Starkman: The Inhumanity of GM and Corporate America

March 02, 2023, 9:22 AM

The writer, a Los Angeles freelancer and former Detroit News business reporter, blogs at Starkman Approved. This column first appeared on his blog. 

By Eric Starkman

I’ve been delayed this morning because I had to wipe the proverbial egg off my face. Back in October, in an effort to find something nice to say about General Motors amid more disclosures about the company’s growing litany of wrongdoings, I wrote favorably about Arden Hoffman (see third item), who GM lured from its limping autonomous taxi Cruise unit in San Francisco to become the automaker’s “chief people officer.” Hoffman held the same position at Cruise.

Hoffman has an impressive background, having previously worked at Goldman Sachs, Dropbox, and Google. She is a longtime champion of gay and lesbian rights and served as co-chair of GALN, Goldman’s gay and lesbian network of employees. After reading this 2008 interview with the Glass Hammer, I declared Hoffman the “real deal” as she spoke English rather than the usual HRspeak that’s common with folks in her specialty. 

Hoffman holds a Wharton MBA and a BA in rhetoric from the University of California, Berkeley. I was unfamiliar with what rhetoric studies entail, so I looked it up. According to UC Berkeley, rhetoric majors “are trained in the history of rhetorical theory and practice, grounded in argumentation and in the analysis of the symbolic and institutional dimensions of discourse.”

I remain as clueless about rhetoric studies as I was when I looked it up.

Arden Hoffman/LinkedIn photo

I lack Hoffman’s formal argumentation training, but I humbly argue that her reported oversight of the firing of 500 GM salaried employees involved some of the most despicable people officer messaging I’ve ever read. According to a letter obtained by the Detroit News, Hoffman wrote: “We are looking at all the ways of addressing efficiency and performance. This week we are taking action with a relatively small number of global executives and classified employees following our most recent performance calibration. They will be departing the company starting from today.”

The News didn’t make clear who Hoffman sent the letter to, but I’m guessing it was to all the GM people the Chief People Officer oversees. GM spokesman David Barnas provided the News with additional clarification.

“Today’s action follows our most recent performance calibration and supports managing the attrition curve as part of our overall structural costs reduction effort,” Barnas said in a statement. “This action impacts a small number of salaried employees and executives globally.”

The honesty and transparency of a corporation’s statements to the public and its employees reflects the integrity and ethics of the company’s CEO, or lack thereof. While GM Chair and CEO Mary Barra no doubt didn’t write Barnas’ statement, she approved it and therefore owns it.

Hoffman also has ownership, which surprised me as it was my impression that she was brought in to bolster GM’s HR management. GM announced Hoffman’s hiring last October just weeks after Barra was forced to apologize to GM workers for sending them a communique on a Friday instructing them they had to begin working from the office three days a week because the automaker had lost its edge.

“Over time, we have lost some of the important, intangible benefits of regularly working together in-person including, casual mentoring, more efficient communication and bringing an enterprise mindset to our work,” the Detroit Free Press reported Barra’s memo as saying. “We are entering a rapid launch cycle that, quite frankly, will define our future trajectory, and we need to drive change with speed — individually and collectively — so we can achieve our goals.”

Mary Barra/Deadline Detroit graphic

Months earlier Tesla founder Elon Musk ordered his entire A-team EV workforce back to work and none of them dared protest. GM’s workers were understandably miffed because in April 2021 the company introduced “Work Appropriately,” which salaried employees understood meant that even after the pandemic, it would be left to their discretion if and when they needed to go into the office to best perform their job functions. That Barra chose to announce her policy change on a Friday really pissed them off because many complained on message boards it ruined their weekend.

GM’s salaried workers no doubt felt betrayed yet again when told that 500 of their colleagues would lose their jobs. In Jan. 31 calls with investors, Barra and GM CFO Paul Jacobson said the company wasn’t planning any layoffs this year despite economic pressures and its goal to achieve $2 billion in cost savings over the next two years.

“I do want to be clear that we’re not planning layoffs,” the Detroit News quoted Barra saying at the time.

My sense is that Barra, who throughout her nine-year tenure has been given the kid gloves treatment from the local and national media, figured that she could get away firing 500 employees under the guise that they were poor performers, and she was clearing away dead wood. One doesn’t need Arden Hoffman’s Wharton MBA to figure out the discarded employees likely were focused on GM’s legacy gas engine vehicles, which the company is phasing out in favor of electric vehicles.

GM website

“Plain facts explain (GM’s layoffs) better than ‘performance calibration,’” Patrick Anderson, a wicked smart Michigan economist posted on LinkedIn. Anderson said the “plain fact” is that GM and Ford are selling fewer cars. It’s also noteworthy that Elon Musk makes more money selling his electric vehicles than GM and Ford make selling their gas engine and electric vehicles combined.

