Gregory Knox’s Letter to Troy Clarke, President of GM

10 thoughts on “Gregory Knox’s Letter to Troy Clarke, President of GM”

1. Absolutely bang on! Too bad politicians and “captains” of industry will ignore it, as will those who continue to seek instant gratification, buying things today with tomorrow’s dollars. The real tragedy is that those of us who have been careful with our dollars and our debt will also pay the price.

2. Yeah, but he failed to mention that the Japanese government has been subsidizing the Japanese auto industry for years, along with the state governments of the southern US such as our own state of Alabama. Does anybody know that the Japanese government 100% funded the development of the hybrid battery system for Toyota’s Prius? And he tries to prove his argument on quality by comparing the Accord and Civic to the K-car and the Pinto? I mean get real – these cars haven’t been built in over 25 years! How about FAIRLY comparing them to CURRENT American cars such as the Malibu and Fusion? Does anyone know that the Malibu rated as the highest mid-size car in initial quality in 2008, its first year of a new design? Or that the Malibu and the Fusion Hybrid have higher mpg than either the Accord or Camry? Or how about this fact – Toyota recalled more cars than they sold in 2007! I proudly own two new American cars that were bought within the last year and a half and have had ZERO problems with them and the quality and fit-finish of them is as good as anything from the imports. And if this guy is going to bring up human rights issues from countries of items that Wal-Mart sells, then why doesn’t he mention the human rights and labor rights infractions of some of Toyota’s third world auto part suppliers? Sounds like this guy has a personal axe to grind, and just like the mainstream media, wants to continue the “misinformation” campaign by stating union tactics that may have existed dozens of years ago but are simply not true in todays UAW factories. I just today had a lengthy discussion with one of our own project managers who oversees several contract employees who are on-site at GM’s Spring Hill, TN and Bowling Green, Ky plants and the kind of drivel that came out of Gregory Knox’s mouth about the UAW’s current workforce is completely false and misleading. Many of the hard-working AMERICAN men and women of the UAW are personally hurt and upset by the misinformation and outright lies spread about their workforce that are regurgitated UAW labor practices from decades ago that simply don’t exist anymore. If you really want to believe it, fine but also check out http://www.gmfactsandfiction.com. And one other thing, GM did NOT ask for a “bailout”. They asked for a bridge loan, something that the governments of South Korea, Japan AND Germany are considering for their own automotive manufacturers.

3. How about the fact that it is the JAPANESE built large SUVs and trucks that are the LEAST EFFICIENT in the market. GM trucks and SUVs have the HIGHEST efficiency in the market and this is a FACT! This guy (and every other liberal pundit) would have you believe that the Big Three are the only manufactureres that produce inefficienct and “planet killing” SUVs and trucks and that is simply A LIE! Toyota, Honda and Nissan’s trucks and SUVs are the ones that are the most inefficient in the marketplace! CHECK THE FACTS!

4. I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

   Sarah

   http://www.thetreadmillguide.com

5. Ok…first off, I think everyone in the US should take a moment to stand up and applaud. We finally got someone with the guts to stand up to these inept execs that are bringing down the big 3 and exposing the entire industry for what it is!

   And now my rant. Bear with me here.

   Second, a message to 2lambdas: I personally could care less about efficiency. Only leftists and tree huggers are concerned with the fuel efficient cars and how it all affects their ‘carbon footprint’ I am a proud owner of a Toyota and have been for over a decade! And my wife will be soon as well as her Chevrolet has been nothing but a gas guzzling beast that has been in the shop for almost as much time as in our driveway. They are both 4 cylinders and the better gas mileage…the Toyota!!!

   So, you who oppose Mr. Knox and his letter:
   Do you really think that someone who makes $50,000/year should be in a $450,000 home?
   Do you really believe that someone who turns a bolt deserves to make $70,000/year?
   Do you think that people don’t need to be held accountable for their actions?

   This is what is really wrong with today’s world! These people are spoon-fed a giant bowl of garbage on TV saying that the government needs to take over everything while holding absolutely no one accountable. It’s disgusting!

