By January 11, 2006 2 Comments Read More →

GM told: Cut every salary

Detroit Free Press Article

How about “Reduce All Waste” as a rallying cry?

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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2 Comments on "GM told: Cut every salary"

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  1. Mike Lopez says:

    After reading the sidebar about York’s 5-step program for GM, the first thing that came to my mind is that this guy has made a sandwich with gourmet bread, but rotten meat. Suggestions 1 and 5 sound good. Basically a “get real” message. Suggestion 2-4 are rotten pieces of salami, ham, and bologna. 2. Cut everyone’s pay? Okay, cut executives who are already paid too much, but leave everyone else out of it. You start cutting pay and the rotten morale that already exists will go negative. You can cut pay at some companies, but those are the ones with charismatic leaders and employees that passionately love their workplace. Can GM claim that? I think that at the water cooler, the daily talk will be about which online job sites were surfed the entire day. Before cutting salaries of people that are working, shouldn’t they look at the Job Bank that is paying people not to work? 3. Sell Hummer? Isn’t that the most successful brand at GM? How about selling off or closing down something that is losing money? This sounds like someone wants to cash out of their high priced stock and get a bunch of cash. The problem is that Hummer is not stock. It is a company. You don’t dump your best product for short term gain. 4. The investors that still hole your stock highly value the dividend. If it is cut, I would expect GM’s market share to fall.

  2. Anonymous says:

    GM has already cut pay for the salaried people. There has not been a raise for 18 months for anyone. I do not expect to see a raise this year. The 401K mathcing contribution is now zero. The part B retirement contributions have been cut. The older employees will stick with GM for the pension and health benefits. However anyone hired in the last few years has no pension, no retirement health care. This younger blood is will begin to drift away if raises do not occur in the salaried ranks. The phone calls from recruiters are aready making the rounds for some of the folks working in hotter areas. GM has problems hiring talent now. Cutting the salary pay to send a message is pandering.
    However, GM does need to cut the executive ranks significantly. The span of control of some executives and managers is too small. I’m aware of small companies with span of control by first line managers that match the span of control of directors in GM. Too many managers just equate to more permissions required to start work of justifications that need to be generated to defend projects.
    Yorks ideas may have applied to Chrysler in the 80’s however, I think some of them are short sighted today.

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