Contributions of GM and UAW to Saturn failure
Saturn was developed by General Motors and United Auto Workers partnership. Its main role was to distribute small cars that would compete with other US imports. The company was expected to be a new division for GM. There was total and acknowledgeable success of the company until it decided to operate by its own. The company was to be built under a fully integrated labor management partnership which was embedded on marketing, sales, operations, dealership management, product development and customer relations that were meant to produce better cars. The survival of the company was notable in the market until GM and UAW decided otherwise. The decision of the two companies to act as rivals to Saturn brought about its failure in the market.
The attributions to the company's demise are due to the insistence of GM to manage centrally all its divisions with a clenched fist and the demand that from the GM and UAW leaders that the company gets in line with their traditional ways of doing its things. When the Saturn came, there was a negative attitude from other GM divisions since most of the funds from the company were directed towards Saturn upkeep. It posed a negative attitude towards the company and this led to its failure. Saturn was dependent on supply from the two companies, who were also its rivals in the market. Therefore, they denied it the supply of the vehicles making it lose its market share. It was, therefore, a major challenge to the company in since it never had the capacity to produce its own cars.
Saturn was also forced to make an MOU with UAW in order to eliminate all the restrictions on the number of tasks that the UAW members could perform. It made it quite dependent on the decisions and operations of UAW. Therefore, a major challenge was posed to the decision making in the company. It was restrained and constricted to a certain way of decision making. Another blow was realized when the companies workers were entitled to earn 80% of what UAW offered as wages. The workers were also entitled to share the company's profits. It reduced the amount of profit left for the company to plough in order to progress in its operations.
Saturn managers and the executives were assigned as UAW counterparts and would, therefore, be included to share in decision making. It was an unexpected blow to the company still. When GM suffered bankruptcy in the 1990s, there was a shortage in supply of vehicles, finances and also decision making in Saturn since it was still reliant on GM. It, therefore, led to the market declination of its products that it was supplying to its customers.
The GM management wanted to scrap the different cars and at the same time UAW wanted to end the MOU between it and Saturn. These two made it a disadvantage to the survival of Saturn. The Saturn members did not view themselves as GM subordinates or UAW card carriers. To kill this culture, therefore, the two decided to divide the resources of GM so that Saturn became a GM associate. It is clear that the two companies, GM and UAW, contributed to the failure of Saturn in a number of ways. It was, therefore, advisable that the company operated individually without relying on the other two.
The decisions made by this two companies towards scrapping off Saturn, was triggered by the fact that the company decided to operate separately away from its mothers. The leaders had the assumptions that the company would make profits to help boost the other divisions in their day to day operations. They ended up finding that the assumptions they had made were not all that reliable since they were all subject to a lot of external forces. One of the effects was when Saturn decided to act as a stand-alone company devoid of GM and UAW influences. Therefore, the two companies assumed that the company wanted to start producing their own cars and subject them to the market for sale. Therefore, they decided to withdraw their helping hand to see whether the new rival would succeed in the market.
The leaders of the two companies would not have disengaged Saturn since the company was still profitable to operate. Therefore, it meant that the company would have been let to operate with full support in order to make more profits. It was, therefore, advisable to keep their membership and act as shareholders of the company. The leaders would not have posed as a direct rival to the company but would have ensured that the operations of the business was still ongoing and then withdraw periodically to avoid disruptions of the business. At the same time, they would have ensured that they have the utmost control of the operations of the company by trying to form a merger with the company in question. Any company that is up for success must ensure that it gets to understand the mindset of the rivals.
Crumm, T. A. (2010). What is good for General Motors? : solving America's industrial conundrum. New York : Algora Pub.
Rubinstein, S. A., & Kochan, T. A. (2001). Learning from Saturn : possibilities for corporate governance and employee relations. New York: ILR Press.