   And one of my favorites…Our dear Ms. Pelosi and the newly elected ‘Messiah’ are trying to find a way to implement a windfall tax to our stock returns and retiree’s 401K money. And what is that tax going to pay for??? Illegals that didn’t work for a cent of that money to get the lifestyle they illegally came into this country for. They are all trying to tax the crap out of us and take the money that WE worked hard for and give it to the least deserving. NOT FAIR!

   Put Mr. Messiah’s socialistic…um…I mean ‘change’ to work. Go to a restaurant, have a nice meal. Order a nice NY Strip and a bottle of wine. When the server brings the check, give them the exact amount for the bill, then explain to them that the $40 tip that you were going to give to them…they aren’t getting. Tell them that you saw a guy outside that looked as if he needed it more and he’s going to get it instead. Then ask them if that’s fair. They were the one’s who worked for it and they are the ones who deserve it.

   I, by no means, am a wealthy person, but I have learned from my mistakes by falling on my butt, brushing off and going on my way and not doing it again. I hold myself accountable just like everyone else should!

   I find it appalling that such a majority of the US population has drank the liberal Kool-Aid for all this time and could not see the Socialistic foreshadowing and now we are ALL going to pay thanks to a new regime of ‘change’

   Mr. Obama, I will keep my freedoms and Gas guzzling, carbon stamping Toyota that gets over 30mpg city. You can keep the change!!!

6. This morning I received a friend’s forwarded copy of Greg’s letter.

   Many of the items written to the head of GM validated my own experiences working “with” the auto industry.

   After reading the note, I wanted to check its authenticity out and googled Greg’s business name for a phone number. (We all get spam with wild claims, don’t we? This one just seemed honest and, if true, needed to be endorsed and forwarded.)

   I called Greg and asked if what I’d received was legitimate, and he verified it was real.

   This lead to a discussion of his and my own experiences in working with the “leadership” of America’s automakers. We each see pieces and parts of the problems as well as why a bailout will only reward bad business decisions and make matters worse. While other bloggers may find fault or disagree, please reserve judgment until you try to do business with people not motivated to solve problems. Employees that criticize a “newbie” for being “too productive” should not be protected by a Union Contract. That’s just one of many items that Greg accurately described and that hurts production and profitability.

   Poor quality is another very real problem that Greg accurately wrote about. (American automakers need to do more than “close the gap.” They need to be a leader and build superior quality. That’s part of the solution.)

   Sales for Toyota, Nissan, and other true leaders substantiate the real value of quality and quality leadership.

   Solutions to the problems in manufacturing and other business sectors exist, and Greg listed Deming, Six Sigma, and other verifiable methods to improve manufacturing and business processes. (In our visit, I added Frederick Taylor’s observations about “soldiering” as an explanation to the “newbies” being reprimanded for being more productive than the old hands. Folks, Taylor knew over a century ago about the whys and wherefores of poor worker productivity. Solutions are nothing new!!! Google “Frederick Taylor” to read more about what many of us know about the problems of GM et al.)

   Make no mistake about this; just giving a failing business more money simply won’t help.

   Until and unless GM and other businesses make fundamental changes they will keep losing money. This is an entirely different issue than a government that invests (“subsidizes”) innovations and research. Bailouts in banking made up for bad loans that never should have been made, and an auto bailout will “forgive” decisions to make too many vehicles and / or poor quality vehicles.

   Eventually, we won’t be able to find enough “borrowed” money to “save” them.

   Well, since visiting with Greg, I’ve found a few minutes here and there to find and send links to Greg’s letters to others.

   I hope you will do the same.

   I so admire him for speaking his point of view and encourage others to do the same.

   I am.

7. I wrote to Mr. Knox defending GM quality. I drove my first car, a 1976 Malibu Classic, for 14 years, barely put anything into it (being young and poor), and it ran like a top until the day I traded it in. I drove my next car, a Monte Carlo for 12 years before willing it to a young couple, who drove it for another 8 years. (They could afford to keep it running because parts were cheap.) My current car is a 1997 Cadillac with well over 100K miles, and my mechanics tell me that the Northstar engine is the “8th wonder of the world.” I have driven and ridden in many foreign cars, and I don’t know of one that comes close to riding, driving, or appearing nearly as luxurious as my Caddy. I’m also really glad I was not in a little “matchbox” car when the lady in the Lincoln Navigator came out of nowhere and creamed me. Although my Cougar was totaled, I came out with only an airbag burn on my arm. Finally, I told him that Japanese companies do not afford their employees the same rights that Americans know they are entitled to. My husband worked for a Japanese company for two years, and believe me: YOU would not want to work for a Japanese company!!!

