THE AUTOEXTREMIST

February 2, 2011

Exploding the “Cloak of Corporate Invincibility” and other fun stuff.

By Peter M. De Lorenzo

(Posted 1/31, 1:00 p.m.) Detroit. Well, after last week’s column highly annoyed some people down at the Silver Silos – and opened the eyes of others internally who have been asleep at the wheel, as well as those in the media who should know better while allegedly “covering” this business – I believe a follow-up is due.

Not to overstate the obvious, but I’ve been writing columns like the one last week (it’s still resonating far and wide around this business and on Wall Street, by the way), since Day One of this publication. Before Autoextremist.com none of the Sturm und Drang that is common on the Internet about this business existed, period. It just wasn’t done.

Before AE a “tough” piece about the biz or one of the executive leaders in it was usually confined to pointing out the obvious problems associated with the business or of that particular company, and the executive being interviewed would have to respond accordingly. And if he was responsible for the issues being brought up, or if they had occurred under his watch, it was even tougher, at least for back then.

But going so far as to call an executive out for being less than savvy or an incompetent bumbler just wasn’t done, because the fact of the matter was that a “Cloak of Corporate Invincibility” existed back then, and everything was shrouded in its murky code and unspoken aura of “it’s just not done that way,” at least if said reporter/commentator wanted to keep his, or in rare instances, her job. Or, even worse, if said publication wanted to see another car ad or industry perk thrown its way.

As I’ve said repeatedly it was a different time and a different era, and stories and commentaries that we take for granted today simply didn’t exist.

The reason my commentary on Dan Akerson resonated so deeply is that people immersed in this business every day understand how any sort of momentum or success in this business is hard won and incredibly fragile, and that if a wrong turn is taken -- or a fundamentally wrong direction is given by a leader (or leaders) of a new regime -- then it can all turn dismal in an instant, and the ramifications and repercussions can resonate for years afterward, resulting in mistakes, or worse, woefully uncompetitive vehicles in the market.

And in this, the most competitive market in automotive history, mistakes are not only intolerable; they can be monumentally costly as well. And with two monstrous bankruptcies still fresh in everyone’s mind, I think we’re all aware of just how costly those kinds of mistakes can be.

The Bottom Line is that Dan Akerson is learning on the job, and as scary as that sounds, it’s the High-Octane Truth. There is nothing in his background that could possibly prepare him for the monumental day-to-day decisions and pivotal cosmic realities that at times fuel and confound this business, usually at the same time and even, at times, in the same meeting.

Over the years I have witnessed a parade of well-meaning (well at least some, anyway), accomplished and highly-decorated business executives who have arrived on this industry’s collective doorstep to set it straight and make a real business out of the swirling maelstrom of mechanical ingenuity, manufacturing inevitability and fuel-injected passion that encapsulates the engine that drives America’s industrial fabric, and for the most part, they’ve all failed miserably.

Why is that?

It’s a lot of things, really. But the most pronounced negative for these executive “saviors” is a fundamental failure to understand even the most rudimentary elements that make up the uniqueness of this business, the kind that don’t fit into the typical B-School playbook. Combine that with a staggering propensity for not listening and a blind belief in what worked before -- in other industries that by the way bear no resemblance to the sheer complexities involved with designing, engineering, building and ultimately selling and marketing an automobile – and you have a recipe for disaster, and ultimately failure.

The most recent and by far the most egregious example of this were the corporate carpetbaggers from Cerberus who were going to “right” the Chrysler ship. They cloaked their motives in cynical, “we’re doing this for America” rhetoric while they systematically stripped that company of every last shred of competitiveness that it had left, all with the idea of flipping it for a huge payday in a few years. We all know how that worked out, don’t we?

By raising his eager hand when the job was put on the GM Board’s table, Dan Akerson has bought himself a very hard road. He has been thrust into a world that he has no gut feel for in the least, and true to form, he has been too quick and reactionary with the behind-the-scenes decisions, which he is ill-equipped to make. And that’s a direct result of the fact that he hasn’t been able to develop the cadre of trusted advisors within the company yet, the ones who can steer him around the obvious pitfalls and traps while schooling him on what’s important and what needs to be considered before crucial decisions can be made, while he’s busy learning this business on the fly.

To make matters worse, “Lt. Dan” has made ridiculous pronouncements to the media, the kind that not only can and will come back and bite him in the ass, but the kind that can be costly to GM’s competitive presence in the market down the road. That’s a direct result of him getting flat-out bad advice or at the very least the wrong advice from his – ahem – crack PR team, and I’d be shocked if there wasn’t a major house cleaning in that area soon because it’s clear that left to his own devices, Akerson’s media presence is going to get much worse before it gets better. And that simply cannot continue.

The era guided by the “Cloak of Corporate Invincibility” in this business has long since past. Now it’s a cruel, Internet-fueled world made up of a cacophony of instant opinions that constantly resonate in a relentless hum of negative – or positive – energy depending on the day and the subject at hand.

Dan Akerson has had the keys to General Motors tossed across the boardroom table at him, and he has them well and truly within his grasp, but unless he starts listening to the people in the executive trenches who actually do know better, or at least finds the right set of advisors that he’s at least willing to listen to, then I will reiterate that his tenure at GM will not only be short-lived, the damage from his brief reign could be strategically costly for the company.

That’s the High-Octane Truth for this week.

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