By on January 23, 2013

GM’s North American president, Mark Reuss, was in the running as CEO in 2010, but was passed-over for an alleged “lack of seasoning,” says Reuters after reading an upcoming book by GM’s former CEO, Ed Whitacre. Instead of Reuss, who had shown that he knows what he is doing, a completely unseasoned Dan Akerson was put at the helm of GM.

According to the book, Whitacre recommended Reuss as his replacement when Whitacre stepped down after the bailout. Whitacre writes:

“Mark had zoomed up the executive chain in record time; he went from midlevel engineer to the No. 2 person in the company in the space of a year, more or less. The plus was that Mark was showing a lot of poise and management potential. The downside was that he hadn’t been in the job long enough to prove himself as a CEO.”

“One thing everybody agreed on: Mark had a lot of potential. The only concern was his short time in the job. If we asked him to step into the CEO’s job, and it didn’t work out, that would be a disaster for Mark – and an even bigger disaster for GM. The company needed stability. The revolving door in the CEO’s suite had to stop. At this point Dan Akerson volunteered to do the job.”

Akerson likes to promote the storyline that he had been drafted into running GM, and that it was “a call to service.” Just the opposite is true, writes Whitacre:

“Akerson wanted to be chairman and CEO from day one. When Dan put his hand up, that took care of the problem. Not very elegant, I will admit. But that’s how it played out.”

64 year old Akerson does not want to talk about retirement. Many hope, some demand that he would.

Along with Reuss, Chief Financial Officer Dan Ammann, global product development chief Mary Barra, and, god help GM, Vice Chairman Steve Girsky are being discussed as possible replacements.

Running a car company is a highly complex matter, it probably is one of the most demanding jobs on earth. Successful CEOs, such as Akio Toyoda, Carlos Ghosn, or Ferdinand Piech all know what it takes to build a car and how to run a car company. Akerson is still learning, and GM does not need an apprentice on top.

Whitacre’s book, “American Turnaround: Reinventing AT&T and GM and the Way We Do Business in the USA,” will be published Feb. 5 by Business Plus books.

Get the latest TTAC e-Newsletter!

21 Comments on “Whitacre’s Book Reveals Secret Of Unseasoned GM CEOs...”


  • avatar
    Commando

    I have a recurring dream that there will someday be another RWD Coupe deVille and reading that book would kill the last ounce of hope of that fantasy actually come true.

    • 0 avatar
      Lorenzo

      There WILL be another Coupe de Ville, because they’ll eventually run out of letter combinations and have to go back to using names, primarily the ones they still “own”. Whether it will be RWD, or anything you would want to buy for that matter, is the real question.

  • avatar
    gslippy

    “The revolving door in the CEO’s suite had to stop.”

    Whitacre’s right on this point. Dan Akerson may be learning some things as he goes, but I’ll argue that what GM doesn’t need is to restart the revolving CEO door. That instability is very bad for morale, motivation, and stock price.

    But I do think the decision to proceed with the Cadillac ELR is nutty.

  • avatar
    Dynasty

    It probably is a lot more complex job than most people would give credit for.

    But I would recommend that Dan make as part of all the executives and bean counters job duty is to start driving their competition’s vehicles and ensure that GM uses its immense talent that it has at its disposal to make vehicles that are better in every way to the competition.

    But better and not in a cloning sort of way. They are literally 80% there. They just need another 30%.

  • avatar
    wmba

    “The revolving door in the CEO’s suite had to stop”. That’s a laugh.

    Wagoner had been CEO since 2000 and Whitacre for 18 months or so – hardly revolving doors except for Whitacre himself! This bighead was a disaster himself in not selling Opel to Magna, and in pissing off Chancellor Merkel.

    Magicians operate by diverting attention from what they’re actually doing – misdirection. Apparently, big time ego tripper executives like Whitacre operate the same way.

    He also steps up to say Reuss almost made it to CEO, just in case Akerson turns out to be an utter dud. That way, history will nod its head wisely and say, Whitacre thought Reuss was AOK, remember?

    Yup, Whitacre is polishing his medals and positioning himself as some kind of elder statesman, above the fray and proletarian riff-raff.

    I thought he stunk myself.

  • avatar
    wmba

    Edit.

    Forgot about poor old Fritz Henderson being CEO for a couple of months and being undermined by Whitacre who made himself CEO just to make things “right”. I guess that’s the revolving door, with Whitacre as puppet master.

  • avatar
    cargogh

    Switching CEOs often would be like changing presidents routinely. If you think of the country as a car company, it hasn’t been a real profit turner for a while.

    • 0 avatar
      redav

      Such a revolving door only matters if it causes changes. I work for a large company that has re-organized us so many times in the last few years we honestly have no idea how the pieces fit together anymore.

      But none of that affects our day-to-day operations. We still go out and win contracts and build equipment just as before because the names on the emails and the ‘values’ on the propaganda posters don’t change our customers’ needs or the capabilities of the machines in our shops.

  • avatar
    areader

    From various WSJ articles of the time, it was apparent that Akerson invited himself to the GM board and maneuvered to become CEO. I agree with Whitacre that Reuss wasn’t ready, or rather hadn’t proven that he was ready. But were alternatives other than Akerson sought? Maybe the book goes into this. It seemed to me that the problem at GM wasn’t so much revolving CEOs as it was the process of annoiting someone early in their career at GM as a “comer” and then advancing them rapidly through the organization without keeping them in positions long enough to test their ability. The most important quality of a manager is their skill at selecting people, and advancing people rapidly does not allow them to be tested in this area. As it usually does, it’ll come down to the board which should be continually evaluating the top execs and pushing Akerson out if/when he shows he’s not up to the task, and having identified a successor who is. Akerson seems quick to become convinced of the great talent of various females; if the choice will be his, we can only hope he’ll be right. I don’t see him going on his own accord any time soon.

