Thursday, October 22, 2009

Corporations rot from the top - the GM story

This does not surprise me ...
Barack Obama to order salary cuts at bailed-out firms | guardian.co.uk

... Feinberg's move against top corporate pay came as Obama's former "car tsar" attacked the "stunningly poor management" he encountered at Detroit's carmakers as he worked to avert a collapse of the biggest US auto firms this year.

Steve Rattner, a former private equity executive, was the treasury secretary Timothy Geithner's top adviser on the car industry between February and July – when the US government acted to rescue both General Motors and Chrysler.

In an article for Fortune magazine, Rattner offered a savage verdict on the leadership culture at the industrial giants, singling out GM's former boss Rick Wagoner for his "friendly arrogance", and top executives' reluctance to mix with workers.

"Everyone knew Detroit's reputation for insular, slow-moving cultures," he said. "Even by that low standard, I was shocked by the stunningly poor management we found, particularly at GM, where we encountered, among other things, perhaps the weakest finance operation any of us had ever seen in a major company."

Rattner attacked GM's top executives for sequestering themselves on the top floor of the Renaissance Centre skyscraper in Detroit, with exclusive lifts, to avoid mixing with lower-ranking "drones"...
This is to be expected since ...
  1. If the management weren't fairly average GM wouldn't be in the mess it's in.
  2. No exceptional person would tolerate this kind of management style, so they wouldn't take a job at GM.
  3. Power is an amazing intoxicant. Only those with exceptional abilities can keep any kind of perspective while they enjoy the high. Given #1 and #2 though, we know GM executives can't have those abilities.
Corporations rot at the top. Off with their heads.
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