The $30,000 Can of Coke

Someone in one of my Linkedin groups recently posed a question about whether or not the rest of us thought the slow erosion of manufacturing in America was the product of, at least in part, bad management.   The divide was pretty dramatic and the debate between the members of the group was spirited, to say the least.

Personally, I found myself on the side that wanted to blame – as I said, at least in part – America’s decline in manufacturing dominance on some ridiculously short-sighted management decisions, and a frightening amount of lemming-like executive thinking.

To wit, I offer the latest in a long line of jaw-dropping statements by an otherwise apparently intelligent corporate executive:  new General Motors CEO, Daniel Akerson.

Akerson, who recently came to GM from the telecommunications industry, was being interviewed a few weeks back by the Wall Street Journal.  During the interview Akerson was drinking a Diet Coke, and he offered the following analogy between his product and a can of carbonated beverage: “It’s a consumer product,” he said. “GM has to start acting like a consumer-driven, not engineering-driven, company.  We sell a consumer product – our can just costs $30,000.”


No wonder GM is still not out of the woods.   Here’s their 4th CEO in the last two years equating a $30,000 investment in an uncertain economy – an investment so significant that many people my age will pay more for their next new car than they paid for their first home –  with an impulse buy they will make on a whim, often with spare change.

What’s more, here’s the CEO of one of the most important manufacturing companies in the country telling us his company needs to be less about innovation and design, than marketing, sales incentives and pricing strategies.

Again I say, Wow.

Akerson apparently has never heard the adage that nothing brings about the demise of a bad product quicker than great marketing.

I am not saying that GM offers an inferior product.  What I am saying is that if the company does not continually strive to stay on the bleeding edge of engineering, design and technology, GM will find itself exactly where it did in the early 1980’s.

I recently wrote about how, in the 80’s, the Chrysler K Car almost brought its parent company to its knees, because its combination of good marketing and putrid quality led Americans who had never even thought of test-driving a Japanese car, to suddenly buy one.

And that same potential for disaster — or, in the case of GM, further disaster — exists today.  Only the fault line isn’t quality.  It’s innovation.

And given how quickly technology is advancing these days, any manufacturer that says it needs to focus more on marketing than innovative engineering is just asking for whatever hell the marketplace has in store for it.

And the more the guys calling the shots keep walking around with their heads in the clouds – and keep operating as though they’re in the business of selling $30,000 cans of soda pop – the more the manufacturing landscape will continue to tilt shoreward.

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