   Oh, and one more thing: Contrary to popular belief, Oldsmobile had held the safety record for YEARS while Volvo and Toyota capitalized on their false advertising. (Sadly, if I’m not mistaken, Olds is now out of business.)

   Surprisingly, Mr. Knox replied to me. He recognizes the bailout as a Socialist type of practice, and we all should be very wary of anything even remotely resembling socialism. It is NOT what we want for this country — not even socialized medicine. My husband’s grandmother lived in Holland and died blind because the government saves all the lenses for young people. They decide who gets what, and I guess young people are more important than old people…

   Here’s Mr. Knox’s response:

   I am receiving thousands of emails and wish I had the time to reply to them all, but I will take a few seconds on yours, because you are obviously intelligent and have class.

   I wrote the letter to Troy Clark – It was a “spleen vent”…they deserved every word I leveled @ them, and unless someone has spent 20 years in my shoes they can’t know exactly how bad it really is with these guys.

   That being said, I never knew the letter would go to anyone but Troy Clark and my Mom – this whole thing is an internet fluke…I’m not sorry at all, because it has thousands of people talking about getting back to good old fashioned true American values, so I am glad that it is playing that role, but MAN if I knew it was going to become some global statement, I would have spent A LOT more time railing the corrupt politicians, who are facilitating the mass exodus of our manufacturing base to the horrible detriment of our nation security, the criminal bureaucrats who are plundering dying companies to their personal gain (who cares what happens to the workers, and our nation…”I got my millions”) and lastly, yes, these horrible unions that have helped to decimate US manufacturing and drive so many industries off our shores over the last 40 years.

   I KNOW there is far more culpability @ the top end and I wish I could have addressed that – if you listen to the many radio interviews I have done since, that is exactly what I do.

   I say there was never a need for unions, that the US GOVERNMENT should have done its job. But they didn’t.

   So Thank God someone (yes – the unions) stepped in to protect the working man (my grandparents came off the boat from Ireland in the potato famine and worked in foundries and coal mines – I know of what you speak).

   Anyone “in the know” knows that these unions have become worse than the ills they set out to combat.

   I have hundreds and hundreds of emails from honest union folks telling me I’m right, the unions are primarily concerned with lining their own coffers, are corrupt beyond belief and spend most of their time protecting the slackers making sure they cannot be fired, no matter how heinous the atrocity, rather than supporting the many good, hard working honest people in the factories.

   Also, I did not rail on the quality of the vehicles over the last few years – I know they have gotten better and would never dispute that (a point I keep making in my radio interviews) and I have counseled many in my emails to do like me and buy American ( I drive an ’05 Lincoln Navigator as well as a Jeep Wrangler, Chevy S-10and a Ford Ranger…the wife switched to Honda Odyssey years ago after one too many Detroit lemons though, and I didn’t fight her on it because I want my sweetheart and our babies to be safe)

   My bottom line is this – bankruptcy – Ch. 11, strategic reorganization, IS the bailout – not throwing billons of our dollars @ folks flying to Washington in Lear jets backed by unions whose stance is “we will not make concessions”…doesn’t this alone prove how much they “don’t get it” and how much “REAL CHANGE” is the only long term viable solution to these ills?

   America is out of control and we NEED a good recession to become a real nation with a real work ethic and REAL values again…

   Does this letter help my business?…I think you can figure out, quite the opposite

   Will the coming recession hurt me personally? I have already had to cut my company in half over the past 18 months…I will be hurt, safe to say, as bad as anyone.

   Then why my stance?

   Do the homework – recessions come about every 10 years, and we always end up healthier afterwards – kinda like the way the human immune system gets stronger after it has battled and beaten a flu…why is it that THIS time (when we need it worse than ever) that it must be stopped?

   By a trillion in money we don’t have?….

   That will be yet another unfair tab we pass on to our children…

   For crimes they did not commit?…

   Believe me, this path ends in socialism, and you DON’T want that for your children.

   I feel badly when people don’t fully understand where I am coming from, and really wish so badly I could do more to help – I would rather deal with the pain personally than just to pass the problems on to the next generation.

