William J. Holstein

An Intelligent Critique of GM, And My Book, From an Insider
April 8, 2009

Mr. Holstein,

Your book entitled Why GM Matters was enjoyable and it provided insight into their globalization structure, design centers, etc. GM certainly does matter, and they will no doubt survive even if it is under duress.

Having worked for GM for 31 years, and having some insight myself, it can be said that Mr. Wagoner failed when it came to being assertive. Yes GM is difficult to turn around on a dime. However, GM was bleeding cash at an alarming rate and the sense of urgency wasn't there -- not until the Fiat fiasco escalated. We began a quick downward spiral when GM was forced to separate from Fiat. Internal spending was severely scrutinized immediately following this event.

In the meantime the UAW was given access to GM's books and seen for themselves the dire need for change -- yet they made very few changes as it relates to immediate cost cutting measures. Hiring future entry level employees at a reduced rate was almost comical -- since it would be years before this would occur -- due to transfer rights of current employees, plant closings causing more excess of current employees, and finally the agreement to hire approximately 3,000 new hires in 2007 under the existing wage provisions when GM already had too many employees on the roles. GM then paid $70,000 to many of the 2007 hires in 2008 to reduce their excessive head count. All this under the direction of Mr. Wagoner.

Let it also be noted that the September 2007 strike by the UAW was, without question, designed to have its members ratify the agreement. And you can bet your last dollar that GM went along with this, too. A little fear and appreciation for ones job goes a long way when ratification is needed. The UAW simply didn't want to tell their members the truth -- that GM was in deep trouble and changes were needed, and fast! GM didn't really want it said either for other reasons. This process plays a role in the public being fed-up with GM, the UAW, and their products. They played the game of risk for the sake of not wanting to spell out the bitter truth.

Both GM and the UAW kept their fingers crossed (wanting to keep the status quo on both sides) while hoping revenues would increase, as many new highly praised products were being rolled out. Yet cash was still being depleted faster and faster. This is simply irresponsible leadership on both sides. The banking break-down merely escalated the problem that would come anyway -- GM and the UAW would have to change, and change fast -- not gradually as if the corporation had the funds.

Even after requesting federal loans neither side was making any significant changes -- again, refusing to make the necessary changes, and fast.

And lastly, the local strikes against GM in the spring of 2008 were designed to reach a settlement at American Axle. You can be assured I'm not guessing. Shame on the UAW , as they had already agreed to make those changes at American Axle long before they cried foul. In the end they returned with the same agreement they protested at the beginning of the Axle strike. But then how could GM take a stand when they knew the 2007 national strike was intended to do the same thing? Nothing like opening up a can of worms. The UAW must learn to tell its members the cow has run out of milk and GM must recognize the need to lead by example beginning at the top.

Who would have ever thought that it would take the federal government, the most inefficient money managers in the world, to FORCE GM and the UAW to finally be efficient? Times have changed.

Thank you for you time...

Tom Leventis
Livonia, Michigan