go to: http://www.hillsdale.edu/news/imprimis/archive/issue.asp?year=2009&month=02 and read the article/commentary by Joseph B. White of the Wall Street Journal, in Hillsdale University's Imprimis newsletter, it gives several reasons on why the automotive industry is in trouble, and some specific reasons as to what went wrong at GM.
As several commenters above have said, they spent more than they earned, which, to any of us means either earn more money or cut expenses (if only Congress would heed that--except they want to increase the income by raising taxes--which in turn means more expenditures, not necesarily balancing inflow and out go).

One has agree with those people who said bankruptcy is caused by spending more money than you make. That, gentlemen, is clearly obvious but the big question is why did GM spend more money than it made?
Perhaps they did have quality issues which caused people in the US to buy Japanese instead but I wouldn't know about that. In South Africa we don't get many American cars from GM but those from Germany (Opel), Australia (Holden but called Chevrolet) and Korea (Daewoo but called Chevrolet) are available.
These cars are all good and have been very popular here.
My opinion regarding the quality commitment at GM is that they spent too much money on their quality systems. Instead of just working with ISO/TS 16949 they insisted that suppliers also gain accreditation to QSB. This costs suppliers money and, guess who pays that bill!
They also have a huge department to administer their quality system which must cost them a fortune. Toyota on the other hand simply asks supliers to provide a quality product and doesn't hassle about QSB, Q1 or any other standard. If you're accredited to ISO 9001 or TS 16949 they're happy. Put simply, quality doesn't depend on how much money you spend on fancy systems and standards but rather how much commitment you have to getting it right the first time and every time.
Syd, South Africa

The problems that faced/face GM are really two-fold and they stem from the growth of the organization and how the pattern of that growth kept GM from correcting issues along the way.

The first issue was/is with product quality. While the design standards of the vehicles/products was always rigorous, the implementation of those "dreams" for lack of a better term was often short-circuited. It didn't matter if the design of a vehicle should take it to 250,000 miles in terms of life cycle, if you had one poorly executed component that failed every 20,000 miles. The idea that small variations within the product build would be smoothed over in the process became a way of life within the system that was built in GM. The thought that every contribution to a vehicle impacted it's overall performance...was lost. When the turn in terms of quality came for the American auto industry...the approach that had allowed sub-par products to come to market was still rooted not only in the production system, but also in the memory of the consumer.

The second area was in the cost of the dealer and servicing structure that was built. We have seen a very dramatic approach to this recently. Multiple dealers in large metropolitan areas are being eliminated, while small rural dealerships are staying. Why? When many of the urban dealers were established, our infrastructure forced us to deal with very local groups. Today, it makes sense to have larger single-point dealerships serve a single metro area and be able to provide a higher level of technician/parts/service, the ability to get there is available and the vehicle quality is such that you do not need service on "every corner". GM's Dealer franchising agreements made it almost impossible to consoldate. We can't judge what was passed on from an earlier time...we just have to deal with it.

Most Schools don't have a "Quality" degree program. You have electrical, mechanical, industrial, etc...
Every quality engineer or supervisor "moved" in to quality from some other area. This "quality afterthought" is persistent through out every company I've worked for, including General Motors. General Motors was great as a new college grad for me, until I began to realize that there was no long-term commitment to really improve, mainly because the acknowledgement of competition in the marketplace was slow, and the internal divisions between the management, employees and union are too wide. As Quality Methodologies are a tool to become competitive and to resolve these divisions, GM's downfall is simply implementation. Everyone knows there is a certain period before any initiative loses steam; most people just wait them out. Union workers, supervisors, mid-level managers, all place side-bets on when this one--"the next big idea"-- will go by the wayside. Even those who understand the tools, who know what benefit these tools could bring, must internalize their passion or fall prey to the condemnation of their peers. These are the most valiant of the quality professionals: My friend Sal, a 20 year veteran, when I had only 2, would pull his id badge which was attached to a retractable lanyard similar to the pull string of an old talking doll and say " I love my job" with all the hollowness that told me I would not last. I quit within the next couple of years.

