UPDATE: 6/7/11: (See shareholder meeting video below)
Simultaneously acknowledging challenges yet speaking in strident tones regarding General Motors’ future, CEO Dan Akerson recently gave highlights to a strategy – that if it comes to pass – will mean great things for the Chevrolet Voltec platform.
Akerson’s two-hour interview with the Detroit News focused mostly on GM’s big picture as a company, including the rebounding automaker’s intention to learn from and take back market share from Toyota, which in 2008 surpassed GM as the world’s largest automaker.
Regarding the Chevrolet Volt, Akerson said the extended-range electric vehicle that is now still in its infancy, and holding off critics in light of a conservative roll out, will in just five years be “an old, old technology and old news.”
General Motors CEO Dan Akerson flashes a V for either victory or Volt after driving the Chevrolet Volt electric vehicle on stage during a Volt production celebration Tuesday, November 30, 2010 in Detroit, Michigan.
Unfortunately he did not let the cat out of the bag as to what the next Volt news will be, but we have heard similar hints from GM executives already, and this now is coming from the top.
At the very least this is another commitment to the Voltec platform hinting much more is yet to come over the next half decade. GM is being very careful not to reveal specifics until it is good and ready, and we are not surprised its top man kept to the policy.
The encouraging part of it for Volt fans is Akerson is presented as a man who means business, and has the ability to get the job done.
Akerson, 62, said he intends to perform a 3-4 year stint to revamp the GM culture and reinstate GM to number one as a legacy to his successful career that only recently included the auto business.
To do this, he left a high-paying job at the Carlyle Group, a private equity fund, and his net worth is estimated at around $190 million. Akerson essentially said it was a step down in pay, if not prestige, and the move cost him more than $100 million to be the one to stand at the helm and steer the American carmaker to dominance once again.
“This is modern man’s version of war,” said Akerson, a U.S. Naval Academy graduate with a bachelor’s degree in engineering. “We must win. You can’t go home at 5 and check out. And that was the culture here.”
In order to win, Akerson, who took control of GM Sept. 1 and became its board chairman Jan. 1, is pressing to make GM leaner and faster on its proverbial feet. This includes quickening production and reaction time and changing GM’s corporate culture from the inside out.
Akerson said the new focus is to be on consumers, rivals, and emerging technologies rather than who is on the fast track to the CEO’s office.
“I think we lost the competitive gene here,” Akerson said to the Detroit News, “The competition was to get to this office.”
Meanwhile, he said, “it was the guy across the globe that was picking us clean” – referring to Toyota, which has shown itself to be smarter and leaner.
Today Akerson will have opportunity to expound on these concepts at GM’s first annual shareholders meeting as a new company.
The gathering, which in previous years met in Delaware, will be in Detroit for the first time since 1990, and it would seem Akerson’s talk of “battle plans” to the Detroit News is preparation for continuing the rally for the rebounding company.
Within the last year, GM made a $4.7 billion annual profit, had a then-world record $23.1 billion initial public stock offering, and introduced the first mass-market plug-in electric car – achievements for the most part already in motion before Akerson come on board.
But GM has much yet to overcome. Akerson spoke of the company being yet weighted down by too much complexity that is hard to control, and a waste of time, energy and funds.
“Literally, we have 7,000 more people working on the same amount of work as our competitors,” he said. “We’ve built so much complexity, and I’ll tell you complexity is the hardest thing for a leadership team to manage.”
Akerson said he wants to play Toyota’s strategy back at it, and rely on only two or three global vehicle models – as Toyota does especially well with the Camry and Corolla – to account for the bulk of GM’s sales revenues.
“We have the scale,” Akerson said. “We’re just not pushing it hard enough to get the profitability.”
Other sore spots for GM include Europe – essentially German carmaker Adam Opel – which lost $1.8 billion last year.
Four years ago, GM committed to this Volt Concept. In five year’s time, Akerson said today’s production Volt will be old news with presumably better products having made the first generation more of a distant memory than the concept car is today.
GM also disappointed investors by its heavy use of incentives to lure buyers earlier in the year and its stock price has fallen 21 percent this year. It fell Friday to its lowest intraday price since the IPO: $28.90 a share.
Other equally if not more daunting market challenges include volatile gas prices and unstable global economies. This summer, GM also meets with the United Auto Workers union for contract talks.
On the executive level, some of GM’s talent has jumped ship, and Akerson has otherwise shaken up management by hiring younger engineers with fresh thinking from rivals Hyundai, Honda and Nissan. Yet because the U.S. government has an ownership share in GM, it restricts what it can offer.
Akerson said, “you have to be sitting in here on sales mode” when courting a prospective executive hire.
In addition to the home market, as has been widely published, emerging markets such as China and South America represent new streams of revenue for the increasingly global company.
While GM recently pulled the plug on the Cadillac SRX plug-in project – at least for now – Akerson said he aims to make Cadillac and Chevrolet its global brands.
“There are a couple milestones in my tenure I want to accomplish,” he said, “I want to earn $10 billion a year profit. I want get the U.S. pension fund to fully funded – and we’re making real progress there. I want to make Europe profitable on a sustainable basis.”
For his part, former GM Vice Chairman Bob Lutz vouched for Akerson who has also worked for General Instrument, MCI, Nextel, and XO Communications, describing him as a forceful leader.
“He’s a very hands-on guy. He doesn’t believe in huge books of numbers,” said Lutz, who regularly meets with Akerson.
Lutz said it is actually a plus that Akerson has not been in the auto business “for 30 years, doing the same thing.”
He described Akerson as willing to ask tough questions, encourage debate and upset the status quo. Lutz said GM has long had a top-down management style, not used to acting on gut instinct, and the “boss-worshiping” culture was a challenge for Akerson even as he is now the boss in position to change it from the top down.
“It’s starting to come around. It’s starting to loosen up,” Lutz said of GM’s culture. “I think there is a healthy give and take in the company.”
Akerson (center) rings the opening bell (and the sound of a Camaro SS engine revving) at the New York Stock Exchange, as GM’s common stock begins trading publicly again Thursday, November 18, 2010 in New York.
One of Akerson’s many tasks in the next year or so is recommending his own successor. Will it be someone from within the company or another maverick outsider?
“Whoever comes after me – it’s going to be a more important appointment than mine because he or she will have to carry on a cultural revolution here,” Akerson said. “It’s just like the Communist party in China in the 1960s: There has to be a cultural revolution here.”
We don’t know about you, but we see this as highly relevant to the Volt, if not directly. As it goes for GM, so also will it go for the Volt and related products to come.
As things stand, the company keeps reinforcing its commitment to emerging technology, and not making the same mistakes twice.
GM has revived from bankruptcy yet its management knows it has much to prove, and improve.
If the thorough plowing of the field Akerson is working for goes as planned, then the environment the Volt was born into will be all the more fertile for it and its platform descendants to grow.
UPDATE: We considered making this a story, but decided to tack it onto this story. It’s a bit dry, but here is the CEO speaking today on the topics above.
On stage, GM Corporate Officers from left to right: Mary Barra, GM Senior Vice President, Global Product Development; Dan Ammann, GM Senior Vice President & Chief Financial Officer; Steve Girsky, Vice Chairman, Corporate Strategy, Business Development, Global Product Planning, and Global Purchasing and Supply Chain; Mike Millikin, GM Senior Vice President and General Counsel; Anne Larin, Corporate Secretary; Dan Akerson, Chairman and CEO.
Source: The Detroit News
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