By on May 1, 2013

We don’t get enough good questions from the readers, and it’s a damn shame. Reader Steve Hofer sent us a great one via email; what if Elon Musk was running General Motors?

I was thinking about how Steve Jobs came from what was essentially a failed company with NeXT, to raise Apple from the dead. I imagined the possibility that GM would take over Tesla. Thinking of the Apple precedent, I imagined what if Elon Musk pulled a Steve Jobs and leveraged a board seat into effective control of the company. Assuming Elon became GM’s CEO, does he have what it takes to do a good job? Perhaps he does. I have some reasons.

(1) Elon is smarter than anyone at GM.

(2) He understands how to put together a critical path to implement very complex tasks, whether building an electric car or a private space program.

(3) He is not risk adverse.

(4) He is not tied to 19th or 20th century ideas.

(5) More traditional choices failed and will likely fail again.

Personally, I am not willing to take the Thomas Friedman-esque leap of logic that posits that a successful tech entrpeneur should be put in charge of America’s auto industry. Tesla and GM are as different as two car companies could possibly be, and who is to say that there isn’t somebody at GM that has an equally formidable intellect as Musk does. We don’t know for sure one way or another. In any case, there are plenty of commenters who have actually spent time working with (or for) GM who have a much better insight than I do. Have at it.

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44 Comments on “QOTD: Should Elon Musk Run The Show At GM?...”


  • avatar
    Lie2me

    How would he get that job? Would the President appoint him?

  • avatar

    I don’t agree with TESLA’S vision of completely Electric powered vehicles. I feel EV are cool, but having a gas backup is important to quell the naysayers who feel they need to be able to drive 160 miles plus on a whim.

    The Fisker Karma could have succeeded if they’d built it large enough for a person up-to-my size to fit in comfortably instead of making it smaller than a Nissan GT-R. It was completely impractical, but the gas backup/ electric plug in made it more effective than the Model S in long range use.

    I’d like to see Model S available with OPTIONAL fossil-fuel generator modules (that fit in the front bay) based on the cheapest fuel available in the area. Some people could choose Natural Gas, others could choose diesel or gasoline.
    #1 a generator doesn’t cost that much money
    #2 it would effectively make the Model S a more “regular car”.
    #3 it would shut up the “range anxiety” naysayers.

    But Musk would never let that happen.

    TESLA also depends on steady interest in its $65,000 Model S until the Model X is released. But #1 how many people can afford these things or have a place to charge them? #2 How long can just 2 models keep your business profitable?

    Without government subsidies how far could Fisker or Tesla have gotten?

    And now they are facing a China determined to mass produce EV. Since they basically own America’s manufacturing base and control more of our trade than we do, who’s to stop them?

    • 0 avatar

      The Chinese can do a great job making things, but they don’t know product development at all. That’s why I’m not afraid of them. Elon Musk’s huge strength is that he knows product development, or at least had enough sense to hire people who do. Nobody who has driven Model S says the product is less than brilliant.

      I’ll bet Tesla is selling more cars than that BYD abomination, even though the cheapest Tesla costs at least 50% more than the BYD.

      Tesla is successful because the all-electric car has huge advantages if you set aside the range issue. Most drivers can. I would have no trouble having a long-range Model S as the only car I own, since I never drive more than 200 miles in a day. The majority of people live in two driver households and there is no reason to not use the gas engined car for road trips and the electric for commuting. If you add an engine back, you’re adding a lot of weight and eliminating many of the advantages that make the electric so appealing.

      The $65,000 Model S is comparable to the similarly priced Mercedes or BMW model. There is no premium price for electric power. That strikes me as a huge breakthrough – if you added the cost of an internal combustion engine it would be much more expensive and have much poorer performance.

      I think Tesla has said the government loan sped up its development plans but was not needed to actually execute them long-term. Fisker probably would have gotten the Karma to market without the government money, too. There was a WSJ article a few days ago that said the government loan forced Fisker to think bigger before it was ready, thus destroying the company. I think Fisker was doomed from the start simply because the Karma was never a good car, and so its reputation was not good enough to expand their range. This has never been a problem with Tesla – word of mouth on the Roadsters was always great and that made it possible to continue with Model S.

      So in the end, the government money may not have helped much. I think Tesla was the only company where it made a significant difference to a product that’s successful in the marketplace.

      D

      • 0 avatar
        Onus

        I think the Chinese will surprise us in the future.

        Product development isn’t there because there is no need. Chinese people don’t yet care about safety. I think they are just happy to own a car. Something unachievable to the generations prior.

        They can develop technology if they choose too. When they decide too we need to watch out.

      • 0 avatar
        Luke42

        I spent the first 10 yeas of my career in academia, supporting computers used by science and engineering.

        Given the number of smart and hard-working Chinese graduate students that we sent home due to our immigration policies, they’ll be doing just fine in terms of product development.

