GM’s remake still a work in progress
GM’s remake still a work in progress
Tue, Jun 4 detroitnews.com
“There was a certain degree of institutional arrogance at General Motors,” says GM Chairman and CEO Dan Akerson. (Ankur Dholakia / The Detroit News)When Dan Akerson stands before General Motors Co. shareholders at their annual meeting Thursday, one thing will be undeniably true: The company he leads is markedly different than it was 12 months ago.
The U.S Treasury is steadily unwinding its stake in the Detroit automaker, expected to be concluded next year. A presidential election campaign that reignited the post-bailout “Government Motors” meme is over. Market share is up and GM’s share price is rising, powered by 13 straight quarters of profitability and the automaker’s re-entry into the S&P 500.
GM is making discernible progress restructuring its European operations, including a push to pair the product development of GM’s Germany-based Opel brand with its mid-market Buick brand. And GM quietly is re-engineering the way it manages its business and awards promotions — or doesn’t.
The bottom line is that nearly four years out of bankruptcy, the new GM remains very much a work in progress. Its cars and trucks are better, their quality is better and the company’s financials are better. But too many totems of the old regime and its bad habits remain obstacles still to be overcome or removed.
“This is all about change,” Akerson said in an interview this week with The Detroit News. “The minute you stop evolving, you’re dead. We have to continually evolve. There was a certain degree of institutional arrogance at General Motors.”
Yes, there was, as Akerson’s self-described “nose plant” of GM’s bankruptcy so amply demonstrates. Almost three years into his tenure, the current CEO sounds like a leader determined to drive change through a hidebound culture still too comfortable with the isolating perks of drivers, executive bathrooms and too many management jobs for life.
The renovated 39th floor in Tower 300 of GM’s Renaissance Center headquarters makes his point, emphatically. Gone are the four office suites, each complete with a full private bath lest a midday shower be in order. Now, GM’s top 10 executives (soon to be 12) work in a more open environment designed to bridge silos, build a team and change the way the company operates.
“I came to work, not to shower,” he said. “Here it’s a little harder to do passive-aggressive behavior — give you a nod, walk out and ignore you. I don’t think you can be too removed from what’s going on. You’ve got to be part of the sausage being made.”
The reinvention of GM isn’t ending anytime soon because it can’t. After years of chaos in its financial management, GM is nearing the point where its finance and IT operations expect to be able to track the profitability of individual cars and trucks, a nearly impossible goal in the loose accounting systems of pre-bankruptcy GM.
Next week, the automaker expects to announce formation of a new Global Business Services group to reduce costs, complexity and improve coordination. The unit will include working groups from finance, human resources, facilities, real estate and indirect purchasing charged with managing their functions across GM’s regions worldwide.
To demonstrate more than lip service to expectations of accountability, GM is moving to end a time-honored practice of demoting underperforming managers and executives. The practice, all too familiar to many inside the company, is akin to a “management union” that tends to move around HR problems and block paths of advancement for others.
Accountability is starting to come in the product, too. When the 2013 Chevrolet Malibu hit showrooms to poor reviews and derision, GM broke from a longstanding tradition of making excuses for new metal and ordered a rush mid-cycle refreshening that is expected to debut this fall as a 2014 model.
Talk about change.
In Europe, where GM’s losses total roughly $15 billion over the past dozen years, the workout is under way. There’s a new CEO at Adam Opel AG, a reloaded management team and a plan to position Opel and its sister Vauxhall brand in the United Kingdom as mid-market entries above mass-market rivals Volkswagen, Ford and GM’s own Chevrolet.
Put another way: Akerson’s GM is determined to “hit the reset button on Opel” and address what he considers “the mistake” of introducing mass-market Chevrolet products into a European market where Opel also is considered a mass-market player.
Yes, he said “mistake.” To spend more than an hour talking to Akerson about the company he leads is a refreshing dose of candor. If you want feel-good rationalizations of how good things are at the General or massaged talking points or how wise their decisions are, listen to old tapes.
He knows there are many challenges, some of which keep him awake at night. He knows some find him brusque, that veterans are ruffled by changes to pensions, greater demands of accountability, a push to tie decisions to the needs of customers and the expectations of shareholders.
What he doesn’t know, or at least says he doesn’t know, is how much longer he will remain CEO. That’s up to GM’s directors and whether they determine that a suitable successor — preferably an insider, Akerson says — is ready to move up.
“We’ve got a good start,” he said, reiterating his mantra that GM needs to always “face facts” and measure its progress. “We still have a lot of issues we need to resolve. This is a transformation.”
Daniel Howes’ column typically runs Tuesdays, Thursdays and Fridays.
•Daniel Howes: When Dan Akerson stands before General Motors Co. shareholders at their annual meeting Thursday, one thing will be undeniably true: The company he leads is markedly different than it was 12 months ago.