General Motors isn't happy that it's five-percent operating margin is less than the predicted seven-percent at Ford or the 10 percent at Hyundai. To boost its number, Bloomberg reports that GM has hired consulting firm Hackett Group to identify areas in which it can save on white-collar costs, either through job cuts or efficiencies. Unlike in 2009, however, buyouts and tranches of layoffs aren't on the table.

An outside analyst considers Hyundai's returns out of reach, since the Korean firm benefits from exchange rates and more efficient platform sharing. The analyst also considers that GM will only find "a rounding error" in its pursuit of leaner white collar operations, but that might be enough to start. When considering closer GM competitors, through the first nine months of this year, Volkswagen could boast an operating margin of 7.7 percent, Ford's is 6.7 and Toyota is aiming to reach five percent (down from almost nine percent before its recall crisis and the recently steroidal yen). In that case, even a rounding error will make a statement.

Even though we're dealing with a "new" GM, talk of reassigned engineers can easily remind one of the dark days when fat-trimming exercises turned into amputations and handicapped product on the showroom floor. Yet the company is on the up with the continued momentum of anticipated products, and this is what every world class company is required to do. Still, we'll be watching closely.


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  • 75 Comments
      nmuwildcat65
      • 3 Years Ago
      As a former GM white collar employee, I left last year for a better opportunity with Ford. GM is very top heavy in its management structure especially after the great purge several years ago. It left many areas with one white collar worker with one supervisor with one supervisor, two levels of management watching one engineer work. But a point I've always made, an empty desk never bought a car...
        Xedicon
        • 3 Years Ago
        @nmuwildcat65
        GM has long been known to be top heavy company, and they've had a hard time getting away from that. Hopefully this will be done well and in the long run help GM - I know it sucks that people will likely be losing their jobs. Glad to hear you found a better home at Ford, I hope things are going well for you!
          Jerry
          • 3 Years Ago
          @Xedicon
          I just left GM two weeks ago for similar reasons. I reported to 4 different managers. There were only 3 engineers in my group! Totally bassackwards structure. They need to purge the chief and executive levels. They create levels and levels of metrics to for themselves to track to make it seem like they are actually doing something. Cannot get a lot of engineering done when you have multiple managers looking for regular reports on worthless metrics. They also have problems with proliferation. Lots of vehicle variants with
          Jerry
          • 3 Years Ago
          @Xedicon
          Did not finish that last one for some reason... Meant to finish with "lots of vehicle variants with less that 1000/year volumes. Some powertrain combinations have
        DrEvil
        • 3 Years Ago
        @nmuwildcat65
        Congrats on your new gig. I've been wondering when and how they were going to address that white collar - middle management situation. Its about time.
      6speed
      • 3 Years Ago
      Hackett Group - wow, couldn't find a company with a more appropriate name when you're looking to cut jobs.
      LifeLongCarGuy
      • 3 Years Ago
      It's good to see that the "dragon is being cut off at the head" and not the tail, as usual. I mean, if you are "in charge" and things go wrong, why lay off workers? Additionally, how many "regular" employee salaries does it take to make up one executive salary (with bonuses)? I don't know, but if an executive's yearly compensation is, say $2 million that is equivalent to 20 $100K employees, even more if the employee's total compensation isn't in the 6 figure range and even more if the total yearly compensation of the exec is more than $2M / yr. Just sayin...
      IBx27
      • 3 Years Ago
      Hackett? More like Hatchet...
      Polly Prissy Pants
      • 3 Years Ago
      “Looks like you've been missing a lot of work lately."
        Xedicon
        • 3 Years Ago
        @Polly Prissy Pants
        "I wouldn't say I've been missing it Bob."
      Arn
      • 3 Years Ago
      Ugghh. The economy still hasn't hit rock bottom yet? How much worse will it get before it gets ANY better? My grandmother used to say perilous times are coming (in reference to the prosperity we knew 10 years ago). "What goes up must come down, " she would say. I thought it was just a simple statement that has something to do with physics and dismissed her as being someone out of the loop. I guess I was wrong.
      Hambone
      • 3 Years Ago
      They're bringing in the Bobs!
      Gorgenapper
      • 3 Years Ago
      " You see, what we're actually trying to do here is, we're trying to get a feel for how people spend their day at work... so, if you would, would you walk us through a typical day, for you?"
      Autoblogist
      • 3 Years Ago
      Luckily my parents named me Michael Bolton.
      th0mb0ne
      • 3 Years Ago
      Bob and Bob?
      • 3 Years Ago
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        • 3 Years Ago
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          • 3 Years Ago
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          • 3 Years Ago
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          rover'd
          • 3 Years Ago
          Hmmm... So Alabama has Hyundai, Kia right across the border, Mercedes, and all the military and aircraft engineering... Not to mention great Engineering programs at Auburn, Alabama, and then Georgia Tech is not too far away.... I think Alabama would be a perfect place for GM to move to.
          • 3 Years Ago
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          DB
          • 3 Years Ago
          GM is moving its engineering workforce, not to Texas, but to Shanghi. At the same time GM is letting its Michigan engineers go, it is hiring their replacements in China. http://reviews.cnet.com/8301-13746_7-57345387-48/gm-to-complete-china-advanced-technical-center-in-2012/#ixzz1h8WZ5iz3
          DB
          • 3 Years Ago
          Alfonso: If you lay off a worker in the US and hire a Chinese worker who performs the same roll, that is moving. When the Japanese began adding US engineers, they didn't lay off any Japanese engineers. I friend of mine used to work at GM Research. She helped train researchers at GM's Chinese and Indian labs, then they layed her off along with most of her lab. All of the research in her area that was done in Warren is now done soley in India and China. Ask her if she thinks her job was outsourced.
          • 3 Years Ago
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      DB
      • 3 Years Ago
      This reminds me of the Henry Ford quote: "A man who must be told his own business by someone outside of it will render his best service by quickly getting out of business."
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