues to discuss at GM, since years. Maybe it is because of this myopic field of interest that GM is now in such bad shape...

Mike

December 18, 2008 10:56 AM

Note to Sean...I too decided after a bad experience with an American manufactured auto to purchase the #1 rated Quality car in America..A Toyota Camry.
At 78,000 miles the engine disintegrated from a failed crankshaft bearing. The diagnosis was that the oil journals were too small and accumulated sludge caused an obstruction causing the bearing to fail.
Toyota claimed it was the failure of the owner (me) to properly service the engine.
Even after I produced documented evidence that I had followed the proper servicing schedule they were very reluctant to accept full responsibility.
After the engine was repaired and in the process of driving home from the repair shop, the transmission failed.
So let's not over genaralise about the Japanese sensitivity to perfection and customer satisfaction.

zeeman

December 18, 2008 12:12 PM

Here one way to look at it, GM and Toyota sold the same amount of car last year....Toyota made 1.3 billion, GM lost 9 billion...what's wrong with this picture?

Adam Franklin

December 18, 2008 12:26 PM

1. Leadership is all about getting ahead of issues and taking a bold stand. I applaud Toyota management. 2. Rick Wagoner and top GM management need to step down, without massive golden parachutes. 3. Julie M. Gibson, the "historic 2007 UAW contract" is anything but. Until legacy issues like pensions, health care and the job bank are truly revamped and/or eliminated, the UAW will continue to be an anchor that is keeping the "Little 3" from thriving. 4. Eliminate the Pontiac, GMC , Buick and Saturn brands. 5. Restructure the dealership networks - eliminate the huge middleman - commissioned sales - be bold and sell direct-to-customers via online sales. Doing so will save the auto industry billions and consumers millions. Laws will need to be changed - are you listening, congress?

RGinArizona

December 18, 2008 12:27 PM

Our auto industry, the Big Three and their suppliers, dealers and such are in trouble-yes we know. Personally I think they are digging a bigger hole going to Washington with their hands out.
Their problems are not new and only somewhat aggravated by the current slow down-the problems are systemic from work rules, legacy costs AND Federal meddling with CAFE standards and such. They get Federal money they will get more of the same work rules, legacy costs AND Federal meddling with CAFE standards and such.
Theirs is exactly the situation Chapter 11 was written for-to give a viable entity a new chance. Compete or die; I resent being asked for money from people who make more than I make.

Mike

December 18, 2008 01:28 PM

Wow. Love all the "Toyota is so smart" comments here. What is left out is that their home market is almost completely closed to foreign competition. It's a little bit easier to be so nimble when you know you can count of banking millions of Yen in your backyard.

John

December 18, 2008 01:51 PM

My understanding is that a UAW assembly line worker will make, on average, something like 20 dollars per hour. However on top of that there are more retired UAW workers on pensions than there are working. Therefore the only way GM or Ford can survive is to increase market share, or cut and run on the old pensioners who in some cases I am sure are too old to get a new job.

Sounds like a preview of social security circa 2020.

Hershey

December 18, 2008 02:24 PM

In reference to the executive compensation. Has anybody looked at the salerys of some of the professional athletes ?

joecool

December 18, 2008 02:29 PM

There will never be "free trade", tariffs or no.
Other countries do not have to play by USA rules & vise versa. So tariffs are necessary to keep the playing field level.
Foreign economic conditions like wages & the value (or artificial) value of the dollars etc are also not the same as the USA.
I have owned Fords, Hondas, Chryslers,GM etc.
I find that the Hondas etc are much better vehicles that take a lot of punishment & run a long time without huge costly repairs.
I cannot say the same for the Big 3.
All my Ford pick-ups (I've had a lot of them) run like crap, cost too much to repair, and don't last.
I have a Volvo semi & it is great.
So you tell me-who's more competitive?

Chris

December 18, 2008 04:49 PM

Dear Ms. Gibson,

What is "historic" about the 2007 UAW contract? Good grief, if I ran my company like Mr. Wagoner has done his, I'd already be bankrupt and without the ability to beg and steal from the American public either.

Toyota is offering clear and concise ideas to trim expenses while it takes an advanced business degree to figure out your convoluted statement only addressing Mr. Wagoner's salary for crying out loud.

