In 2012, General Motors endured an election-year rehash of its recent past, the departure of its chief marketing officer, an aging product lineup and the worst European economy in more than 20 years.
In the midst of a tumultuous summer, with GM’s stock price stagnating, CEO Dan Akerson, reached into his wallet and invested his personal money to buy half a million dollars in company stock. At the time, it was viewed as a gesture more of faith than wisdom.
Sometimes it pays to be a believer.
Since his mid-year investment, GM shares have risen nearly 50%. Perhaps not the kind of money he made as a driving force at the Carlyle Group, a blue-chip Washington private equity firm, but an improvement that others are starting to notice.
Lacking the swashbuckling candor of Chrysler’s Sergio Marchionne or the “aw shucks” charm of Ford’s Alan Mulally, Akerson is more of an internal change agent. Clarify goals. Establish accountability for reaching them. Then let the products and quarterly financial statements tell the story.
He’d like to avoid the showbiz aspects that are an inescapable part of stirring passion for cars and trucks.
Despite his shunning of the spotlight, Akerson is being highlighted as co-winner of this year’s Free Press Automotive Leadership Award in the executive category, a selection made by a panel of seven independent judges that analyzed nominations in nine categories.
‘We all have to perform’
Based on interviews with insiders, Akerson has established a new attitude at GM anchored in empowerment and accountability.
“He’s approachable and supportive,” said Mary Barra, GM’s senior vice president for global product development. “But at the same time, he expects you to get done what you say you’re going to get done.” In a company where in the past, by many accounts, accountability was sketchy at best, that’s a big switch.
Impatience was an asset in the eyes of GM’s board of directors when faced with an unexpected task of choosing a CEO after former CEO Ed Whitacre resigned in August 2010.
Steve Rattner, who led the Obama administration’s auto task force, told an anecdote about Akerson in his book, “Overhaul,” which recounts the 2009 government-backed restructurings of GM and Chrysler.
“Once he became so impatient with doctors who were treating his gall bladder in a German hospital that he removed the tubes from his arm, checked out and flew back to the U.S.,” Rattner wrote. In an interview, Akerson decried the “committee culture” that once defined the slow-moving company.
Gauging the pace of culture change at General Motors is a parlor game for auto industry observers, but actually measuring how much the company has shed its old bureaucratic skin is not easy.
The word insiders use a lot is “results.” Akerson will not hesitate to reach for outsiders if he thinks that’s the best way to reach a goal.
For example, Akerson raised eyebrows within GM’s fraternity of marketing managers when he promoted Bob Ferguson, a former ATT executive who previously headed GM’s Washington lobbying office, to be Cadillac’s global marketing leader.
It wasn’t exactly a predictable move.
“He’s got the ambition, he’s got the energy, he’s got the initiative. He’ll make it happen,” Akerson said of Ferguson. “And if he doesn’t, there’s accountability in this organization now. We all have to perform.”
Convincing outsiders that change is real is tougher and may not be a top Akerson priority.
“The criticism most people often have is that the New GM looks a lot like the Old GM, particularly in how it functions and how it makes decisions,” said Jeremy Anwyl, CEO of auto research website Edmunds.com. “I’m starting to see signals that Akerson is thinking more about that. Changing corporate cultures is no easy thing, particularly when you’re the size of GM.”
Akerson, a proud Naval Academy graduate, has been at GM’s helm since September 2010 after Whitacre, another outsider, chose to return to his Texas ranch.
The company’s new directors were chosen with the guidance of the Obama administration’s auto task force. Akerson was one of them.
“I didn’t seek this job,” Akerson said. “The board asked me to do it.”
Rattner said the board narrowed the options for Whitacre’s successor to three candidates: Akerson, fellow director Patricia Russo, who had been CEO of Alcatel-Lucent, and GM Vice Chairman Steve Girsky, a former analyst who had led a private equity firm.
Akerson’s private equity background, which focused on turning around troubled companies quickly, weighed heavily in his favor.
Rattner said the board thought Akerson would have even less patience than Whitacre with the old GM ways.At the time, he was barely known to the auto industry. Telecommunications leaders and the respected network of Carlyle partners spoke highly of him, but cracking the insular world of Detroit and the global auto business will test anyone.
Sometimes his distaste for attention creates problems, but there’s no mistaking how his Navy experience guides his management style.
Last summer, he told GM employees in a private meeting that people who leak information to the press were committing “treason.”
Ironically, a recording of his comments was leaked to the press, reflecting the fishbowl nature of the industry.
Barra said Akerson’s discomfort with the cameras underscores his humility.
“I think he likes to showcase his team,” she said.
That team was instructed to stay quiet during the 2012 presidential campaign. While President Barack Obama took credit for rescuing GM, challenger Mitt Romney constantly restated why he agreed or disagreed with the way the government enabled GM to restructure.
“Quite frankly, I didn’t appreciate how difficult it was going to be at times,” Akerson said. “We did withstand really a lot of unwarranted criticism and we did it with as much dignity as I think any organization could have.
“I’m proud of my team on so many levels. We’ve come through it, and I think we’ve got a great ’13 and ’14 coming up.”
The market seems to agree. GM’s stock has posted 52-week highs several times in recent days. Akerson said last week the company will achieve a modest gain in its 2012 U.S. market share of 17.9%. But Europe’s economic downturn will likely get worse before it gets better.
The good news is focused here in the U.S. where GM will update or replace 70% of its vehicles over the next two years. These include redesigns of the Chevrolet Silverado, GMC Sierra, Chevrolet Corvette, Chevrolet Impala and Buick Encore.
The Cadillac ATS compact sedan, which hit showrooms in the third quarter of 2012, is a finalist for North American Car of the Year. Two of three ATS buyers have never before owned a GM product.
With a strong stable of new products, Akerson said GM will regain a modest amount of market share in 2013 in the U.S. after its share hit an 80-year low in 2012.
Akerson said he wants to boost market share, but he called it transitory and said the company would not pile incentives into its vehicles to gain sales.
“I’d rather be No. 1 in profitability,” he said.
Contact Nathan Bomey: 313-223-4743 or firstname.lastname@example.org