It seems to me that every opinion has part of the truth, or at least is the effect of the root cause. I have read the articles of both, David Schwinn and Mike Micklewright, on their GM experience, as well as the experience of some other insiders, and I have concluded what is obvious to me, human nature is present at GM as it is present in every company that struggles and starts a quality program: they had to move out of their comfort zone, and they didn't.

In spite of the words of former or current CEO's, the way of doing business at GM is the only way they know and they don't have the leader to motivate and make execute the necessary changes. That is exactly what happens on every company that sets about a new quality strategy. I have seen some companies that begins their quality program with their certificate in mind, and that is the only purpose behind their effort. Other companies seriously try to improve their operation, but their management expects that the strategy "works the miracle" alone, and they move everything wishing the status remains. Of course, the results also remain.

I followed closely the Ross Perot affair at GM, starting with the acquisition of EDS by GM. What surprised me was the decision of Roger Smith to bring Ross Perot into the Board Room. It was an announced crash with the only possible finale, the removal of Perot, after his big mouth declarations critizising the GM way of doing things. Originally, inside the board room, later, outside the board room and, finally, outside GM. Since then, I have been waiting for what already happened to this glorious automotive company.

I worked at GM in the 1980s and I have since worked for several automotive suppliers. I saw no and still see no quality practiced in the facilities. They make numbers (fraud) to present to customers and the customers do not check the veracity of those numbers. I have not met a quality manager or so-called quality engineers who understand the theory behind the numbers. Many cannot even tell you what a standard deviation means. The companies MUST get an educated workforce if they want to use statistical methods effectively and successfully.

The problem is not the message it is the fact that manufacturing no longer matters in this country. While the folks at GM said all the right things (I was there at the time, GMAD Tarrytown) they did not walk the walk, and most manufacturers still don't. Why concentrate on cheaper, better, faster here when I can get it overseas now and satisfy the god of the next quarter. The corporate talking heads have no love for manufacturing, it is a means to an end, money. If that means can be found somewhere else, China, Vietnam, whereever, so be it.

Hi Jim,

It is nice to see that you are still active. We moved to our lake home three years ago and most of my work is volunteer activity although I am doing a seminar this week in the Twin Cities.

You asked for comments on the demise of General Motors. I have done work with auto manufacturers on three continents. The best one is the Fiat plant in Poland. They not only are the largest Fiat plant but also produce cars for Ford and do work for GM's power train division. As a user, I would say the biggest problem of GM is the image they developed over the years of poor quality and reliability. I used to keep an index card in new US cars that I bought so I would not forget any problems when I took it back to the dealer. Then when I switched to foreign cars I found I did not have to keep such a list because I experience no problems.

But my observations as a consultant revealed a larger problem and that is redundancy in management positions that made it difficult to execute direction or communicate both up and down. At the time I was working with both, Wal-Mart and GM had about the same number of employees. Wal-Mart had four levels of management and GM had eighteen. Wal-Mart could and did make decisions in real time because they were not shielded from the work by layers of management.

As always, I am full of opinions.

Lou

As you said, they were doing the right things, I think two things doomed them to failure. One, they were just too late in making changes. Japanese companies had been making improvements for a long time and GM, while improving, was just too far behind to keep up. The other is the entrenched culture they had to overcome. They were trying to turn a battleship and just couldn't get it done before running it aground.

It seems to me that the root cause of the failure of GM is the lack of teamwork between Union and Management. Look to the Japanese for examples of success. Their culture prefers that competing teams end their games in a tie. They want the same for all. We in America compete to beat the other guy even if they are on the same team (company). Selfishness is at the core. It is a cultural thing.
Also, the Japanese quality revolution came from the floor of the factories. Are our managers really listening to what is said from the factory floor? Are they asking for advice and valuing it? Why do the workers not feel empowered to question the wisdom of the management? Because the management does not value or trust the workers. Quality is a culture! If we are not converted to believing in quality and empowered to contribute to our companies we will not succeed. Our culture of self is our biggest enemy. Evidence of this is the number of lawyers we have (suing to get our way or to take advantage of others) and the large difference in pay - worker to executive. This divides us. It does not unite us. This must change (as it I'm sure has in many industries).