   I wish you (and all of us) luck – I fear we’re really gonna need it…

   God bless
   Gregory J Knox

   I think he’s got it dead on, and I wish he’d run for office!

8. The United States will remain the most free country on the planet even with the govenments interaction with the banks and the auto-makers. There is no way the wealthies people in America are going to allow these organizations to just go away. You have to be a real idiot to think that Government and the worlds wealthiess individuals are not working together. If Greg Knox keeps his business and prospers it will be because real money has allowed him to. The only true republicans are wealthy not rich.

9. nice post

10. The Big 2 1/2 closed the quality gap several model iterations ago. Just look at the JD Powers numbers and titrate the subjectivity out of Consumer Reports tests and you will see that the Fusion and Malibu ARE class leading. The only place Accord and Camry beat them are in resale value. However, that will change as GM and Ford drastically cut production and the large rental fleets have been going to Toyota more. The problem with most quality numbers or reports of quality issues are a matter of perception and not really defect. Again – you need to root out the subjectivity and you will see that the actual defects for the Fusion and Malibu are superior to the Accord and Camry. Further – they both provide more options at a lower price AND are more fuel efficient (read the specs).

    How did this gap get closed? Consumers wanted higher quality cars and more efficient (not hybrid efficient – they just want a regular car to get 30 MPG on the highway instead of 23). The automakers responded. If you think consumers REALLY want hybrids in this country so bad and small, “fuel efficient” cars so badly – why are Prius’ stacked up in dealer showrooms right now? They only showed record sales in this country when crude spiked to $145.

    That leads to the cusp of his letter – consumers drive markets – NOT governments. If you only have a choice between red and blue one piece swimsuits – guess what will be the top selling two choices…? Think about the old Wendy’s commercials concerning choice with the parody of a Russian swimsuit competition. Large corporations react much slower to consumer changes in behavior than do small “hungry” companies seizing on opportunity – THAT is competition and ultimately fuels our country (or use to when we were still a Capitalistic society). Credit is NOT a bad thing – it is the device that drives growth an innovation. Unchecked credit or misuse of credit is NOT a good thing. Examples – a lender lending $400K to a couple bringing in $50K a year is bad lending. Using credit cards to buy a boat that you can’t afford the payments on is bad use of available credit. Don’t confuse the two. Credit drives our economy and provides a standard of living that is much higher than most. Not understanding credit or respecting it is the issue. Why do you never hear politicians complaining about the complete lack of financial education in our schools?

    The Big 2 1/2. Wow. That is in a nutshell what is wrong with this country in terms of entitlement. I also have spent many years calling on these plants. I was one of those guys that waited 90 minutes for an electrician to come over and tell me it was SAFE TO WALK UNDER AN UNPLUGGED EXTENSION CORD GOING TO A FAN!!! I am a chemical engineer by degree with a financial background. Thank you skilled labor for saving me from what was in plain sight! I also watched management’s frustration at trying to find a “job” for a guy on the line who came in too stoned to PUSH THE BUTTONS! It was the third time in a month. He had already been through the internal drug program at GM TWICE. They had to wait to fire him (several more offenses and more counseling per UAW rules) and they could not send him home because he would have had to go on “medical leave.” Guess who got paid to sit in the lunchroom all day…? I saw this stuff day in and day out for 15 years in these plants. I finally quit calling on them as did most of my peers. It wasn’t until the last couple of years before we started again and then it was under our terms – not theirs or the UAW. You can trace back that acceptance to the better cars being turned out in the last several years.

    Management – say what you want. They served at the behest of the board and the board is basically a political seat. Politicians see the UAW as easy votes – period. No one can win in Michigan without the UAW vote so they pander to the unions and make their ridiculous claims. They get voted in and then nothing changes. Look at this last Chrysler package… the Union is goign to own 55% of the company? What about the white collar engineers, designers, etc. that are the real braintrust behind the products and innovation? What were they given/offered? LOL – come on people. It’s not that difficult. Who is going to stick around of any value in that organization? Why do you think retention bonuses were paid to AIG personnel? You know -the ones where the press jumped all over and called performance bonuses? They were offered bonuses to stay and unravel all of the large, complicated derivative trades and such that they put together. Without a systematic unwinding of these contracts – the whole company collapses. These employees know they have ZERO future at AIG. Why would they stay unless you pay them a LARGE bonus to complete the job before leaving? Same thing is going to happen to Chrysler and GM. As soon as the economy rights itself (if it does – the current administration is doing its best to prevent that) – those engineers and designers of value will jump ship to those who demand and respect the best.

