GM’s Supplier-Squeezing Days Gave Birth to Flawed Models
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The cars at the center of General Motors Co.’s February recall were still on the drawing board when a top engineer gathered more than a dozen managers and delivered a fateful message: Build them for less.
At the time, around 2000, GM’s profit margins were shrinking as worker- and retiree-benefit costs rose and its U.S. market share leadership was eroding. GM’s grand plan to make money on small cars, by developing them jointly with Fiat SpA, was crashing.