Corporate psyches that drive the world

November 25, 1993|By Stephen Franklin | Stephen Franklin,Chicago Tribune

In Germany, the heartland of labor-management cooperation, Volkswagen recently has given a powerful, revolutionary dictum to its workers.

Thousands will lose their jobs, warns the company, unless they reduce their hours and accept cost-cutting concessions.

From Japan, where automakers once seemed incapable of stumbling, comes an increasingly woeful tale of cutbacks as auto companies scramble to counter declining profits.

At General Motors headquarters in Detroit, officials search for ways to shrink their auto empire, which remains the world's largest, to match a diminished U.S. market share.

Some terribly tough truths face the world's auto moguls. Once-powerful empires such as GM's have shriveled. Once-indomitable companies such as VW, Honda, Toyota and Nissan have had to cope with their mistakes, their lack of planning and their need to overcome massive negative economic forces.

Maryann Keller, an auto industry analyst for the New York-based securities firm Furman Selz Inc., is one of few who have laid out the vast forces at play in a clear, compelling manner.

She also is the author of "Rude Awakening: the Rise, Fall and Struggle for Recovery of General Motors."

That 1989 book remains the best telling of GM's incredible fall from its once regal ways, a tale about corporate arrogance and blindness.

Her focus then and now is on the corporate culture that nourishes as well as poisons an auto company. This time, however, she examines the corporate psyches of GM, VW and Toyota. Her rationale is that these are the auto giants that will lead the battle within the industry into the 21st century.

She writes: "During the next few years the company that will become the strongest internationally will be the one that holds the most progressive policies of growth and development as well as the one most attuned to broader issues of social responsibility and the car's place in society."

Who will win?

Probably not VW, Ms. Keller predicts. It has yet to fix its vision of what it wants to do, has yet to learn that the world auto market wants more variety, and has yet to come to grips with its "overpaid, unproductive work force," she says.

VW's chaotic relationship lately with its workers in Mexico is a measure of VW's cultural isolation as it tries to spread its wings internationally, she says.

Toyota's problems are not as drastic as GM's or VW's, Ms. Keller says. But it faces what she calls "big company disease." Grappling with Japan's economic slump, it must decide whether to be more aggressive at home and abroad and whether to

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continue to protect its weak Japanese competitors. If it fails to be more aggressive, she suggests, its Japanese rivals quickly will step forward.

That leaves GM. Ms. Keller's list of GM's problems is worth considering by everyone, especially retirees and workers in small towns where GM is the paycheck.

The company, she says, has too many factories, "too many car lines with too much overlap" and not enough of a footing in the industry's battlegrounds in the United States -- midsize cars and mini-vans.

But lo and behold, GM is the surprise candidate to succeed, in her view. Why? After facing near catastrophe in 1991, the company has transformed itself, she says. Deadbeat corporate lifers are out, and new blood circulates, thanks to John Smith, who became GM's chief executive as a result of an uprising by the board.

Maybe so. Maybe GM, under Mr. Smith, has learned how to make peace with the United Auto Workers. But from the way GM handled the latest round of contract bargaining with the UAW, there was no sign that GM was intent on forging a new direction for itself and making the union truly a partner in dealing with the realities GM faces.

There is no question about the drama, though. The automakers drive much of the developed world's economy. When they soar, the payoff is hefty. When they flop, the circle of suffering 'N boggles the imagination.

BOOK REVIEW

Title: "Collision: GM, Toyota, Volkswagen and the Race to Own the 21st Century"

Author: Maryann Keller

Publisher: Doubleday

Length, price: 287 pages, $25

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