OverViews speech example was prepared for James McDonald, General Motors President. Presented at Rotary Club luncheon, Dayton Ohio. 

Pardon Our Dust

Whenever I hear the term "Heartland of America," I think of Dayton. 

No, I know Dayton is not at the heart of America geographically...nor demographically...but it definitely is spiritually. 

I can think of no place that is more representative of what this country is all about. Dayton captures the American spirit -- that mixture of creativity, common sense, and uncommon sense of community --- that makes this country what it is. 

A lot of our critics have said that America was great simply because of the accident of geography.  While it's certainly true that this nation has been uniquely blessed with natural abundance to the point of extravagance, what has made this country truly great was not our resources, but our resourcefulness. 

American is clearly the innovative leader of the world. From the microphone to the microchip, most of the truly significant inventions of this century were made in America. 

Dayton has contributed more than its share. 

Electric starters, artificial hearts, cash registers, jet engines, liquid crystals, space foods, and, of course, the first airplane. 

It's hard to think of America without Dayton inventions -- little ones like the flip-top can, the ice cream cone, and those tiny time pills. 

General Motors' Dayton divisions also lead in innovations -- like the new computer-command shock absorbers at Delco... the roll form bearing process at Delco-Moraine... and Inland's hydraulic motor mounts. 

There was a time, not long ago, when such creativity assured world leadership for this town, and this country. 

We built better mousetraps, and the world beat a path to our door. 

That's changed. Japan, Korea, Taiwan, and others have specialized in taking up our inventions, and taking them to market faster than most American companies could. 

Entire American industries -- steel, machine tools, textiles, motorcycles, shoes, electronics, and numerous automotive components -- have already been trampled in the onrush of fast- second competitors. 

The fast-second competitors placed all of their emphasis on the manufacturing side... continuously reducing costs while improving quality. They've developed a 25 percent cost advantage in most industries. 

Since most businesses only have a profit margin of from 5 to 15 percent, that 25 percent cost advantage is overwhelming. 

In the early 1980s -- at the depth of the deepest recession since the Great Depression -- we at General Motors had to face up to the fact that they were passing us up. 

We had to answer the most asked... certainly the most important question I've ever heard -- Can America compete? 

It was clear that how companies like mine answered that question would determine the economic future of this nation and the standard of living of every American. 

Can America compete? 

Too many people, especially in the Media, were saying "no." They were writing our obituaries, taking our measurements, and ordering flowers. 

Too many in business also said "no." They were either throwing in the towel, or asking government to throw out the competitors. 

Yet at General Motors, we looked at the American spirit and said "yes."  Americans can compete with anyone, from anywhere in the world. 

It would take two things. First, technology. Most of our plants were 20 to 60 years old. Many of the machines predated World War II. We would not only need to catch up, but to leap frog beyond their technologies to make up for our competitors' labor cost 
advantages. 

Second, and equally important, we need teamwork. The one overwhelming advantage the Japanese and Koreans have had over us was their unity of action. Our long-standing adversarial traditions made it impossible for us to fully utilize our 
talents...to get our people act together. 

At General Motors, we decided to say "yes" to America. To literally bet our future on the American worker. 

In the past six years, General Motors has invested an unprecedented $41.5 billion in the U.S. alone. That's 76 percent of our worldwide capital investment. 

Here in Ohio, that commitment is significant. Today more than 75,000 Ohioans work for General Motors in 43 production facilities across the state. And GM buys goods and services from more than 18,0000 Ohio suppliers. 

In Ohio, we've invested more than $3.4 billion in new technologies. That's bought us leading edge equipment like the transfer presses at Mansfield and Parma. And it has bought Ohio a piece of the future. 

The result of these technology investments is that General Motors is now a new company... a high-tech company of the cutting-edge of computer-based manufacturing. 

Impressive, yet as I said, there are two essentials to becoming competitive -- technology and teamwork. 

Tools are only tools -- only as good, and no better, than the people who hold them. 

So we have set ourselves to the task of bringing our people -- all of our people -- on board. 

