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GM Closing Plants is Just a Good Business Decision!

Nov 28

I’m in the heart of GM country! My company, HRU Technical Resources (technical staffing), has worked with GM for 38 years! I have multiple family members that have worked at and retired from GM. GM is important to me, personally!

GM closing a few plants is the right decision. This decision might cost my company business and that will hurt.

President Trump can get really worked up over it and try to shame the GM executive team into changing their mind. The UAW can get all worked up and claim it’s the worst thing ever, but the reality is GM has to make the right business decision for the health of all GM employees for the future, not just for today.

In the past, GM wouldn’t have made this decision. They would have kept plants open and kept building cars that weren’t selling. The President would be happy. The UAW would be happy. And ultimately the U.S. Taxpayers bailed them out of bankruptcy. This time around GM, and their CEO Mary Barra, is making the sound financial, and very difficult, decision to close plants that aren’t making it.

Bravo, Mary Barra!

I feel for the UAW members who will be affected. I feel for the GM salaried employees who will be affected. It’s a horrible thing to lose a job and I don’t wish that upon anyone, ever.

This is still the right decision, as it will make the company stronger long-term and protect those jobs of the thousands of other UAW and GM salaried employees. You can’t keep building cars and trying to sell products that no one wants. GM doens’t do small cars as well as some of their competitors. Maybe never have. If you want a small/mid-sized car in the U.S. you buy a Toyota Camry or Honda Accord, or maybe even a Hyundai. The numbers don’t lie.

Every organization has to make unpopular and painful decisions to protect their business and help it thrive.

“Well, GM is going to profit $5 Billion in 2018, smarty pants, what about that!?!?!”

Yep, they are. That’s what a strong business is supposed to do, make a profit. All the stakeholders of a business demand it! Those stakeholders of GM are: UAW members, salaried GM employees, GM shareholders, GM supplier base, GM retirees, etc.  We’re talking hundreds of millions of lives that rely on GM being successful.

Healthy organizations go through times of growth and times of contraction. You have a product that is taking off, you add employees to meet market demand. Those products go out of favor and you reduce your employees base to meet that lack of demand. If you don’t, you go out of business and ALL employees and stakeholders suffer.

Mary Barra is making the tough decisions that her male predecessors were unwilling to make. Let that sink in a minute. Sure GM has closed plants in the past, but that was usually the last thing that happened, and only after they spent years burning cash and pushing forward no matter what the market was telling them.

So, yeah, this hurts. Closing plants and terminating people hurts. This is a strong business move, and it’s the right call for GM. Mary will be unpopular, but she’s doing what is needed for the whole, not the few.

I had a wise mentor once ask me a question. “Tim, do you want your team to throw you a party?” I didn’t understand. “Well, if you do want every employee wants, they’ll love you, and when you get fired, they’ll throw you a big party down at the local pub for your going away! If you do what’s right, they won’t like you as much, and they won’t throw you a party, because you won’t get fired. So, do you want a party or not?”

Mary doesn’t want a party, she just wants to do what’s best for everyone.

2 Comment to “GM Closing Plants is Just a Good Business Decision!”

  1. Yes, the only choice after many many many bad bad decisions. Building cars no one wants. Every auto maker has an SUV line that puts GM to shame. Losing the truck market to Ford, Toyota, even Nissan. The Cruze is a crap car compared to every “foreign” competitor. The largest car company in the world is the dumbest and makes the worst business decisions. Maybe Toyota or Honda should buy GM and fix the management issues.

    parker davis
    Nov 28, 2018
  2. My grandpa retired from GM! Boy, was he disappointed that we turned into grandkids who liked German sports cars. 🙂 And I agree with you, Tim – this was a TOUGH decision that I’m sure wasn’t made lightly.

    Mary Faulkner
    Nov 28, 2018

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