Global Motors

By Brian Micklethwait | 16 October 2005

One of the great ironies of what has come to be called globalization is that the very people who are often accused of supervising the process for their exclusive benefit - Americans - are often the ones who actually have the greatest difficulties in adapting to it.

The reason is that the USA was for many years so much richer than the rest of us, and its own domestic market so vast, that post World War Two American industry hardly needed to bother with the rest of the world.

But now, that classic early twentieth century American giant, General Motors, is and has for some time been in deep financial trouble, and is only now seriously globalizing.

Here is some of how GM Vice Chairman Bob Lutz describes the process, on his personal GM blog:

First, we now have people in place with global responsibility for design, engineering, manufacturing and product planning, and, starting January 1, we will have one single global design and engineering budget. That has never happened before at GM and, believe me, that was a big hindrance to previous efforts to produce component sets, architectures or products that are global in scale. No longer will one region be forced to turn down a program because it doesn't have the budget to pay for it. One budget allows much greater flexibility in the application of product programs in all our various regions.

And so on. Engineers who would previously have been sacked by one nationally isolated division will in future immediately be found work elsewhere in the GM global empire, in another "region", and connected to it with the magic of modern communications technology rather than by being forced to move country. Different regions will specialise in different types of vehicles, America doing lorries and vans, while Europe does medium-sized cars. And so on.

This is all very fascinating, and I genuinely recommend that you read it all, and Bob Lutz's blog in general. But it has taken GM rather a long time to think like this, hasn't it? In Japan this has been routine stuff for decades.