GM sells overpriced inferior products due to decades of mismanagement, poor business decisions (including the UAW nonsense) and yet even now the best you can offer is to boast about Mr. Wagoner's awesome stupendous magnificent magic and wondrous work with the 2007 UAW contract? Eeek!

Get your resume in order Ms. Gibson.

Deeg Snyder

December 18, 2008 05:21 PM

So, hypothetical situation: You have two car companies battling for market share, and over the past year, each sell relatively the same number of cars throughout the worldwide markets. At the end of the fiscal year, one makes several billion dollars, the other loses almost twice that sum.

Incintive programs, warranty claims, recals, product R&D, employee costs etc.

There is no formula which cannot be traced back to the UAW, or the Corporate decisions made by GM which squarly show their inadequacy for foresight, responsiveness, or basic understanding of their industry.

Matt

December 18, 2008 10:59 PM

Pat's comments regarding EU cars is just ridiculous. Audi just built their 1 millionth A3 and practical "Civic" type cars have been built in EU for nearly half a century, remember the VW Bug? I just ordered an A3 and I have to wait until probably March to get it. Clearly the Europeans are doing something right. Regarding the comments of Japanese quality superiority, many Honda Accords built just a few years (including my wife's) ago suffered bad trans bearings due to poor lubrication design. Toyota has also had their share of quality issues especially with Avalons and I know several people who have had to replace transmissions in their Lexus.

My complaint with the Big 3 is that their cars are so boring. Going back to at least the 50's American cars were and still are overweight pigs that are sold on new "styling" each year rather than engineering and handling features. My first car was an MG TD. It had something like 60 HP, but was built with rack and pinion steering, had an independent suspension and it handled far superior than anything the American companies made for years. That mentality of selling "style" is still with the Big 3 and I have no hope they will ever change. I would gladly buy "domestic" if they would for once focus on suspensions and handling rather than selling cup holders and video screens.

oldwino

December 18, 2008 11:09 PM

For all the Toyota bashers, the Camry(90% of them built is US), best selling car 9 of the last 10 years, is built in KY and Indiana. It has a higher domestic content than the Ford Fusion, assembled in Mexico. Toyota doesn't import every vehicle that is sold here. The plants in the US also use alot of the same suppliers as the big 3. Just to enlighten the unimformed;

CA - Corrola, Tacoma
KY - Camry, Camry Hybrid, Solara & Avalon(built only in US)
IN - Camry, Sienna & Sequoia(built only in US)
TX - Tundra(built only in US)
WV - Engines & Transmissions
AL - Engines

Toyota built 1.3 million vehicles in North America if you count Mexico & Canada.

Canada - Corrola, Matrix, Rav4, RX350
Mexico - Tacoma

What's really a "foriegn" car? Just the name on the car or where it's built using some of the same parts suppliers as the big 3. Ford Fusion from Mexico or any of the Toyota car built only in the US? Honestly.

Pete

December 19, 2008 12:39 AM

Yes, Japanese brands are good cars. My wife and I owned a Civic that ran like a top and got great mileage. The drawback was it was so small and thus unsafe in a collision.

In defense of the domestic auto brands, they have repeatedly tried without success to establish themselves in Japan and Korea, but have met with limited success due to rules that sharply limit foreign makers from entering those markets - everything from inspections dockside, to price dumping (undercharging us for their exports, charging their domestic markets more for the same car), and central government ministries (Japan's MITI). In short, Japan has been very protectionist of its own auto industry.
Why do we not make US cars in Japan, as they do here? Answer: they won't allow it.

BS Detector

December 19, 2008 12:43 AM

All you people are missing the fact that Japan subsidizes it's auto industry. Better so a little research.

