Having suffered an $8.6 billion loss last year, what can General Motors do to turn things around? We solicited free advice for the struggling Detroit automaker from some street-smart entrepreneurs. Here are their ideas:
"GM needs to make cars that are more stylish and appealing. Particularly with respect to less expensive vehicles, GM just doesn't seem to connect with buyers the way Honda does. As clichÃ©d as it sounds, the new Civic is like the iPod--it has great styling that evokes an emotional response from buyers."
Lou Honick, co-founder and CEO, HostMySite.com, a Web-hosting company based in Newark, Delaware
Back the Product
"Offer a 100 percent satisfaction guarantee. If you buy a GM vehicle, and if for any reason you are not satisfied, return it for a full refund. I would also offer a five-year service guarantee and a $500 deductible at GM dealers or select repair facilities. Give the customer a sense of permanence."
Mark Shay, founder, Educational Directories, a marketing company in Chester, Pennsylvania, that produces online recruiting tools for colleges
Embrace Creative Destruction
"My gut impression is close it down. GM has large cash reserves and other assets, but has been losing money at a fast rate the past couple of years. GM's product is years behind the Japanese and Germans in terms of quality. The proof of that is that GM does not compete that well even with the advantage of Japanese and German manufacturers having to pay import duties and tariffs. So close it down, pay off creditors, give the remainder to shareholders, and let innovative, fast-moving, non-union companies start up."
S. Dee Davis, founder and CEO, DVDT in Atlanta, a reseller of display products, including plasma TVs, flat-panel displays, and digital projectors
Wave the Flag
"One way GM's executives can turn it around is to change the issue. Find an 'un-American' reason to blame for your troubles: something like competition from overseas or oil prices. Rally support for GM against a common enemy. GM is as American as apple pie and the flag."
Keith Schwartz, president, On Target Promotions, a manufacturer in Warrensville Heights, Ohio, that sells ties and socks in national supermarket chains
Simplify the Business
"I think they have to go bankrupt and then do the following:
- Get rid of half the dealers. There are more than 4,000 Chevrolet dealers in the U.S. compared with 1,200 Toyota dealers, and Toyota's dealers sell twice as many cars.
- Get rid of car lines as well--keep only Chevy and Cadillac and maybe Pontiac.
- Renegotiate with the unions. There is no way on God's earth that unions will agree to the kinds of cuts in benefits and pensions that GM needs to survive. The only way it can do that is through a bankruptcy. It will be a shame, but in the end GM will be lean, mean, ready to compete."
Malcolm Bricklin, CEO of Visionary Vehicles, an importing company in New York City that plans to bring Chinese autos to the U.S.
Employ the Great Man Theory
"Hire Lee Iacocca."
Stan Schultz, founder and CEO, Schultz Engineering in Poplar Bluff, Missouri, a consulting firm