When I was at Saab I was amazed at some of the services we were outsourcing and how much they cost. My perception was that the costs associated with this were negotiated to some degree, but mostly just accepted. It seemed to have become an ingrained behaviour, most likely under GM’s ownership of the previous 20 years. Saab’s ownership changed, but the culture of the company didn’t change nearly enough.
Or maybe this is just the way it is in the world of big, global businesses.
An article on the departure of GM’s Global Marketing Chief gives us some insight into some of these corporate spending habits:
Ewanick famously saved $48,000 by using just $2,000 of the $50,000 allowance he received to redecorate his Detroit Renaissance Center office by going to Ikea rather than ordering pricier furniture.
OK, so he’s a top tier executive, but $50K just to redecorate an office? Kudos to him for not using it all.
If you’re wondering why some car companies struggle to be profitable, then rest un-assured that there’s quite a bit of waste going on in most of them.
At Saab, we had a cost-cutting program called Cheetah in our final months. One could rightly say that it should have happened in the first months of Spyker’s ownership rather than as an attempted salvage operation at the end. There were indeed some wasteful spending decisions well before then.
I remember reading some complaints about the PhoeniX concept, which I never thought was a valid complaint for people to have. PhoeniX was absolutely appropriate for a company looking to re-stamp itself on the automotive scene after all the negative news surrounding the GM sale. It got Saab plenty of magazine articles and covers, too.
But I did wonder about the big ‘Independence’ party that happened in the factory just before production stopped in 2011. It seemed a little bit presumptuous and the way history has turned out, it seems suppliers probably didn’t appreciate it, either.
They might take solace in the fact, though, that as far as I know there weren’t any $50,000 office decorations.