THE AUTOEXTREMIST

November 3, 2010

It’s all about respect, Mr. Akerson.

By Peter M. De Lorenzo

(Posted 11/1, 7:30 p.m.) Detroit. As the Ghost of Pontiac passed over the weekend - with the last of the existing dealer agreements expiring on October 31 – the “new” GM was looking ahead. Way ahead. As the company’s financial boffins were preparing the much-anticipated road show (aka “The Wall Squeak Circus”) to sell the company’s IPO - in the quest to get out from under the “Government Motors” moniker and see their way clear to financial and decision-making freedom – I doubt anyone down at the RenCen could be bothered with the thought of the demise of Pontiac. After all that was the “old” GM and it had nothing to do with the “new” GM and where it needed to go, right?

Not so fast.

As I said in my column “The Soul Survivor is now just Dust in the Wind” Pontiac will always hold a special place in my heart, and the lessons learned from its triumphantly exhilarating heyday to its criminal mishandling and neglect at the hands of ham-fisted GM marketers and corporate bean counters - through to its eventual and ultimate demise - are still fresh and applicable to today’s GM. And judging by developments of late, the Pontiac perspective couldn’t be timelier.

Example No. 1? I have no idea what possessed freshly-minted CEO Dan Akerson to boast to anyone who would listen last week that the new Cadillac ATS models coming in 2012 and slotted below the CTS - in order to take dead aim at the BMW 3 Series and Mercedes-Benz C-Class - would basically kick the competition’s ass and take names, but that’s exactly what Akerson did. And it said more about what Akerson doesn’t know about this business than anything I could have written.

Even though there once was a time-honored tradition of making grandiose pronouncements about how great things were going to be in the past by Detroit car executives – who could ever forget Lido Iacocca saying in so many words that the U.S. automakers would “drive the Japanese imports back to the ocean” at one point – Akerson’s comments were irresponsible and indefensible.

I mean come on, really? The new Cadillac ATS is going to displace the perennial “best all-around sports sedan” – the BMW 3 Series – and a pretty nice piece of work in its own right – the C-Class – right out of the box? Ridiculous. And no, it’s not because the men and women involved in this new GM product program can’t deliver the goods, because I will state emphatically that they absolutely can. They’re more than capable, as a matter of fact.

But part of the rationale behind the campaign by Detroit automakers to distance themselves from the hoary image of the “old” Detroit is to not do things that the “old” Detroit used to do. And running your mouth off about how good it’s going to be instead of shutting up and delivering outstanding products that speak for themselves is symptomatic of the same old Detroit bullshit as far as I’m concerned.

I’m sure the product development teams working on the new Cadillac ATS would have preferred that Akerson had kept his mouth shut, that they’d much rather earn good comments about these new cars, having those favorable comments bubble-up from the ride and drives, the reviews and the word-of-mouth chatter. That’s how it’s done when a majority of the consumer car buying public out there is pathologically skeptical about anything and everything to do with the American car companies and the products they build. That’s how it’s done when you’re picking yourself off of the mat after a knockout punch called bankruptcy and the taint of “loser car company” that comes with it.

Instead they have a Wall Street money guy - who by the way was handed the reins of the company for no apparent reason other than the fact that he was in the right place, at the right time, at the right board meeting and he was the next man on deck who knew how to hang with and speak the language of the Wall Squeaks - running his mouth off to the media about a car not many have seen, no one has driven and no one wants to automatically attach greatness to just for showing up.

I have heard enough about Akerson’s so-called management “style” – complete with the in-your-face fear and intimidation tactics – to know that the blunderbuss approach isn’t going to work down at The Silver Silos. It may work in the murky world of investment banking Akerson came from (the land he parked himself in after steering one company into the ground) – where the size of the ahem “nut” you’re managing is directly proportional to how big of an asshole you can be – but in a business Akerson has no credibility whatsoever in?

Not so much.

I’m sure the whole blunderbuss management-style thing has a lot to do with a wayward mentor in Akerson’s background, but it’s certainly no excuse for making stupid pronouncements. It not only says that Akerson doesn’t have the first inkling as to what this business is all about, it says that he doesn’t have even a shred of respect for the people who actually do.

I brought up Pontiac for a reason. What Bunkie Knudsen did when he took over Pontiac in 1956 could provide just as valuable a playbook for GM going forward, because the same fundamental issues were all present and accounted for even back then. Even more so, in fact. Faced with a moribund industry nameplate that was getting lost in GM’s corporate shuffle, Knudsen assembled the best and brightest car people he could find - Pete Estes and John DeLorean just to name two - gave them marching orders to juice up the looks and the performance of the Pontiac lineup, and then stood back and let them do their thing while giving them the financial wherewithal and support they needed every step of the way. And for the better part of 35 years after that – minus a few missteps here and there – Pontiac thrived as the maverick car company that marched to a different drummer and lit up the industry by delivering hit product after hit product, as well as huge profits to GM (at least in the glory days of the 60s through the mid-70s at any rate).

