Blog: 'Managing change in the face of adversity'
Dave Leggett | 6 July 2009
'Managing change in the face of adversity' sounds like a good theme for a conference that examines the state of the auto industry in 2009. There would certainly be no shortage of topic items for the programme.
And there are plenty of interesting case studies to look at.
General Motors has just cleared an important hurdle in its efforts to emerge from court administration as a leaner and fitter company later this month. It won't be entirely without controversy, but the potentially very damaging consequences of a full-scale GM liquidation are at least avoided. The fallout from that would have hit the whole US auto industry very hard.
There's now just the small matter ahead of making the new company fly at a time when conditions are far from favourable. We had confirmation last week with June's figures that the US light vehicle market is not getting any worse, but with a SAAR of around 10m units, it's still a very tough place. For all the talk of 'green shoots', bullish investors and economic recovery around the corner, it will be a while yet before the real economy comes back in a meaningful way.
On this side of the Atlantic, we have just had another reminder of an example of 'change management' that was, well, little short of disastrous. I don't want to drag up the long and sorry history of British Leyland/Austin Rover/MG Rover yet again, but the subject has reared its head this week with the news that an official government inquiry into the events surrounding the MG Rover demise in 2005 has been completed. But we aren't being told what's in it because the Serious Fraud Office (SFO) is now going to get involved.
I don't know whether the directors of MG Rover acted with what could be termed blatant impropriety, but they did – according to reports – do quite well for themselves with things like very big pensions.
Looking back now, their involvement in the final incarnation of Rover looks more like negligence than anything else. You had a supposedly volume car company making just 200,000 units a year, with almost zero investment in new product while also spectacularly failing to find a suitable long-term partner. It's the last area where they really screwed up (Tata, already helping MG Rover with a rebadged Indica, was unsurprisingly miffed when SAIC emerged as a much trumpeted 'partner' – but that SAIC deal subsequently fell apart).
And the British government's role? Not exactly covered in glory, which is why it's not busting a gut to see that inquiry published. Indeed, now the SFO is involved, it may not see the light of day until after the next general election in 2010.
Is it surprising that the final echoes of the decades long industrial car crash that was Rover should be played out in such an unsatisfactory way? Not really. Let's hope that in ten years' time we don't have a similar farce going on in America.
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