Lack of Leadership from American Auto Makers

The American auto makers are rapidly becoming another casualty of the financial crisis. However, the financial crisis is not the sole reason for their downfall; we need only look to Toyota and other non-American auto makers to see that–while not thriving, these non-American car companies are at least surviving the downturn without any government handouts.

To put it simply, the American auto makers, particularly General Motors (GM), have failed because of an insular, self-absorbed culture that has lacked foresight and has failed to create flexible enough business plans. This recent article in Forbes catalogs the different leadership styles of GM executives over the years, and reveals how despite the best efforts of some leaders, GM has been unable to trim down and adapt to changing market conditions without stakeholder backlash.

One way to avoid such an insular culture is to practice surfacing sentiments (which I describe in detail in Leading for Success). Leaders who are truly informed about the past and present are best able to contribute to the future. The way they behave can help them get more information out of staff, and the way they manage politics can help them to seek information and act proactively rather than wait for information and act reactively.

Whether they’re bailed out or not, it’s going to take a lot of proactive action on the part of American automotive leaders to bring their companies back to health. Hopefully they’ll be up to the task–if not they’ll almost certainly weaken the global economy further.