    What happens when the government runs things? Look at the US Post Office. How long would that organization survive without the federal and state subsidies (a lot of unknown and unspoken subsidies occur like the official use by all government entities where the customer (ie – tax payer) can not demand better service by taking their business elsewhere). What about the IRS? What is the solution being touted in Washington to solve the tax issue? That’s right. Increase the size of the biggest employer in the world.

    The point of the letter was not to harangue on the Big Three. It was about the politics that lead to their demise. That same political nonsense has caused numerous corporations to fail. Those do not have the UAW and their 10-12 MM cascading votes to be concerned with though. GM and Chrysler have ALREADY FAILED. The bailouts were nothing more than a band-aid being administered to a patient who was bleeding out. Any economist or business person will tell you the same thing.

    Why did the government not let them fail? why are they pumping billions of dollars into them? 10-12 MM votes. There is close to $4TT dollars sitting in hedge funds, capital firms, venture capital groups, etc. They have no where to put this money. These guys would LOVE to get their hands on a GM of Ford through bankruptcy. Bankruptcy is the ONLY way to break the UAW, retire the unproductive debt that has been like a 20 year ball and chain, and absolve all of the overcapacity in the organizations that is there because of UAW contracts and production quotas.

    This won’t happen for two reasons. First – no one will invest this kind of money in this market with the administration’s current view of profits and capitalism. The prior poster mentioned Pelosi and the new taxes. Why invest now in a treacherous market when your time frame for an acceptable ROR puts you right smack dab in the middle of a MONSTER tax hike on capital gains and dividends. That is just bad business sense. Why have the markets rebounded? Mostly short covering. The White House is taking credit for the largest two month run of the DJIA in history but blame the prior administration for the 50% haircut…Brilliant!

    These issues go hand in hand. The UAW, the sense of entitlement that is being endorsed by this socialistic government, and government interference with free markets KILL capitalism, investment, productivity, and our entire country’s standard of living. And – like the letter eloquently claims – WE ALLOWED IT and continue to do so.

    The “messiah” term is not new and has been around since mid last year during the campaign. What happens when this “gifted, eloquent speaker” loses his teleprompter or gets tough questions off the cuff? He doesn’t look any more polished or “Presidential” as former President Bush who was consistently blasted as an uneducated twit. He is a gifted speaker and motivator but his past provides ZERO history of leading and/or success in producing results. His current attack on capitalism and constant attempts to transfer wealth will ensure that investment dollars stay well hidden and unused. Of course – now the administration is even attacking cash AND removing the most basic fundamental right of the law protecting citizens under our Constitution – they are removing the presumption of innocence. That’s right – you now have to “prove” your money in an off-shore bank is there legally.

    Don’t rag on American vehicles without the facts. There are a lot of class leaders right now and sales under a normal economy/market would reflect that (I know two small business owners going to the Fusion over the Camry for their sales reps because of the numbers – one was a die hard “American cars are crap” kind of guy and he did his due diligence and was completely surprised at his own perception issues).

    Save the ire for the politicians who pander for votes and power instead of the long term best interests of the entirety of the US – not just those who consistently refuse to help themselves and thus need to be saved. Let humanitarian efforts through philanthropic efforts help those who get little to no chances in life. For those who consistently make poor choices and wait to be saved starve and find out what it means to work a legitimate eight hour day in a real job to keep the family surviving.

    As far as management – we as stockholders are also voters. If we continue to let board of directors shy away from oversight of the fiduciary responsibilities of upper management – they will continue to pat them on their backs and collect their large stipends and short term options. If we do not actively vote our shares – the corporation will ultimately fail as self interest destroys the company for short term gains. Kind of like the government…

    Long rambling reply while on a CC and going through email. No time to wordsmythe or re-read. If nothing else – think about it. Mr. Knox made very valid points about government involvement in business and his experience with the Big Three are very real and shared with most of my colleagues who use to or still work directly with them in the supply chain.

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