GM boss plays Honest Dan

2011-12-19 08:46

Dan Akerson is hardly a corporate diplomat.

The chairman and chief executive at General Motors says publicly what other CEO's say in private: he disses competitors' cars and laments his company's lumbering bureaucracy. He's told reporters that Ford should "sprinkle holy water" on its troubled Lincoln luxury brand and has called Toyota's Prius hybrid a "geek-mobile." His candour often rattles the nerves of GM's public relations staff.

And you know what makes him really mad?

"There is a resistance to change" at GM, Akerson told The Associated Press.


By all accounts, though, the auto giant is moving at a faster pace under his leadership as he tries to overcome that resistance.

Akerson is not the first to complain about GM's bureaucracy but for the first time in years, the automaker has somebody at the top with an outsider's vision and a will to make changes to keep profits flowing and return the company to the glory years of a generation ago.

GM now has a line-up of cars and trucks that is selling well and it has turned a profit for nearly 24 consecutive months.

Yet for Akerson, who took the CEO job 15 months ago, the work has just begun, and it hasn't gone totally as planned. He's being tested by a federal investigation into battery fires after crash tests in the Chevrolet Volt electric car and he's grappling to fix GM's high-cost European operations, which are losing money.

Akerson was recruited by the federal government to join GM's board in 2009 just as the company was leaving bankruptcy protection. The government was majority owner at the time and Akerson thought his management, financial and engineering skills could help a company so important to the US economy.

He's a US Naval Academy graduate who grew up in Minnesota and admits he knew little about cars in the beginning but now he speaks with authority on everything from transmissions to batteries and spoke with The Associated Press in New York about the car industry, the economy, his management style and the future of electric cars.

Excerpts appear below, edited for length and clarity.

Q: Would you recall all 6000 Volts to strengthen the battery?

A: If we find that is the solution, we will retrofit every one of them. By the way, if someone wants to sell it back to us now, we'll take that too. We're quite confident that we'll find a solution.

Q: Do you think the news about the Chevy Volt will harm sales of electric vehicles?

A: This car is safe. There is nothing happening immediately after the crash. I think in the interest of General Motors, the industry, the electrification of the car, it's better to get it right now, when you have 6000 - instead of 60 000 or 600 000 - cars on the road. We're not the only car company that has liquid cooled batteries out there. There are many. So we think this is the right thing to do for our customers, first and foremost, and it was the right thing to do for General Motors and the industry.

Q: Are you moving past the early technology adopters on the Volt at this point, or has any data surprised you on who is actually buying this vehicle?

A: About a third of the customers haven't been in a Chevy store in more than five years and half have never been in there. They aren't just early adopters.

Some of them - I think roughly half - are either Prius or BMW owners. So one, you could say Prius owners were probably early adopters in the olden days, but that's kind of passed through. But BMW people want styling, good design, and an innovative powertrain, or power source, and I think Volt is a game changer. And quite frankly that's one reason we want to kind of clear the decks here.

Q: When are we going to see the electric car as the typical family car?

A: It's an unanswerable question given what I know today, but people ask me and I say, "Well, I would hope by 2020, 10% of the cars sold would be of alternate propulsion." We're also working on hydrogen fuel cell cars which, in the end, are electric as well.

Q: How has the corporate culture changed at GM since you joined the board?

A: I would say, objectively, having been in the company in one form or another now for almost two and half years, that 90% of what we did was good. There is tremendous commitment and loyalty to this company. But it's that the 10% or 5 - I don't know how to quantify it precisely - we failed.

Recognise what went wrong, learn from it, move on. I can't change the bankruptcy. It's our interesting past. It's our family collage, if you will. I don't want to obsess on it, but I want to learn from it. And that's the mantra that we have as a team.

Q: If you could wave a magic wand, what two things would you change at GM right now?

A: I want a miracle solution on Volt in the next week. That's not going to happen. On a more serious note, it all starts and it ends with product. I want sustainable, differentiable product. The generation that you see for the consuming public today is not just competitive, it's very competitive. We're holding our own. We're taking share. We're profiting.

The second thing is, we've got to make sure that the culture evolves to one that's less hierarchal, flatter, more interactive, more participative.

Q: What do you see happening with auto sales in Europe?

A: It's hard to believe this, but it was only three years ago that I think there were many in this country and around the globe that thought the system was coming off the rails. It's amazing how short our memories are when you bring this up. People are going, "Oh, it wasn't that bad." It was bad. And when you fear for your job, that is uncertainty, and it's a negative bias and it undermines your confidence. And you saw it here. We hit a 40-year low in our sales in the 2008-2009 timeframe.

The Europeans, I think, felt about like we do today: concerned, but not threatened. It was an American problem.

I think the roles are somewhat reversed today. The Europeans are feeling a great sense of insecurity, doubt, and I think their consumer confidence is in question. You can see the sales have fallen off for the entire industry in Europe, and so you have to look at your profitability.

One of my four goals is to be profitable in all of our major regions and areas of operations. Last year, at this time, we were losing money. We restructured given what we thought to be the outlook. We're not going to achieve those sales and revenue numbers, so we have to look at our business operations there.

Q: What about China? What do you see happening in the economy there?

A: The Chinese government, I think, is very concerned with inflation. They're obviously a very active, very viable, economy and they've taken everything from reserve requirements to interest rate actions to try to slow it down. In the two years prior to this year, we grew by 20 to 30%.

That's a very difficult rate to continue to maintain, but if the market's going to grow on the order of two or three percent this year and we're going 10, that's fine by me. I do think the Chinese in some ways were prescient in that they saw a bubble creating and they clearly have cooled that down, and I think inflation has dropped off a bit. I think those were prudent actions looking over a longer term. So, I'm cautiously optimistic on Chinese growth and our role in it.