The adversarial relationship is behind us. No matter where you go in General Motors today, no matter who you talk to, you'll find a new attitude toward work, toward quality and cost-effectiveness. 

Management, employees, suppliers, and dealers have come to realize that the only real job security comes from becoming world class and world competitive. 

And with this new attitude have come dramatic improvements in quality -- quality we are now backing with 6-year/// 60,000 mile warranties... the best in the business. 

To have come so far, so fast, is nothing short of miraculous. 

Three Harvard professors, in their book Changing Alliances, say, and I quote: "General Motors is making a big effort... and substantial progress... in defining how it is to compete as the world's largest automaker. Not since Sloan's efforts in the 1920s has it reorganized itself on a comparable scale." 

Now, I can just hear some of you thinking: "Wait a minute, Jim. What you're telling me doesn't square with what I've been reading in the newspapers. I've read about plant closings, layoffs, and cutbacks in major programs." 

Yes. Superficially, it does read and sound like a pile of problems. But I would suggest that what you are hearing are the disruptions that come from rebuilding. 

Rebuilding is never a tidy process. 

Take a look at your Dayton Convention Center, for example. That building is being renovated. Sections are cordoned off, and debris is scattered all over the place. And somewhere around there you'll see a sign that reads: "Pardon Our dust." 
 

It's impossible to build without tearing down. 

Which creates the contradiction that showed up in a small Ohio city a few decades ago. 

The city council issued a decree to build a new jail. They edict said, and I quote: 

"The new jail will be build largely from the bricks of the old jail. Prisoners will be housed in the old jail until the new jail is completed." 

As bizarre as that sounds, that's exactly what has to happen in rebuilding an ongoing enterprise. 

This morning, for example, I testified before a Senate Subcommittee explaining GM's closing of our Norwood and Hamilton plants near Cincinatti. 

Obviously, as we bring new, high-technology plants on line, our oldest, least-efficient plants must be phased out. 

Hardware is a factor. The Norwood plant, for example, was built in 1923 -- the year GM stopped making cars with woooden wheels. 

Yet humanware is far more a factor than hardware. It really comes down to how well a team of people can work together... how well they can perform with the equipment they have. 

So plants must close. But not arbitrarily, and certainly not abruptly. GM doesn't cut and run. We are dedicated to meeting the responsibilities to our employees and to the communities in which they live. 

Our last plant closing, for example, was in Tonawanda in upstate New York. Of the 2,130 employees there, 1,850 where either transferred or retired. And everyone else was given the opportunity for job retraining, entirely at GM's expense. 

So we're concerned about the disruption of rebuilding.. disruptions to lives and communities. Yet I feel it is important to keep this in perspective. Modernization means that new facilities will be world competitive... and in the long run, that's the only way to minimize the far greater disruption of lost jobs. 

At the same time as we're closing these plants, we're opening six new ones. But tomorrow's headlines will show only the construction dust. Only the plant closings. 

To me, that makes as much sense is the unveiling of a statue by focusing only on the chips of granite on the ground. 

So I guess what I'm saying is "pardon our dust." 

We're rebuilding at an unprecedented pace. We're stirring things up, kicking up lots of dust. 

When the dust finally settles months and years from now, you'll see a new General Motors, one that will much sturdier, much better able to withstand the competitive winds of change. 

Now I've told you all this not just because I want you to appreciate the massive rebuilding we're doing -- though that would be nice. More important, my hope is that people will begin to understand the urgent necessity for long-term planning... that the public realize it takes time, investment, and inevitably, disruptions. 

For the truth is that many other American companies, if they are to survive, are going to have to go through the same kind of reconstruction. It's the only way to come to a affirmative answer to the question -- Can America compete. 

My hope is that our industries will rebuild... that they will stir up such a cloud of activity that the world will gasp at our dust. 

And one day soon, instead of saying "Pardon our dust," we'll get saying "Eat our dust"... as America roars ahead of the pack and regains world leadership. 

Thank you.