    • 0 avatar
      ABankThatMakesCars

      You just described Red Ink Rick Wagoner.

      “We’re doing the right things. Everyone is working hard. We still have a lot of work to do.”

      When Rickie would say that crap I wanted to punch someone.

  • avatar

    remember the last CEO who was “fast tracked”? Red Ink Rick was promoted to CFO at age 39, in front of many others more capable and tenured. and this without even an accounting degree!

    GM needs to be run by a separate Chairman and CEO. it’s too big an operation for one person to do both jobs effectively. even the great Alfred P Sloan Jr knew this and maintained such a structure.

    whoever is next in charge should make their first move to correct a glaring fault. Deloitte must be replaced as auditor. this decades old relationship is the furthest thing from “arm’s length” and they have been on board thru some of business history’s worst accounting performances.

    • 0 avatar
      ABankThatMakesCars

      Yeah get rid of Deloitte. They helped cover up the “errors” in the financial statements. Believe me I know what I’m talking about. Why do you thing the big accounting firms only hire auditors with zero business experience? Because a kid with any experience would raise his hand and shout “hey this doesn’t look right!”. Why would Deloitte notfiy the SEC that GM’s financials are F’ed up and lose one of their biggest clients?

      Remember Enron-Arthur Anderson.

  • avatar
    Detroit-X

    One of the problems of putting a GM-Lifer in the top jobs is that all they know is the GM Way. Executives in GM’s High Potential Fast Trackers experience a life and business combination that is: failure friendly, rationalization friendly, insulated from the real world, low accountability, with Old Boys’ Club debts to pay back, etc. Is there any wonder New GM is still Old GM in many ways?

    • 0 avatar
      redav

      I keep saying it’s all about culture. A company can change its products, reorganize, change ads, etc., but without altering the deep-down culture, they will get the same results. That’s why I’m not convinced that Chrysler or GM won’t find their way back to bankruptcy. In my admittedly limited view, Ford seems to have made real changes, but I find I don’t necessarily like their new direction.

      • 0 avatar
        prthug

        Interestingly, Ford made the changes with substantially the same managment team with the exception of Mulally. While far from perfect, the idea that the GM execs were this mindless band of idiots insulated from the real world is simply wrong. They were a group of executives dealing with a balance sheet and legacy costs that simply could not be sustained. GM in China went from zero to the top of the market based on the plans and strategies of the same guys who had to run the US. They were smart guys. Whitacre pulled up stakes and went back to Texas because he’s a smart man. He figured out in a hurry that the auto business is as brutal and complex an undertaking as anything in business — far tougher than running a cellular phone company in the US — and he knew he was in way over his head. Akerson even more so, but unlike Ed, he’s…well…not so smart and is driven by ego. He’s not going to pull up stakes and move on. So far he’s lost billions in Europe, lost significant marketshare in the US, is essentially giving away Volts at a huge loss because he declared he’d sell 60K a year, pulled ahead GM’s biggest product flub from the previous era, the Maliu…oh, and he’s managed to piss off and alienate the entire GM workforce, the only people who can save the poor man from himself.

    • 0 avatar
      ABankThatMakesCars

      Detroit X – You must have worked there. This is dead-on.

    • 0 avatar
      Detroit-X

      prthug:
      The GM execs themselves created the conditions of GM’s demise. Simple as that. (It wasn’t the fault of the lower levels; even Lutz admitted that in his latest book.) There were several times in the decades leading up to 2008 to implement needed fixes, but the GM execs used all the power of their brain, and didn’t. These execs dismissed all the suggestions of how to fix GM, both from inside and outside the company. If these execs were smart and made dumb decisions, well, it’s still on them. They were all willing to milk this cow till it died. And that’s what they did. As for Akerson, one thing he’s done well is to be willing to fire the slacker GM execs. Reuss could never do that as effectively. And Ford? It’s a different company, and a different culture. Whitacre and Akerson may not have known about that auto business, but generic business basics were/are GM’s first problems to fix.

  • avatar
    NormSV650

    Whitacre says, “We don’t like this label of Government Motors. We know it turns off customers. It turns us off.” Obama said your all but done.

  • avatar
    NN

    Mulally deserves every bit of a mention alongside Ghosn, Piech, Toyoda. Yes, they made the right moves in the past to put their company’s where they are today. Mulally had to make the big moves and decisions much more recently, and the fruit is only starting to bare (Focus best selling car in China, US profitability, maximizing platform investment worldwide, competent products, severe European cuts that should also right-size their organization there). Yes Europe today is still a black eye and so is Lincoln, but both are being worked on now.

    Regarding Akerson; he cooked his own goose when he introduced the half-assed Malibu eco 6 months before the standard Malibu and thought the market wouldn’t punish him for it. That’s a massive financial mistake…it ensured the public would see the car as incompetent until the next redesign. If the Malibu eco were actually a real hybrid that started at $26k and got 40+mpg (i.e. Fusion/Camry hybrids) then the story would be different, it would probably be successful.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India