Why GM Should Hire Alan Mulally

Ken Elias
by Ken Elias

Alan Mulally should be named Chairman and CEO of General Motors…immediately. The General needs talented executive leadership with experience in the automotive industry. And if you look at the track record so far of GM’s present top management – Lt. Dan and his sidekick Girsky – there’s no reason to believe they’ll do any better tomorrow.

Let’s call this the way we see it – Alan Mulally is more talented than anyone else running an auto company today. He comes from an industrial production background, he’s an engineer by training, and knows in his heart that product supremacy wins sales. And let’s keep in mind that Ford was a basket case when he took the reins. Today, it’s net cash positive, its corporate credit rating will move to investment grade within a year, and the cars and trucks are industry-leading, not me-too followers. This is a result from a guy that has had two jobs proving that he can run complex industrial companies successfully (Boeing Commercial Airplane and Ford). And GM needs him desperately.

I’m not here to bash Dan Akerson. Others have already done that. Maybe he’s the right guy to run a telecom company. The real question is – and one US Taxpayers should ask – don’t we want the best guy (or gal) possible running the largest industrial beneficiary of our funds? We still own 32% of this company – and need the stock price to be at least $54 to come out whole. At today’s price of $31 share, that’s a lot of ground to cover. Ask yourself this – can Dan Akerson achieve the results needed or is there someone better? Duh…the answer is….Alan!

So here’s the pitch. First, Alan’s departure from Ford wouldn’t decimate that company. The plan is already in place for the next five years of future products. The groundwork is done – everyone knows the plan. The only questions remaining for the company are: 1) Can Ford succeed in Asia; and 2) Can (or should) Lincoln be resurrected? We just don’t know who could replace him – and another outsider might be the best choice to keep the company from backsliding into endless turf battles. To the point though, Ford is in good enough shape today that a new CEO already has a good roadmap from the start.

Second, there’s no such thing as industrial secrets in Detroit – everyone has a view (mostly) into what everyone else is doing. So Alan would bring the industrial secrets with him to GM but so what? Where Ford has been successful to date is well communicated – and that’s its EcoBoost strategy combined with global platforms (where possible). Continued leadership in NAFTA light trucks with its own diesels in the heavy duty models (and maybe in the F-150 soon). Layer on top of that advances in electronic wizardry and there you have the future of Ford’s products. Would his knowledge of Ford’s future strategies benefit GM? I doubt it. GM has a different set of problems, a larger and somewhat disjointed global footprint, and no real discernible or differentiating product strategy (at least in North America). Building 120,000 Chevy Volts (and Opel Amperas) per year, if even possible, isn’t a strategy.

Third, it’s time to realize that Ford and GM are US companies with a depository of industrial talent and know-how that should be nourished and cultivated. The real battle isn’t between these two Detroit companies as in the past (Chrysler was always a third-place player with no global presence) but against the Germans, the Japanese, and now the Koreans. Eventually, everyone will be competing against the Chinese too (but that’s a way off). It’s important that the US have two leading companies in automotive – especially given that there is an explosion of new technology (engines, electrification, materials, safety, electronics, emissions, etc.) coming. This is a worldwide battle for dominance – not a regional play – and that takes scale and reinvested profits to play the game. Ford’s got the profits but GM is still finding its way everywhere but in China. Alan’s leadership at GM will make it the global automotive powerhouse it should be – and help secure for the USA the intellectual property, the talent, and the industrial base needed to keep the USA in the game.

And last, the Government needs to exit its ownership of GM promptly and at least on a breakeven basis. To get to the finish line, you go with your best horse and jockey. The bankruptcy of GM fixed most of the ailments of the old horse – and that was its crushing debt load, its retiree benefits, and superfluous brands and factories, and its uncompetitive labor costs. But what hasn’t been yet fixed at GM is the problem of real leadership from the corner office. GM’s Board needs to hire Alan to the job.


Everyone wants GM and Ford to succeed. We want these two companies to battle it out for dominance of the US market – and carry the flag of American innovation and brilliance to the other corners of the globe. (Chrysler in third place – still – keeps everything interesting though.) But to get there, GM needs Alan Mulally.

Ken Elias
Ken Elias

More by Ken Elias

Comments
Join the conversation
3 of 69 comments
  • Doctor olds Doctor olds on Jul 13, 2011

    Mullally may be a great leader, but he is not the super hero some seem to imagine. Ford has a very large number of others who can share the "glory". GM, while our government still owns a stake, could not compensate Mullally nearly enough to attract him, even if they wanted to. Besides, General Motors is actually doing quite well from profit and sales volume perspectives. Just for the record: GM made nearly as much just in North America (around $5.7B) as Ford made globally last year (around $6.2B). Losses in Europe (around $1.6B) dragged GM's net outside North America to a $0.5B loss, or thereabouts. GM Europe is projected to break even this year and be profitable next year. GM appears quite likely to surpass Ford's profit this year, if these projections come to pass. GM is also very much larger than Ford and gaining share, selling hundreds of thousands more in America in 2011, year to date and well over 3 million more vehicles world wide last year. GM is on track to regain the #1 rank globally in 2011, projected to outsell second place VW Group by over 1,000,000 and Toyota by 2,000,000. I share concerns about GM losing its focus on product excellence again, but it is far too early to tell if that will come to pass.

    • Z71_Silvy Z71_Silvy on Jul 13, 2011
      Mullally may be a great leader, but he is not the super hero some seem to imagine. Be gone with you devil man! How dare you speak the truth about Saint Al??? TTAC will soon be removing your comment...
  • Andyjwagner Andyjwagner on Jul 15, 2011

    GM? No, we need Alan in the White House.

  • Kwik_Shift Hyunkia'sis doing what they do best...subverting expectations of quality.
  • MaintenanceCosts People who don't use the parking brake when they walk away from the car deserve to have the car roll into a river.
  • 3-On-The-Tree I’m sure they are good vehicles but you can’t base that on who is buying them. Land Rovers, Bentley’ are bought by Robin Leaches’s “The Rich and Famous” but they have terrible reliability.
  • SCE to AUX The fix sounds like a bandaid. Kia's not going to address the defective shaft assemblies because it's hard and expensive - not cool.
  • Analoggrotto I am sick and tired of every little Hyundai Kia Genesis flaw being blown out of proportion. Why doesn't TTAC talk about the Tundra iForce Max problems, Toyota V35A engine problems or the Lexus 500H Hybrid problems? Here's why: education. Most of America is illiterate, as are the people who bash Hyundai Kia Genesis. Surveys conducted by credible sources have observed a high concentration of Hyundai Kia Genesis models at elite ivy league universities, you know those places where students earn degrees which earn more than $100K per year? Get with the program TTAC.
Next