        We really should have given every one of them green cards upon completion of their degree, in the hope that they’ll stay here and work for us…

    • 0 avatar
      Thinkin...

      “#1 how many people have a place to charge them?”

      Pretty sure most people in the US have access to electricity and parking. In fact, many even have driveways and/or garages adjacent to their house!

      • 0 avatar
        bjchase55

        If only everyone lived in a house. I may have access to electricity and parking, but they are not next to each other. Even if I were allowed to run a very long extension cord it would be standard 110V. I live in those things called an apartment.

      • 0 avatar
        probert

        They’re selling all they manufacture so I think the business plan is working.

    • 0 avatar
      Kyree S. Williams

      As far as the Chinese go, product development just isn’t there *yet*. They’ve gotten very good at emulating svelte European cars on the design/feature-content front, but they usually miss all of the details driving-wise, due to hasty and half-baked engineering…and in the world of EVs, those little details really matter…

  • avatar

    I was something of a skeptic about Elon Musk taking over at Tesla because I admired Martin Eberhard tremendously for doing a great job at being the face of Tesla in the beginning. I agreed with Martin that refining the Roadster was the best business model for the company, and not some pie in the sky, unachievable goal of creating a genuinely mainstream electric car. And I didn’t like the way Musk fired Eberhard at all.

    That being said, I’m a convert. Rather obviously, Elon Musk knew what he was doing, and if he had followed my advice the company would have been in bankruptcy. Instead, it’s doing brilliantly, because Musk really knew how to get a car designed. It was probably a “hire the best people and get out of their way” approach, and it worked brilliantly.

    I hope Martin kept his Tesla shares because they would be making him fabulously rich if he kept them :).

    So is Musk a brilliant manager in pulling this off where other intelligent people (Fisker, Tucker, etc) failed miserably? I would say yes.

    But could he save GM? I would say no way. Why? His “hire the best people” strategy works when there is a small team united behind a common goal. It’s like Heinlein’s classic story “The Man Who Sold the Moon”. The manager there was able to get to the moon because his company had no bureaucracy and thus had no inertia. It went where management pointed it, like Tesla. I actually think of Heinlein’s hero as being very similar to Musk. He was sometimes unscrupulous in stretching his shoestring budget, but he got us to the moon/Tesla/etc.

    GM is the ultimate bureaucratic system. It’s very difficult to get it to go where pointed. There was a recent book, whose title I forgot, describing how Alan Mutally, an undeniably brilliant manager, did it at Ford. He was able to turn around Ford because he was comfortable with bureaucratic companies and knew what a competently functioning one was like. GM needs an Alan Mutally, not an Elon Musk.

    Frankly, I don’t think Musk would want the top job at GM, and if he was offered it I would urge him to turn it down. Not that there’s any risk of his NOT taking my advice – he has Tesla and SpaceX to nurture and I think he derives immense satisfaction from running them. A GM takeover of Tesla would cause rampant bureaucracy to destroy the company. I think Musk knows this.

    • 0 avatar

      All the Model S really is, is a big car that goes REALLY FAST. Big cars are options to crossovers and SUV. These things sell really well to rich people living in warm climates with strict emission laws, but they are a very difficult sell just about everywhere else.

      They are selling very well now, but the future of EV still depends on the improvement of America’s infrastructure, the improvement of battery technology and the PREVENTION of cheap, Chinese EV clones from making it here.

      • 0 avatar

        I don’t think strict emission laws have anything to do with it, since all cars available today pass emissions.

        Buying a Model S takes (1) lots of money and (2) a love of technological innovation. Oddly enough, I don’t think (3) a desire to save the planet is as much of a motivation for these buyers, but in any event these characteristics are disproportionately common in Silicon Valley and I would bet about half their sales are there.

        Model S has sold in cold climates and real-world cold climate buyers love their cars too. Personally I don’t understand why cold climate areas have a population left, but if people insist on being masochistic I’m not going to complain :).

        D

    • 0 avatar
      Dirk Stigler

      This. GM’s problem is and ever has been its freakishly powerful corporate culture that successfully resists any and all outside input and not-invented-here ideas. The entire company went broke and was only rescued by a massive and unpopular government bailout just five years ago, yet the product mix is already trending back to the bad old days of FWD Cadillacs and half-assed badge engineering, with the declining market share covered up by channel stuffing. Elon Musk is an outsider with a portfolio of not-invented-here ideas, no matter how well proven at Tesla. He would be no more able to fix GM than anyone else has been.

      The tragedy of all this is that there are a lot of talented engineers, designers and factory labor at GM who deserve better. It should be obvious to everyone by now that they’ll never get it as long as RenCen exists.

  • avatar
    rmwill

    +1 Dennis

    Its a totally different set of competencies that are needed to run a huge firm like GM. Musk’s strength is leading early stage smaller innovators, and not risk averse bureaucracies.