That GM lost touch with Pontiac – and the fundamental High-Octane Automotive Truths that powered it to greatness during its glorious heyday – was no surprise, given the fact that in recent history there were far too many people at GM who didn’t have the first inkling as to what the car business was all about and who had no clue as to how to go about fixing what needed to be fixed, either. Toward its humiliating end Pontiac was something completely beyond GM’s level of understanding, unfortunately, which was a complete travesty.

To a degree, what GM has managed to accomplish with today’s Cadillac mirrors the Pontiac story of long ago. Cadillac was so far lost in its Landau Roof, “Vogue” tire haze more than a decade ago that it was clear that things could not continue if the iconic American luxury nameplate was to survive. And in order to save it, a team of dedicated car people came together and chartered a new course for the brand while totally revamping its design and engineering focus. And now, eleven years later, the fruit of their vision and dedication is manifested in brilliant cars like the Cadillac CTS-V and CTS-V Coupe, cars that need no “pretty good for an American car” apologies or disclaimers to be considered among the best in the world.

The key point here is that in order to succeed in the automotive business of today the focus must first and foremost always be on the product, just as it was 55 years ago. That means designing, engineering and building exceptional machines that bristle with quality, deliver a level of performance with overall efficiency that’s consistent with today’s market-driven environment, and most important, machines that register on an emotional level with customers and connect with people in a way that make them too compelling to be ignored.

And as a car company you can’t do that without having a fundamental respect for the product and the people who are able to deliver those products. From the designer who pushes the design envelope that much further to the suspension development engineer who keeps searching for that perfect combination of nuanced ride and handling, all the way to the assembly technician on the factory floor who comes up with a way to do it more precisely and consistently - make no mistake, success in this business is all about respect.

I find it beyond puzzling that Mr. Akerson was handed the reins of the “new” GM just because of his familiarity with Wall Street. That might be politically expedient during this IPO process that’s looming large over the company over the next few weeks – after all Wall Street types are more comfortable dealing with their own kind – but after that, then what?

I’ll tell you what.

I fear for a “new” GM that’s shaping up to be way too much like the GM of the bad old days. That GM was dominated by financial “experts” unleashed during the Jack Smith era who were woefully out of touch with the realities of the business and who were wildly out of sync with the people – make that the True Believers – who were battling in the trenches to make the products the best that they could possibly be (and against all odds I might add too).

Back then there was a fundamental lack of respect for the product and the people who could make the products great – if given the resources to do so – and that giant disconnect was the beginning of the end as GM’s long, slow slide to oblivion picked-up speed.

Dan Akerson has a role in the “new” GM whether I happen to like it, or not, so I will be happy to give him a few pieces of advice.

1. GM’s success is not dependent on you and your financial minions; rather, it’s totally dependent on the True Believers battling away every day in the trenches to make the products great. Make sure they have the resources to do their job and then step out of the way. And stay there.

2. Avoid commenting on anything to do with product. You’re simply out of your league and you have zero credibility in that arena. You have two gentlemen in particular – Mark Reuss and Ed Welburn – who are more than capable of addressing any and all issues concerning product. Stow your blunderbuss attitude and listen, and then again, make sure they have every resource you can muster in order to help them do their jobs.

3. When it comes to marketing, see points 1 & 2. You have the right team in place so let them do their jobs, and yes, make sure they have the resources to get it done.

4. If all else fails, shut up, listen and learn. Just because you’re the designated CEO of the moment doesn’t mean that you’re qualified to fulfill that role. Unfortunately for everyone hard at work in the trenches at the “new” GM your actions aren’t exactly engendering boatloads of confidence at this very moment. Why? Because it’s painfully obvious that you don’t get it and your “ramp-up” time is going to be a roller-coaster ride of bad decisions, bluster and poor judgment. You’ve already put your foot in your mouth once – and that’s just in public – and from what I’m hearing – and believe me it’s not pretty - that’s just the tip of the iceberg.

It’s all about respect, Mr. Akerson. In order to get it you’re going to have to earn it, and trust me on this, thrusting yourself into situations and areas of expertise that you have no business weighing-in on is no way to go about getting it.

And remember one very crucial thing: After the dust settles from the IPO the real work begins. Right now - with all things on the table and the future of the “new” GM at stake - I’m finding it difficult to envision a role for you once that happens.

And that’s the High-Octane Truth for this week.

 

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