Extreme cost cuts or just sound practices?

A story in the Wall Street Journal outlines some of the cost cutting measures at GM as they face the worst crisis in their history.

The story starts out with wall clocks that now have the wrong time or stop working since GM has stopped replacing batteries to save cost of replacement and disposal (Insert: “How many union workers does it take to replace a battery?” joke here).

While not replacing batteries might seem extreme, some of the other measures GM is now employing (reducing number of copiers, stopping escalators at a certain hour, not using voice mail) have for a long time been part of standard operating procedure at many companies we have come in contact with. Successful companies – rich companies.

The point is – being thoughtful of cost should been part of your DNA from day one whether you are GM or Susan’s Bakery down the street. Saving money is much easier than making it for the simple reason you have more control.

Preview of article:
Over the past several weeks, engineers and technicians working at General Motors Corp.’s sprawling proving grounds west of Detroit started noticing a curiosity: an increasing number of wall clocks had the wrong time, or stopped working altogether.

The reason: As part of a drive to cut $15 billion in costs, GM is no longer keeping the 562 clocks in working order, which will eliminate the expense of replacing and disposing of the clock’s batteries and the cost of resetting them twice a year for daylight-saving time.

It’s not the only new measure GM is taking to save every last nickel. In its Renaissance Center headquarters, employees working late have to climb stairs when navigating its labyrinth of lower floors — the company now stops the escalators at 7 p.m. In designated cleanup areas of certain offices, the company has changed the type of wipe-up towels it buys. In a memo to employees, a staffer explained this will lower GM’s “cost per wipe.”

Rest on wsj.com

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