THE AUTOEXTREMIST

August 15, 2012

Mr. Akerson, your fifteen minutes are up.

By Peter M. De Lorenzo

(Posted 8/13, 12:30 p.m.) Detroit. It has been three years since Dan Akerson was appointed to the General Motors Board of Directors and coming up on two years since he assumed leadership of the company, and it’s clear to me that this executive is the wrong fit to lead the once-dominant automotive juggernaut. To be blunt, Akerson, who wears his U.S. Naval pedigree on his sleeve, has been an abject failure at leading the reconstituted General Motors, and on every level, and the evidence of that is piling up by the hour.

For starters, GM arguably has the most competitive lineup in place in decades, yet it continues to spin its wheels in the market. Akerson has time and time again used the excuse that being saddled with the moniker “Government Motors” has hurt the enterprise and that, combined with an economy that seems to be careening in fits and starts, is the reason that GM is underperforming in the market (although to be fair, GM doesn’t believe it is underperforming in the market in the least, but with the strength of their lineup, they most assuredly are).

There may be some credence to the “Government Motors” affliction, but as the months have gone by I no longer believe in the scope of its burden. There is something else at play here and to me it points to Akerson’s fundamental lack of leadership at the helm of GM, and that the accumulated business principles that he’s carried with him throughout his various corporate assignments, most recently at The Carlyle Group, have been largely ineffectual and at times inappropriate for the tasks at hand.

Akerson clearly believes in cost cutting as the magic elixir that will fix all of GM’s problems, but he fails to realize that, unlike in his stints at Nextel and XO Communications (which fell into bankruptcy under his watch), the automobile business is vastly more complicated, even though he categorically dismisses that notion. From the outside it appears that to Akerson the auto biz is just another widget conglomerate to play with, which is so ludicrous on so many levels that it’s difficult to fathom. Designing, engineering and marketing automobiles is one of the most complicated endeavors on the planet, but Akerson sincerely believes that you can blow up time-tested processes, ignore hard-won historical lessons, plug and play executives at will, and that it will all come good in no time. But it doesn’t necessarily work out that way. Not even a little bit.

And no, this isn’t a territorial knock about “an outsider” running a Detroit-based automaker, because that argument is nonsensical and obsolete. This is about having a gut feel for the enterprise, a sensitivity and understanding of what’s going on – and why – and a hearty respect for the lessons learned along the way. You’d think that a Naval man would have a fundamental respect for the historical lessons learned along the way, but no, Akerson not only ignores history when it comes to the auto business, he abhors it. How else can you explain his belief that you can cut your way to prosperity?

And stylistically, as the CEO of what was once a proud company (and to the True Believers it still is), Akerson has been an unmitigated disaster, almost from the very first time he opened his mouth in front of the media. There was the “They are trying like hell to resurrect Lincoln. Well, I might as well tell you, you might as well sprinkle holy water. It’s over…” comment, which was insulting and stupid and spoke volumes about what he didn’t know about the business. Then there was the comment he made about the upcoming Cadillac XTS and ATS, when Akerson said that the cars were “not going to blow the doors off, but they will be very competitive…” in the first of many direct insults aimed at his product development troops. Well, the fact is that both vehicles are extremely competitive, the XTS because in its albeit limited role it succeeds admirably, and the ATS has emerged as the most legitimate threat against BMW’s vaunted 3 Series in years.

Akerson’s comments knocking the company’s product development troops – the True Believers – has become a pattern, too, one that boggles the mind, especially given the fact that those dedicated people in Design and Engineering are the only ones keeping GM in the game. Just recently Akerson was at it again, suggesting that GM was lagging behind in engine and transmission technology vis-a-vis its competition, when in fact GM has some of the most sophisticated engines and drivetrains in the world in its lineup right now.

Hell, even Sergio Marchionne, the King of Hubris, who truly believes that he’s the smartest guy ever to grace a car company’s masthead and who thinks the industry would be much better off if it bowed-down and acquiesced to his indefatigable brilliance when it suits his needs, would never throw his own product development people under the bus. Even he knows better than to do that.

It’s as if Akerson takes his “give me five minutes and I will know more about your business than you do” quick-study executive “MO” to extremes, believing his instant widget assessments to be accurate and unimpeachable. And he has been proved wrong, time and time again. His constant harangues about blowing up the bureaucracies and fiefdoms within GM have validity, but I get the sense that Akerson doesn’t understand what that really means, especially when he lumps in his product development folk when it comes to assigning blame.

And his comments about derailing GM’s entrenched “culture” are flat-out ludicrous, because GM has been devoid of any demonstrable culture for going on 40 years, unless you count the relentless mismanagement by the financial types as a “culture.” Akerson could have changed that if he was a genuine leader, but he isn’t. Akerson is a bureaucratic functionary who was handed the keys to the car and he has been steering the thing down the wrong road ever since he got behind the wheel.

