A Phoenix Rises from the Ashes: the GM-LAAM Story
Unforeseen events and changes are often the curse of even the best of business plans. To survive and thrive, companies must be fast, agile, and creative.
Nowhere is this more true than in the Latin America, Africa, Middle East region (LAAM), where General Motors’ business has been setting new records in recent years. GM LAAM employs 33,000 people, has more than a thousand dealers, and does business in 86 countries and four primary languages — Spanish, Portuguese, English, and Arabic. It also has manufacturing plants in Argentina, Brazil, Colombia, Ecuador, Egypt, Kenya, South Africa, and Venezuela.
That makes LAAM by far the most culturally and geographically diverse of GM’s four regional teams — the others being Asia-Pacific, Europe, and North America.
In recent years, the GM LAAM team has leveraged this diversity to grow new business. But it hasn’t always been that way.
ca. 2000
GM’s roots in the region go back to the establishment of operations in Brazil in 1925 and in South Africa and Egypt in 1926. Before the 1990s, however, performance was sporadic and the region was not seen as a priority. For example, in the key market of Brazil (the region’s largest), GM do Brasil didn’t build its first car until the 1960s —before that, production had been limited to trucks, buses, and refrigerators. In the 1970s, many markets in the region were actually abandoned and there was little effort to coordinate those that remained.
This all finally began to change in a big way in the 1980s and 1990s.
In line with the new global focus of the entire company, the various business units within GM LAAM began operating as a single team, rather than a group of small and almost independent operations. Focusing on long-term growth rather than short-term ups-and-downs, the team re-entered countries that had been abandoned; entered new product segments of the market, and strengthened GM do Brasil’s strategic product development and manufacturing operations, which now play a crucial role in GM’s global product development.
Unforeseen events soon tested the new strategy, however. In 1998, economic crises in Latin America put GM LAAM in the red again. Then, in 2002, things got worse: Brazil and Argentina faced new economic crises; Venezuela faced radical political change; and, new violence erupted in several areas of the Middle East.
This time, the GM LAAM team was able to adapt quickly and aggressively thanks to its lean and agile business model. Just as important, the team was now able to quickly leverage GM’s own global product portfolio and production network for the region’s varied market needs.
The results of this reawakening and shift in focus speak for themselves.
Between the years 2003 and 2007, revenues increased 250 percent. For the first quarter of 2008, GM LAAM sales totaled 323,400 vehicles, a new record and a 20 percent increase over the same period 2007. This was the highest growth of any of General Motors’ four regional teams. All-time quarterly sales records were also posted in Argentina, Egypt and North Africa. And, first quarter sales records were set in Brazil, Chile, Ecuador, Venezuela, Middle East, and Israel. Sales in Brazil, the biggest market in the region, were up a whopping 36 percent.
Like the phoenix bird rising from its own ashes, the GM LAAM team today soars high over skies that were once nearly abandoned. And the horizon has never been broader or brighter.
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