January 26, 2011
The looming train wreck at General Motors.
By Peter M. De Lorenzo
(Posted 1/21, 5:30 p.m.) Detroit. After upending GM’s product development function by punting former Chief Tom Stephens up and out of the way to the new title of Chief Technical Officer and promoting Mary Barra as the new head of GM’s product development function, it’s clear to me that GM CEO Dan Akerson is hell-bent on “re-imagining” GM in his own image, even though that image has disaster written all over it.
Marching to the dulcet tones of a soundtrack based on his own unimpeachable convictions - even though they are unencumbered with any real depth of knowledge or understanding of what this business of making cars is really all about – “Lt. Dan” Akerson has launched an offensive to put his stamp on the company, no matter what the cost. And I predict those costs will be cataclysmic for GM and may just cripple the company down the road, just when it needs to be firing on all cylinders.
If this is a business about product cadence – which it most definitely is – then the “new” General Motors is on a runaway train to Hell. After all, this is a guy who has proudly admitted “I’m not a car guy” from the get-go, underlining that statement by making some plainly horrific comments to the Wall Street Journal in a revealing interview conducted right before the Detroit Auto Show.
Do you want to know just how dangerous this guy is to the future stability of GM? In that interview Akerson insisted that GM has too many engines globally, and he’s going to “fix” that. Uh, and he’s basing that on what, exactly? Secondly, Akerson is quite certain that GM is spending too much time and money differentiating sheet metal between the divisional nameplates, when a little creative marketing would suffice.
Oh really?
The last guy who believed that at GM was John Smale and we all know how that turned out, don’t we? The Smale “Reign of Terror” (executed by his Chief Acolyte, Ron Zarrella) was so mind-numbingly wrong-headed that it ended up unleashing a string of products bristling with all of the P&G-infused, marketing-driven mumbo jumbo that the Smale/Zarrella brain trust could muster - revolving around the fundamental premise of it doesn’t matter how good the product is, because brilliant marketing can overcome anything - and resulting in the most woefully uncompetitive and out-of-touch products in the market. Not only was it a complete disaster, it ultimately helped set the table for the most humiliating corporate bankruptcy in American history.
How is the Smale/Zarrella “Reign of Terror” any different from “Lt. Dan’s” vision for the future of GM? Let’s review, shall we?
Let’s see, carpetbagging interloper plucked from corporate obscurity by a flat-out incompetent board of directors and then handed the keys to the candy store just for showing up that day? Check.
Instant "expert" who has studied the business for oh, about ten minutes, and who now boasts as to how he will set the industry straight and show everyone how it should be done? Check.
Talking “customer-focused” decision making while putting product development on a cost-cutting binge that takes precedence over everything else, because after all, we’ll fix it in marketing, right? Check.
Guess what? I’ve seen this movie before and it doesn’t end well. The only difference between GM then and GM now is that this is a company that has only recently emerged from the Abyss of bankruptcy, one that can ill-afford a single misstep brought upon by misguided leadership, even though it has the most competitive lineup it has had in decades. And make no mistake: Dan Akerson’s “leadership” is at the very least misguided.
How misguided? The provocative statements Akerson has made to the press - implying that he has ordered the product development troops to cut $10,000 worth of cost out of the Volt, for instance - don’t even come close to the bone-headed orders he regularly fires off behind closed doors.
And the personnel changes GM has announced this week? They’re emblematic of the intense turmoil going on within the company stemming from the fact that Akerson is wreaking havoc on product development, something he doesn't have a feel for or the qualifications to do, to put it charitably.
The True Believers in GM Product Development have chafed under the barrage of nonsensical orders and pronouncements emanating from Akerson by the minute, and they have pushed back, hard. And one thing you don’t do to “Lt. Dan” is push back, because if you do, you’re either moved or exited from the company.
And after reading all of the gushing media coverage this week giving Akerson credit for being an “enlightened” leader as if he’s some altruistic Big Daddy for promoting a woman to a top position in this business – and there are thousands upon thousands of superbly talented women in this business who are often overlooked, a reality that remains a glaring and historically documented failure of this industry – I’m going to have to throw an ice cold pitcher of water on the proceedings.
By all accounts Mary Barra is an exceedingly bright woman who is an excellent manager but make no mistake, Ms. Barra didn’t get her new assignment because she’s the most qualified individual for the position. No, Mary Barra got her job because “Lt. Dan” needed someone in that position who would do his bidding, and who will bow to his wishes and execute his “plan,” as convoluted, misguided, reactionary and wrong-headed as it may be.
Because the True Believers in Product Development weren’t buying what he was selling. And they weren’t buying his unmitigated bullshit calls or his inability to grasp even a shred of the reality needed when it comes to the business of designing, engineering and building automobiles. In other words, true product people can smell an instant automotive “expert” when they see one.
And Akerson isn’t just setting a new standard for instant “experts” in this business – a rogue’s gallery chock-full of executives who left a trail of tears and destruction at various times throughout this industry’s history, by the way - he’s writing an entire new chapter right before our eyes.
The most glaring thing that Akerson fails to understand about this business? He thinks that the product development function is a process that is solely controlled by cost, when in fact product development is an ever-changing kaleidoscope of technology utilization, engineering philosophy, product vision, cadence and cost, with a large measure of gut feeling and passion thrown into the mix. And that last part, the “gut feeling and passion” part? That is quite simply the Black Art of this business, the very essence of which - if orchestrated properly - separates the outstanding product executions from the merely good or mediocre ones.
But when you’re Dan Akerson and you don’t have even a rudimentary understanding of what this business is all about, and you have difficulty grasping the “gut feeling and passion” part, then putting in a manager to speed the product development “process” along makes perfect sense.
Add to all of this the fact that Akerson conducts himself as if he’s on a search-and-destroy mission, with his bull-in-the-china-shop management “style” routinely lacking even a whiff of subtlety and nuance, and you have a recipe for disaster.
Now, I know some of my esteemed colleagues in the media and the blogosphere have bought the spin generated by GM’s PR troops on Akerson’s moves hook, line and sinker, regurgitating such pre-packaged pap as, “Visionary moves by GM’s CEO,” “Akerson puts his stamp on a new, tech-savvy, customer-focused GM,” and “Akerson promotes diversity in the new GM,” etc., but the real story has none of that sheen or carefully orchestrated gloss.
No, the real story is that “Lt. Dan” is an egomaniacal corporate opportunist with an overwrought sense of himself, one who will shake the neck of GM until it falls limp in his hands so that he can then rebuild it in his image. And believe me that image is not pretty. It’s not one of a customer-focused, enlightened, tech-savvy automotive company of the future, by any means. Instead, it will be a company stripped to the bone in the interest of delivering short-term eyeball-popping profits for the next couple of years, but which will then be left a woefully uncompetitive hollowed out husk of a company by 2016 because of a product development “process” decimated by functionaries imbued with the Akerson gospel of speed and cost cutting - product relevancy and integrity be damned.
So please spare me the hyperbole associated with Dan Akerson and how he is the latest in the long line of saviors for General Motors. “Lt. Dan” is a corporate blunderbuss masquerading as a “switched-on” visionary auto executive, except there’s nothing visionary about the shallow reservoir of knowledge that this guy brings to the table every day. Instead, it just falls under the time-honored dictum of a little bit of knowledge is a very dangerous thing.
The Bottom Line?
Dan Akerson is the wrong guy, at the wrong time, at the wrong car company.
And as long as he’s at the wheel, GM’s long-term future is at risk.
That’s the High-Octane Truth for this week.
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