I don't know about you, but I'm starting to worry about General Motors
I own shares in GM, so this is personal. I also own shares in Ford
GM, on the other hand, concerns me.
A history that doesn't exactly inspire confidence
I knew when I bought my shares, shortly after GM's IPO, that this investment that would need very close watching. GM has a long, forehead-smacking history of cavalier financial (mis)management, products that were a step (or two, or 10) behind the class leaders, managers that seemed unable to see beyond the Detroit city limits as foreign competitors ate their lunch, and a corporate culture that did its best to stifle the considerable talent remaining within the company.
Since the early 1970s, GM's timeline is rife with blown chances, embarrassing missteps, and head-in-sand executive cluelessness. As I saw it, the company would need lot more than a quickie restructuring and a new CEO to really return to some semblance of its former glory. Its new boss would have to make some wrenching changes to GM's broken culture, just as Alan Mulally did so successfully at Ford.
New CEO Dan Akerson is certainly driving changes at GM -- but that's exactly what worries me.
"Lt. Dan" and the outsider problem
Akerson, of course, is an auto-industry outsider -- after a stint in the Navy, years in telecom, and a stay at a private-equity firm, he joined GM's board as an outside director in the wake of the auto giant's exit from bankruptcy. Akerson said at the time that he saw the opportunity to participate in the revival of GM as a "patriotic duty," and I think he meant it.
But after his surprise selection as GM's CEO, it became clear that Akerson was scrambling to learn the ins and outs of the auto business. A few early missteps led acerbic Detroit pundit Peter DeLorenzo to christen Akerson "Lt. Dan", a derisive nickname that has stuck in certain circles.
My worries about Akerson only increased after a lengthy interview the CEO gave to the Detroit News last month, in which he talked in detail about his vision for GM's future.
Akerson said some good things during this interview. I applaud his desire to make the famously leaden GM bureaucracy leaner and more "agile." Same goes for his focus on key global competitors like Toyota
But he also said some things that make me wonder about his ability to rally GM's rank and file, a critical component of the company's revival. Talking about two upcoming Cadillac sedans, Akerson said that "they're not going to blow the doors off, but they will be very competitive." Would you want to hear that if you were a GM employee who had put your best efforts into developing one of these cars?
Nice slip, Dr. Freud
In Akerson's defense, he might well be right, even if it was exceptionally bad politics to say so to the hometown newspaper. Cadillac has a long way to go before it can challenge the likes of Mercedes-Benz and BMW around the world. That's Akerson's ambition for the brand, and I think it's the right one -- but I also think (and here I'm speaking as someone who replaced a BMW with a Cadillac last year) that really truly getting the cars to that level will require deep thought and heavy investment.
While many of GM's products (not just Cadillacs) still lag the world's best, the company has made huge strides forward recent years. That is often attributed to the influence of former Vice Chairman Bob Lutz, an iconic Detroit "car guy" who revamped the company's product-creation process and encouraged the development of mold-breaking vehicles like the Chevy Volt.
But Lutz is retired now, and although Lutz-influenced products will continue to hit the market over the next year or two, the shape of GM's next generation of products beyond that -- the products that will show us whether GM really intends to lead or follow, that will or won't drive a renaissance in GM's prominence and stock price -- rests in Akerson's hands.