GM has a ways to go to get a clue

Thursday, August 13, 2009

Daniel Howes

GM has a ways to go to get a clue

The new GM doesn’t wear ties, doubtless a painful hit to the sales of Hermes and Ermenegildo Zegna.

But if open collars are a harbinger of a sharper, faster and hipper culture, a prerequisite for success in the cutthroat auto industry, that’s only what they are — a harbinger. Watching CEO Fritz Henderson’s frank admission this week that bankruptcy-slimmed General Motors Co. didn’t fully appreciate the perception gulf between would-be customers and its competitive cars and trucks gives new meaning to the word "troubling."

That’s a problem, starting with the simple fact that it took an economy-shaking, politically powered bankruptcy to produce a concession that has been so obvious to so many for so long.

As new GM moves into its second month, chastened by Chapter 11, new directors and the humbling of government control, the smart set hungers for markers showing the automaker has a legitimate shot to reverse its sales slide by persuading wary buyers to give its new metal another try.

Fair enough, because the newest Chevrolets and Cadillacs and Buicks and GMCs are reminders that delivering strong product is less a problem for GM today than it’s been since the first oil shocks more than 35 years ago. No, I’m increasingly convinced the central battle to rescue GM will be waged in the hearts and minds of people.

Customers? Sure. Politicians? Unfortunately. And also within GM’s own, starting with Henderson, his executive committee and cascading down from there. They must prove to themselves (let alone skeptical parties on the outside) that they are capable of the cultural change they so desperately need, that they can articulate what GM will stand for.

The cynical response is predictable: "Not possible." How could the people who manned crucial positions at GM during the downward spiral to bankruptcy and federal control, the thinking goes, be the same people entrusted to guide it to a revivified future?

For starters, they mostly aren’t the same people — not in product development or manufacturing or human resources or R&D or marketing. Nor are they operating under the same conditions or balance sheet. More important, they’re working for new outside directors whose bias likely leans more toward pushy than pushover.

Necessary, but not sufficient. Two more simple, if crucial, things would help. First, listen more and posture less because GM is out of the lecturing business, permanently. But for the intercessions of Team Obama — whose internal polling shows lower numbers for auto bailouts than for its botched health care reform campaign — GM would be in liquidation.

Second, borrow another page from the boys at Toyota Motor Corp., who elevated a simple Japanese credo to a cornerstone of their corporate mission. Roughly translated, it amounts to "go and see" — meet customers on their own terms, forge relationships that extend beyond the showroom, into communities and Washington.

There are glimmers of such introspection from inside GM, but so far less evidence of change. For those with a vested interest in GM’s success (which includes yours truly, a homeowner in Metro Detroit, and a whole lot of other folks in Michigan and beyond), evidence will come in relationships built, broken ones repaired and swagger replaced by purpose and clear communication.

With customers and a winnowed dealer body. With suppliers and the United Auto Workers. With directors recruited under the direction of a White House just unpacking the boxes. With members of Congress, who — like ’em or loathe ’em — are the closest thing to majority shareholders that GM has.

Which is why the departure of two influential members of GM’s Washington team — Elizabeth Lowery, vice president of environment, energy and safety policy, and Debbie Dingell, executive director of public affairs and community relations and wife of Rep. John Dingell, D-Dearborn — is so troubling.

Just as GM needs major firepower to rebuild its tattered (and back-channel) relationships with Washington, two of its most astute players choose the same week to say they’re leaving. They’re the latest in an unmistakable exodus of top women executives at a GM that says it wants to be more responsive to and reflective of America, not less. And not good.

GM’s leaders may operate under the assumption that they’re running the company, but it’ll remain "Government Motors," with all that implies, until it isn’t anymore.

Each new model year answers again whether GM has the hardware to compete against the best in the world. It does. But if it doesn’t have the right people building new relationships with the right people and, yes, the political class, it increases the risk of a final failure — and its brass would have itself to blame.

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