To make matters worse, Akerson’s propensity to throw around war analogies speak to his skewed take on what leadership actually means. His “Ol’ Blood and Guts” bombast and belligerent demeanor are not charming and instead his countless foot-in-mouth pronouncements peg the “wince” meter at every turn. And it displays tone-deafness on his part that is ill suited for an enterprise on the scale of GM, or any company for that matter.

You only have to look at the way the departure of Chief Marketing guru Joel Ewanick was handled as a sign that GM has a huge void in leadership at the top, as this ugly episode had Akerson’s fingerprints all over it. GM’s official statement on what went down was that Ewanick was up to no good of some kind during the course of global sponsorship negotiations on behalf of the Chevrolet brand with the Manchester United football club in England, and that the two parties agreed to disagree because Ewanick “failed to meet expectations the company has for its employees.”

Except that GM never really explained the detailed reasoning and left a trail of rumors and innuendo in its wake as they let the situation – and the explanation – twist in the wind. GM was incapable, or GM PR was incapable, of convincing Akerson that a proper explanation was in order (or they were culpable together). Instead it was left to reporters from Bloomberg News to sort through the mess last week and publish a story that Akerson termed as a “verbatim” account of what went down.

Except that it wasn’t. More details leaked out painting a picture of growing animosity between GM’s establishment – newly-defined under Akerson’s regime – and Ewanick, the free-wheeling advertising and marketing visionary who was beginning to clash with the GM way of doing things in some very public ways. To the point that Akerson decided to make an example of Ewanick by making him carry around something called a “Farley Award” (named after Ford’s global marketing chief) for the off-color, supposedly off-the-record remarks Ewanick made at the advertising award week in Cannes, France.

Is that the way a true leader would have handled the situation? No, of course not. A true leader would have talked to Ewanick privately, admonishing him not to do it again and if the point needed to be made further, leave him with some sort of token for his desk if it was deemed necessary to add some humorous levity to the point. But no, not Akerson. “Ol’ Blood and Guts” decided to humiliate one of his top executives in such a way that it did nothing but create ill will and remind everyone in the executive suite that when the chips are in play Akerson resorts to his default setting, which is as a petty, mean-spirited, tone-deaf blunderbuss of an executive who can’t be trusted.

And the ironic reality is that what Ewanick did wasn’t, in fact, illegal. What it came down to was that operatives within GM were gunning for him, that he had become a loose cannon, an embarrassment to the regime in their estimation, and there were financial maneuverings within the ManU deal that were beyond his purview that they could call him on and use to exit him from the company. (But I can assure you that this deal will prove to be a boon for Chevrolet in the long run, despite GM’s public hand-wringing, and in the end GM loses exactly the kind of executive it needs – especially in the marketing/advertising arena – to break out of its moribund way of doing things.)

When Dan Akerson got up in front of the assembled multitudes last week for an internal GM Town Hall meeting his entire repertoire of “leadership” qualities was on display: The combative posturing, the warped, “my way or the highway” belligerence, the insults to his own people, the threats, etc., etc. And though the employees of GM have been maligned in the media and thrown under the bus as a matter of course on an almost daily basis, I would venture to guess that nothing pisses them off more than to see and hear their alleged “leader” get up and say they’re doing a shitty job, that they’re not good enough, or fast enough, or worthy enough to be there, and that if they don’t fundamentally change the way they do things they’ll all be expendable.

Today, on a gloomy summer day in the Motor City, it’s clear to me that GM has arrived at a crossroads in its history yet again. Even though the U.S. Government will divest itself of its GM stock holdings not long after the election – no matter which party wins – GM is in a burgeoning crisis of leadership and of purpose.

And the most depressing thing about it is that the company’s options are few.

The Board of Directors is a recurring joke and remains the chief culprit. After all, these are the same people who believed that Akerson was the right guy for the job in the first place, and the company perennially suffers from its collectively stilted idea of guidance and its “go-along-to-get-along” mentality. Where is the outrage? Why can’t at least one board member muster the cojones to get up and question the road the company is taking, when it’s clearly going down the path to nowhere good?

I will close with this: Dan Akerson may be highly thought of in his inner circle of cronies at The Carlyle Group and with the rubber-stamping minions on GM’s Board, but there’s no question in my mind that his fifteen minutes are up. He's had plenty of time to demonstrate – and convincingly so, I might add – that he’s the wrong CEO, at the wrong time, at the wrong car company.

And it’s really too bad, because the True Believers at GM deserve so much better.

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

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