Steveo

December 19, 2008 01:17 AM

A lot of interesting comments - most of them off the mark. Toyota is profitable due to its incredibly successful business philosophy of Toyota Production System aka "Lean Manufacturing". This philosophy is continually applied to all aspects of the business. By ruthlessly focusing on processes to continually identify and eliminate waste (non-value added activity) the company is able to stay profitable. It is WORK however - it is not a one-shot fix, but a never ending treadmill that is the price of success.
Much of this is born out of the history of the company - which nearly went bankrupt several times over the years.
Indeed the founder of the company quit in disgrace at one point during the 1930's.
Sadly GM knows all about "LEAN" - since the first Toyota plant in the US was a joint venture with GM in Northern California called NUMMI. The problem is GM has never been able to deploy "Lean" across their enterprises at anywhere near the correct level to be profitable. ( Imagine the UAW actually trying to help eliminate non-value added work!) The domestics build decent product - that's not the problem. The problem is they just can't control the cost side of their business. Its like the old joke - they lose $200 on every car -- but they'll make it up in volume!
Certainly UAW is part of the problem - but the entire culture of the BIG 3 is really the culprit. They are up against competitors who are playing the game differently - but they can't seem to catch up. Ford - to their credit - has hired a CEO in Mullaly who is a big proponent of "LEAN" from his time at Boeing. Hopefully he'll be able to get FORD culture to embrace this new business approach.

Greg

December 19, 2008 01:45 AM

I own a 1997 Toyota Corolla that now has 220,000 miles on it. It is quiet and runs like a dream. I won't go back to either GM, Ford, or Chrysler.

No to the auto/UAW bailout!

Barbara Knight

December 19, 2008 09:00 AM

I bought a Chrysler product out of college during the last government bailout and the car was a lemon. (over $6000 in repairs, towing fees and auto rentals in the first 6 months for a new car.) When I tried to make a claim on the state's Lemon Law, the dealership slapped me with a Cease and Desist order. Despite all of my repair records, I learned that the Lemon Law was just "Feel Good" legislation because no politician wanted to attack a member of the Big 3. (Sound familiar?)

I sold that car and swore I'd never spend another dollar on a Chrysler product. Now the government is going to force me to spend my money on a company whose business practices should make them go belly up.

People will continue to buy cars, it'll just be other manufacturers, those who understand the market and the importance of quality. Let Chrysler and the others go bankrupt. Their suppliers will sell more to the other companies and their employees will find work (minus the generous Union benefits) at those companies as well. Ironically, the executives will probably also find work despite their "F" performances.

Ian Rowley

December 20, 2008 12:04 AM

Thanks for all the comments. Also, apologies if it's taking longer than usual for me to approve them. I'm in Indonesia, a country where every second car seems to a Toyota, at the moment and online only periodically.

One quick response to RGinArizona. While it's true that Japan is a very tough market in which to see U.S. cars, that doesn't mean the Japanese make a lot of money at home. On the contrary, most analysts estimate they make very little in the home market, which had been touching twenty year lows in terms of sales long before the current economic crisis. Of course, that hasn't stopped BMW and Mercedes making good money over the years, but that's because they can charge premium prices and people will still pay.

Finally, BS Detector. That's a pretty lazy comment, given recent developments.

cdk

December 29, 2008 02:37 PM

As I had saisd before Pay for Performance, all execs should be paid $15.00 an hour until the company turns a profit, then bonuses!

PJ

May 14, 2009 04:40 PM

I am a GM employee and while some criticisms are fair, including poor quality a number of years ago, huge improvements have been made in the last 5-10 years. Here are a few facts from our company website:

GM’s brands (Cadillac, Chevrolet, Buick, Pontiac), representing 80 percent of our total volume, are ranked above industry average as measured by 2008 J.D. Power Initial Quality.

GM and Ford tied for the leadership position in the 2008 J.D. Power Initial Quality Study – 11 models ranked in the top three of their respective segments.

Since 2002 GM has earned 65 percent of all J.D. Power North/South America assembly plant quality awards (more than all other manufacturers combined.)

Since 2006, the total number of warranty repairs at GM dealerships have been reduced by 48 percent.

GM dealers are among the best in the industry when it comes to a quality experience for customers. Since 2004, all GM brands have ranked above the industry average and better than many of the top Asian brands according to J.D. Power and Associates Customer Satisfaction Index and Sales Satisfaction Index.


LoveSee

May 21, 2009 01:42 AM

"I learned that the Lemon Law was just "Feel Good" legislation"
http://www.avi-converter.net Toyota has also had their share of quality issues especially with Avalons and I know several people who have had to replace transmissions in their Lexus.

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Want the straight scoop on the auto industry? Detroit bureau chief David Welch , Dexter Roberts and Ian Rowley bring daily scoop, keen observations and provocative perspective on the auto business from around the globe. Read their take on such weighty issues as Detroit’s attempt at a comeback, Toyota’s quest for dominance and the search for an efficient car.

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