THE AUTOEXTREMIST

May 9, 2012

Here we go again.

By Peter M. De Lorenzo

(Posted 5/8, 6:00 p.m.) Detroit. So on Monday, GM CEO Dan Akerson, in an interview with The Wall Street Journal’s Alan Murray, was responding to a question about how he had promoted Mary Barra, when this exchange took place:

MR. MURRAY: You got some criticism for that appointment.

MR. AKERSON: Yeah. I was surprised, quite frankly. I mean, because I wasn't a car guy. But I almost think that being a car guy right now isn't the best thing, because the car guys drove it over the edge.

All together now, “because the car guys drove it over the edge.”

Oh really?

I don’t have to interpret what Akerson was saying for you, do I? No, of course not. After all, this car guys vs. bean counters thing has been going on since the dawn of the automobile industry. The recent Bob Lutz book was just the latest installment of this age-old discussion, until Dan Akerson decided to weigh-in, of course. And the discussion will continue long after Messrs. Lutz & Akerson trot off this mortal coil, you can count on that.

What does it all mean, exactly? Not much. Akerson was responding to a question and talked too much, as is his wont, but there was no revelation in that statement coming from him. Why? Because he was being reflective of the current leadership at GM and its board.

It may be a good time to remind everyone that throughout its formative years, and even through its glory days – roughly 1955 to 1980 – GM, of all the automotive manufacturers, was a financially driven company. Alfred P. Sloan, the architect of the modern General Motors, famously once said, “The business of business is business.” And he followed that up with, “We’re not in the business of making cars, we’re in the business of making money.”

But Sloan should never be dismissed as just a finance man, because along with the fact that he was a trained engineer, he was an absolute visionary when it came to structuring GM to take advantage of “every purse and purpose” in the market. And it worked for decades.

The difference between then and now? GM was a juggernaut back then, the most powerful company in the world, and even the financial types knew when to shut up and stay the hell out of the way of guys like Harley Earl, Ed Cole, Bunkie Knudsen, Bill Mitchell, John DeLorean, et al. Every time one of the finance guys began to question a number here and there, they were quietly told to stand down, especially if the profits continued to pile up like cord wood, which was a daily occurrence.

It was a decidedly different era, there’s no doubt. Oh, to be sure, there were the deeply-rooted financial fiefdoms and the equally entrenched product engineering/styling fiefdoms, and the two camps shared a sort of semi-antagonistic coexistence, but as long as GM was kicking ass and taking names, it’s remarkable just how much they got along when they needed to.

But make no mistake, however, though it was the gray-suited finance men that drove GM’s financial engine, it was the gifted and wildly talented characters – the “car guys” – in “Styling” and engineering that made GM cook like no other car company in its heyday. Any success GM achieved in its glory days was the direct result of the efforts of the “car guys” and the smartest financial guys knew that, or learned that the moment they arrived.

But then, as it usually does, things got weird.

The GM financial types, tired of the legendary car guys and their calculated histrionics to get their way, decided to clamp down on the GM system, even though it had made them all comfortably well-off for the most part. It was at this pivotal moment in GM history that the company went from being about the product to being about the process, and GM would never be the same again.

The company meandered through the next decades, careening from one financial messiah to the next, starting with Roger Smith and culminating with the disastrous John Smale-led Brand Management era. And throughout the entire time they failed to take the massive shift in the market seriously, and GM’s market share plummeted downward in a straight line.

By the time Rick Wagoner assumed control of the company, the writing was on the wall. Yes, the global financial meltdown of 2008 put paid to any of Wagoner’s hopes that the company could dust itself off and get off of the mat one more time, but it was all over but the pirouette into bankruptcy.

But let me clear about one very important thing: It wasn’t the “car guys” that drove GM “… over the edge” as Akerson put it. No, time and time again it was the car guys and girls that kept GM even remotely in the game. It was GM’s True Believers in Product Engineering and Design who managed to make sure that some outstanding products made it to market despite the hindrances, bone-headed tail-chasing and flat-out obstacles put up by the financial types who overran GM in the 90s and early 2000s.

And it was these MBA for MBA’s-sake minions who drove GM “over the edge.”

But then again Akerson is very much a financial type who subscribes to the theory that the business of business is business. And one thing and one thing only motivates him every day, and that is to get GM out from under the crippling “government motors” tag so that it can compete once again unshackled by the myriad restrictions placed upon it. That doesn’t excuse what he said in the WSJ interview, it just gives interested parties a very realistic and revealing look at what passes for culture at GM these days.

Memo to Mr. Akerson and his legions of financial troops: I hate to be the bearer of bad tidings but you will never be the reason for GM’s success, now, or in the future. It will be the True Believers, the men and women of General Motors who are actively engaged in the business of making great cars and trucks, who will get it done.

I will leave you with this little story from a Different Time and a Different Era. The year was 1967 and it was a searing hot afternoon in July. I was standing in the driveway of the Bloomfield Hills Country Club with my dad, waiting for his car to be brought around. We had just witnessed Bill Mitchell, all pissed-off and agitated (he attempted to play golf but absolutely hated it and he would inevitably storm off the course after nine holes spitting fire), get in the original Sting Ray racer, shove his clubs in the passenger seat, and then light up the tires in the country club’s driveway before blasting down Long Lake Road, his foot well and truly in it, banging off shifts all the way home.

While Mitchell made his spectacular exit, I noticed a burgundy Chevy Nova (with black vinyl roof, dog dish hubcaps and blackwall tires, the absolute cheapest thing you could get at the time from GM) pulling into the club. It made its way around and pulled up to the valet stand, and lo and behold out popped George Russell, GM’s Vice Chairman and Chief financial man. I remember looking at my dad after Russell made his way in, and just shook my head. The juxtaposition was priceless, and that moment will remain etched in my mind forever.

The financial types may think they are the center of the universe, especially in the current environment at GM, but make no mistake: it’s the True Believers who have the fate of the company in their hands. They’re the ones who keep long nights refining a new design to be just so. They’re the ones who spend an extra three weeks to get that last bit of steering feel perfectly dialed in. And they’re the ones who make damn sure that GM stays in the game.

Thank goodness for that.

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

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