It’s cruel to fire employees for economic reasons and internally and publicly state that it’s for poor performance, as it makes it more difficult for them to find alternative employment. Hoffman appears on board with the messaging, which is in keeping with the best practices of Silicon Valley where she long worked and possibly still lives. (Hoffman’s LinkedIn profile says she works at GM but unlike her previously listed jobs, makes no mention of the city where she’s based.)

The Wall Street Journal reported two weeks ago that Facebook gave thousands of employees subpar reviews, which the publication indicated was a pretense to fire them. “Realistically, there are probably a bunch of people at the company who shouldn’t be here,” CEO Mark Zuckerberg told employees at a town hall last June.

Google, long hailed as one of America’s best companies to work, discarded thousands of employees by sending them middle-of-the-night messages telling them they were history and promptly disabling their emails. Some of these employees worked at Google for more than 20 years. Salesforce, whose founder and CEO Marc Benioff in good times told employees they were bound together like family, promptly fired 10 percent of his workforce when nearly a half dozen Wall Street investor “activists” began circling his company.

Elon Musk was ruthless in his firing of about three-quarters of Twitters’ 7,500 employees when he took over the company. He recently booted 200 more employees, including Esther Crawford, the woman in an iconic photograph sleeping on the floor at Twitter’s headquarters. Admittedly, there are many who didn’t perceive Musk as having much human compassion to begin with.

At Ford, employees learned about CEO Jim Farley planning to fire 8,000 salaried workers when Bloomberg broke the news. Farley, or his PR people, leaked the story to Bloomberg to impress Wall Street, whose denizens delight reading news about Americans losing their jobs in mass numbers.

Bloomberg, July 20, 2022

It’s telling how CEOs of major corporations diss their workforces and lament they have too many employees, but not one has assumed responsibility for the surplus hiring. For years I’ve been reading myriad articles about how effective “talent management” is the secret to a business’ success and how HR executives – er, I mean Chief People Officers – had developed all these sophisticated programs to attract and retain the world’s best employees. But as soon as the corporate going gets tough, they immediately become management toadies and gladly embrace heaving bodies out the door with nary an objection or care.

Then there are the corporate PR people who claim to be providing “strategic counsel” (as opposed to aimless counsel) who gladly serve up PRspeak spin or misguided messaging like invoking the memory of the Rev. Martin Luther King Jr. in their layoff communications.  Rest assured, PR people were responsible for the MLK messaging of Corewell Health CEO Tina Freese Decker and PagerDuty CEO Jennifer Tejada (see second item).

No, major corporations weren’t always like this. When I began in PR, companies went to great lengths to soften the blows when they had to let employees go. The layoffs were carefully scripted, so that fired employees didn’t have to undergo the indignity of exiting the building in front of their colleagues. Often there were genuinely caring HR people to provide support and explain benefits, and it was common for the fired person’s boss to break the news – in person.

The best corporate PR executives weren’t in-house spinmeisters and deceivers but often played a valuable role communicating a company’s values and ethics and ensuring they were maintained.

As an example, I once represented a major Canadian financial institution whose top executives truly believed in the values and ideals they espoused and wanted employees to live by. The company’s head of communications thought it a good idea to make certain employees understood the corporation’s values and gauge whether they believed them.

He put together a survey called Say/Do where all the company’s critical values were outlined, and employees were asked if they believed the company adhered to them. The results weren’t pretty, but changes were fast made. Some of those changes resulted in increased profitability.

That’s strategic PR.

CEOs running American corporations today are not an inspiring lot, and as I’ve previously argued, America has a serious leadership crisis. Yet their obscene compensation keeps rising, up 1,460 percent since 1978.

In 2021, the ratio of CEO-to-typical-worker compensation was 399-to-1 under the realized measure of CEO pay; that is up from 366-to-1 in 2020 and a big increase from 20-to-1 in 1965 and 59-to-1 in 1989.

As I’ve repeated noted, GM’s Mary Barra received $29 million in 2021 compensation, but the company’s stock trades less today than it did when she assumed command on January 15, 2014. Barra has bet GM’s entire future on electric vehicles, but in 2021 the company sold a mere 40,000 EVs. She told Wall Street that 2023 will be GM’s year, but she also told Wall Street there would be no layoffs.

At the end of the day, U.S. corporations function entirely for the enrichment of their shareholders. Investors in GM stock might want to demand some “performance calibration” and find a CEO who can generate decent market returns.

In the meantime, U.S. and Michigan taxpayers must continue shouldering the burden of Barra’s lackluster performance.

GM is America’s second ranked corporate moocher. The company paid virtually no taxes in 2021.

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