Daniel Akerson, CEO of General Motors Co., is struggling to lead the transformation of GM. Akerson, who fired GM’s chief marketing officer two weeks ago, has shaken up the company by recruiting outsiders, promoting unexpected candidates to top posts and making it clear — often in blunt language — that the “new” GM must be faster, more entrepreneurial and profitable.
Akerson is reportedly on the verge of restructuring GM (GM) to quash its famed “fiefdoms” and eradicate operational “silos.” But the more the pugnacious former naval officer pushes, the more the company seems to find itself in the spotlight explaining missteps, such as the $559 million agreement between GM and the Manchester United soccer team that allegedly led to the Joel Ewanick’s ouster as chief marketer. Akerson berated GM employees in an internal call for leaking information to the media — and, in short order, the contents of the call leaked.
David Cole, chairman emeritus for the Center for Automotive Research in Ann Arbor, Michigan, says Akerson “is still learning the automobile business. Most outsiders don’t realize how complex it is compared to almost every other [business].” Cole says Akerson, who had little in his background that prepared him to lead an automaker, showed his inexperience when he made public sales forecasts for the Chevrolet Volt that didn’t come close to being fulfilled.
Automaking’s complexity wasn’t lost on Ford Motor Co.’s (F) Alan Mulally, CEO of GM’s crosstown rival. Mulally had run Boeing (BA), which operates on long lead times for the design and manufacture of jetliners, contends with labor unions and must make its products amenable to global tastes as it markets to airlines the world over. Significantly, aside from selling off brands such as Volvo, he hasn’t formally restructured Ford in his six years since taking over.
Like Akerson, Mulally sees his role as leading the modernization of a Detroit-based automaker, perhaps more as a coach than as an admiral. Mulally’s style is in stark contrast to Akerson’s. Unlike Akerson, he speaks only positively about his company, its vehicles and personnel — at least publicly. He smiles. Constantly. And, he takes time to sign autographs, chat with, or have pictures taken with fans.
Mulally’s Ford strategy is simple: “One Ford.” In other words, he’s directed employees to stop internal rivalries and bickering. Teamwork trumps factionalism in the Mulally world order. Management by fear is likewise discouraged. Executives and managers who can’t embrace Mulally’s strategy have left Ford, but never under the cloud of an official statement such as issued by GM when Ewanick left, stating that he “failed to meet the expectations” of GM.
Ford and Mulally were extremely lucky, of course. He was able to mortgage the company to the hilt — even tossing in its Blue Oval logo as collateral — just before the credit markets fell apart. That allowed Ford to stay out of bankruptcy and void the major shocks that Chrysler and GM have both faced. Akerson had none of these advantages.
Akerson has said he regards fixing GM as a “patriotic” duty, rather than a facet of a business career that already has brought him wealth, notably in his role at the Carlyle Group public equity firm. Clearly he’s trying earnestly to make a good impression on Motor City. He has announced several personal donations to Detroit-area charitable causes, such as the $1 million to the Cornerstone charter school. Last week he said he would auction off his prized 1958 Corvette, the proceeds to benefit Habitat for Humanity.
A former GM executive observed that the GM work force is proud. Many GMers are the same ones who created the highly rated vehicle models that are now reaching the marketplace and responsible for the automaker’s nearly $8 billion in net income over the last five quarters. “A lot of people have pride in what they’ve done at GM, in the century of culture,” said the former executive. “It’s not going to work to come in and suggest that everything they’ve done is dog meat.”