How did GM get its mojo back?
How GM got its style magic back
December 20, 2007
How did GM get its mojo back?
Two ways, as a character in a Hemingway novel said when asked how he went bankrupt: gradually and then suddenly.
Profound change takes place in increments, whether in an individual or an organization. The improvement can be unnoticeable until it becomes too great to ignore.
With the new Chevrolet Malibu and Buick Enclave — 2008 Free Press Car and Truck of the Year — it’s clear: General Motors Corp. can once again be counted on to build some of the world’s best vehicles.
"The cars and trucks GM has introduced over the last three model years or so stand alongside the best the company did in the 1950s and ’60s when GM was the peak of styling and innovation," said Joe Phillippi, an analyst who has advised investors about automakers since 1968 and is principal of AutoTrends Consulting in Short Hills, N.J.
The Enclave and Malibu are the consummation of an agonizingly slow process in which the world’s largest automaker completely reworked the way it designs and develops new cars and trucks.
There’s never been a shortage of talented engineers and designers at GM, but for decades, the company’s processes, politics and management blocked creativity and innovation, throwing one roadblock after another in front of the people who simply wanted to build great vehicles.
The reason the new "vehicles happened is that GM now has a hyperefficient, product-focused vehicle development program," said Jim Hall, managing director of 2953 Analytics of Birmingham. GM’s vehicle-development system today can stand alongside Toyota and BMW as the best in the industry, Hall said.
OK, do it again
The great challenge facing GM now is to institutionalize the processes that led to vehicles like the Enclave and Malibu and the Saturn Aura and Chevrolet Silverado, which were last year’s Free Press and North American Car and Truck of the Year. GM, with four of the six finalists, could again sweep the North American Car and Truck of the Year awards, to be announced at the Detroit auto show Jan. 13.
The changes that led to GM’s improved vehicles are now ingrained in the company as official policy:
• A single executive is responsible for each family of vehicles, usually keeping the job for 10 years.
• Each of GM’s global engineering centers now concentrates on the kind of vehicles it does best, such as trucks in North America, or mid-size and compact cars in Europe, developing them for sale around the world.
• The goal for each new vehicle is to be the best in its class, rather than simply hoping to be competitive.
It’s hard to believe, but for many years at GM, creating a great vehicle was seen as a stepping-stone to a better job rather than an end in itself.
The company began to address that in the mid-1990s with its vehicle line executive (VLE) structure. The VLE has ultimate responsibility for developing an architecture, GM’s term for the underpinnings for a family of cars or trucks.
A VLE’s 10-year tenure is enough time to see an architecture from inception through its first face-lift.
Before VLEs, no individual bore ultimate responsibility for new vehicles. It was common for executives to move in and out of key development jobs in just a year or two, too quickly to learn the job or have much impact.
VLEs who have delivered successful model lines include Gene Stefanyshyn, who developed the Epsilon architecture for the Malibu, Aura and Saab 9-3, and Anna Kretz, responsible for the Lambda architecture and the Enclave, GMC Acadia and Saturn Outlook crossover SUVs.
Wagoner’s team
Some of the credit for the VLE structure goes to GM Chief Executive Officer Rick Wagoner, who ran GM’s North American operations when the system began.
Wagoner put in place two other executives who played key roles in GM’s current resurgence: design chief Ed Welburn and Vice Chairman Bob Lutz.
Under Welburn, GM has developed an extraordinarily wide range of attractive vehicles, ranging from the big Cadillac Escalade to the rugged Hummer H3, Cadillac CTS sport sedan, Chevrolet Aveo and Opel Corsa subcompacts.
Welburn has reorganized GM’s global design staff and reinforced the identity of GM’s brands, creating a global face for Chevrolet, a contemporary new look for Cadillac and shared transatlantic styling for Saturn and Opel and laying the groundwork for Buick to regain the status it once held as a desirable and prestigious badge.
The outspoken Lutz, who described a GM concept car as looking like "an angry appliance" — a clear reference to the Pontiac Aztek — joined the company in 2001. He came to the automaker with two assignments:
• Give the designers a greater voice in creating new models.
• Demand excellence.
"There was a level of mediocrity that GM accepted," said analyst Rebecca Lindland of Global Insight in Lexington, Mass. "Bob Lutz rejected that and empowered people to do better. He puts the burden on you to create excellence, and he recognizes and rewards it when you do."
The colorful retired Marine pilot’s time at GM has spawned plenty of stories, but one in particular illustrates Wagoner’s wisdom in hiring a high-powered outsider to shake things up.
Lutz thought the gaps between the metal panels on a car GM planned to build were too big. They looked sloppy, even though the car was carefully engineered. He began one of his famous tirades, continuing until the executive in charge of making the panels said in exasperation, "Just tell me what you want."
"Gaps that are no more than 3mm wide," Lutz replied.
"OK. I can do that," the executive replied.
"Well, why didn’t you do it before?" Lutz said.
"Nobody asked."
Beyond Lutz
Lutz’s impact has spread throughout GM, but the company’s success relies too much on his presence, Hall said.
"Bob’s gotten the organization to pay attention to the right stuff, but it’s still not institutionalized beyond Lutz driving it," he said. "GM must build a process where making the best vehicle is the No. 1 concern."
The VLE system was intended to do that, but some VLEs have held the position for less than 10 years. VLE should be seen as the pinnacle of a career within GM, Hall said. "They must be the advocate for the customer and the conscience of what the vehicle needs to be."
VLE should be a person’s last job, the one they aspire to and retire from.
Otherwise, as the players responsible for GM’s current momentum retire or move on to other jobs, the company could lose its way again, gradually with a series of missteps until suddenly it can’t find its way back.
