Reply #37: As a Detroiter, born and raised, and former GM employee, here's my perspective.

[TahitiNut]

When Roger Smith became the CEO of GM, the die was cast: the MBA 'abitrage' types took over. The "car guys" were told to STFU and do what they were told. What's that about? Simply this. There was a decades-long struggle within GM between the Guys Who Made Money and the Guys Who Made Cars. The GWMM crowd was all about trading paper and playing money games ... and the factory rats were mere window dressing for those arbitrage games. The GWMC crowd were all about cars ... big ones and small ones and cheap ones and expensive ones. The accounting guys were there to make it POSSIBLE to make cars. From the time Roger Smith became CEO, it was all about making money. ONLY. Close a factory and make money. Close down all of Flint and make money. Lay off workers and make money. Get rid of separate car line engineering (intrapreneuring) and make money. Get rid of separate assembly plants (forcing ALL car lines into the same mold) and make money.

The engineers were 'out' and the MBAs were 'in'.

The MBAs were in bed with the bankers. They lived in the same neighborhoods and belonged to the same country clubs and graduated from the same schools (Wharton and Chicago and Harvard Business Schools). They weren't smart enough to survive in the engineering schools. They harbored the resentment for being treated like the morons they were by the engineering students. The MBA/BusAd fraternities had good test files ... and the faculty cooperated by keeping the same tests and quizzes year after year after year. It was incest. When they became the bosses, they got even. They treated the "car guys" like shit. The engineering cooperative educational programs were shut down. The outreach into high schools to sustain 'auto shops' were terminated. After all, the MBA types didn't need them.

Roger Smith ONLY hired and promoted people like HIM. Inbreeding. MBA types ONLY hire and promote MBA types. After all, everyone knows that the greatest advantage of getting a Harvard MBA is NETWORKING ... being a member of the "club." Competence isn't required to "play ball" ... not their kind of "ball."


FWIW, Thorsten Veblen warned us about this 100 years ago.


In the interest of full disclosure, I knew Ed Cole ... one of the very last "car guys" to be CEO of GM back in the late 60s. Ed Cole was an extraordinary guy. I miss him.

While Roger Smith personified the MBA mentality, his mentor and predecessor, Thomas A. Murphy, is the one who said it all aloud: 'General Motors is not in the business of making cars. It is in the business of making money."

That's why GM failed. They forgot why they were in business.