  • avatar
    Boxerman

    I would just love to be the Tesla agent for China, or even the Sahnghai dealer. Its the perfect car for there. Size is a very vaued comodity in China. Tesla has it, no one in China is going more than 200 mi in a day if even half that.

    The government sees air polution as the No1 issue that ggravates most of the populace, they would have no problemlimiting license plates for gas powered car and granting more to Tslas. They would also have no problem mandating and building charging infrastructure. The problem would be producing enough cars, but then you could do that in China.

    It mazes me Tesla has no dealer there already.

  • avatar
    EquipmentJunkie

    No way. Musk strikes me as a 50/50 mix of Professor Harold Hill and President Bill Clinton.

    While Musk may be better than Ackerson, I don’t see him as being grounded in the realities of running a corporation the size and complexity of GM. Whenever, the boardroom atmosphere would get a bit tense, I could see Musk begin to sing the University of Michigan fight song and get the room whipped into a froth while he quietly exits the room.

  • avatar
    danio3834

    He’s got charisma, and he can sell ideas, but Tesla isn’t out of the woods yet. I get the feeling many are already trying to make Musk out to be the Steve Jobs of automobiles, which is certainly premature.

    That being said, GM is a different animal than Tesla. I don’t think he’d last 20 minutes before being ousted, assuming he could even make it in the door.

    Musk would find more success in trying to turn Tesla into the next GM than turning GM into anything else.

  • avatar
    sirwired

    I think it’s a horrible idea. None of the things involved in running a small engineering-driven company apply to one of the largest manufacturing companies in the world. GM’s primary “job” does not, in fact, revolve around automobile engineering (thought it certainly is important.) Their most important tasks involve logistics, localization, economic forecasting, dealer relations, marketing etc.

    A CEO that throws a temper tantrum for a single bad review in the New York Times is not quite suited to be running GM.

    • 0 avatar
      probert

      I agree that he’s not the man for GM – no grey flannel there – but you under estimate him. In addition to Tesla he’s got space X and solar city. A remarkable man putting his substantial money where his substantial mouth is.

  • avatar
    photog02

    GM needs someone from big (i.e., complex) manufacturing. Understanding the impacts of global suppliers, manufacturing sites, and all the associated regulatory and financial burdens is a bit more than a start-up wizard (or telecom CEO) can manage unless there is some proof of prior performance.

  • avatar
    jz78817

    What, since Steve Jobs died we have to find another “messiah” to save GM?

    It wouldn’t work. Tesla’s success has been almost entirely because they are NOT as big as GM and don’t have the legacy concerns.

    Musk is a “start-up” guy. Akerson is the wrong person for the job but then again Musk would be too.

    • 0 avatar
      Dan

      Credit for Tesla’s success is in large part due to being in the right place at the right time. First they cashed in on federal green handouts to build their product just in time to cash in on federal banker handouts selling them.

      BMW just had its best year, ever. Mercedes just had its best year, ever. JLR just had it’s best year, ever. Hermes just had it’s best year, ever. Ad nauseum.

      These are awfully good times for the people selling things that douchebags buy.

      • 0 avatar
        Domestic Hearse

        Thank goodness for douchebags and the things they buy.

        Because once upon a time, airbags were only for douchebags. Soon after this technology was introduced, this safety feature trickled down to the rest of us.

        Stability control. Anti-lock brakes. Brake force distribution. Navigation. All douchebaggery at one time, and now standard on Ye Regular Family Vehicle of all types.

        Such is the curve with all technology and manufacturing. We, the proletariat, benefit from the deep pockets of the early adopters. We, the proletariat, get to be the people who build and design such products – jobs which keep us clothed, fed and housed.

        We also get to chafe a bit that we, ourselves, are not also douchebags and tooling around in the latest BMW M3. (No worries. We can buy it used with over half its usable life still available and still enjoy it nonetheless.)

        • 0 avatar
          shaker

          I’m sure that there are “commoners” out there who buy BMW’s that “douchebags” have wrung out pretty thoroughly – and the commoner suffers mightily for it.
          The legendary depreciation of vehicles preferred by “douchebags” is established by the original owners and the manufacturers as a sort of “gentleman’s agreement”, and the off-lease, out of warranty proletariat buyer is the biggest sucker of all, but supports a huge mechanic/part supplier network that vacuums up the commoner’s cash and re-distributes it in the world economy.

          Ahh, aspirations.

          (This comment was meant as entirely speculative and mildly humorous).

        • 0 avatar
          SoCalMikester

          And all the fancy battery and charging technology eventually trickles down to cellphones and laptops

  • avatar
    DC Bruce

    I think we’ve already seen this movie and its title is “Electronic Data Systems.” EDS was founded and built by an extremely successful entrepreneur named H. Ross Perot. Of course, being from Texas, having big floppy ears and a thick Texas drawl automatically disqualifies Perot from membership in the Silicon Valley Cool Klub.

    That said, he and Musk aren’t that different. GM bought Perot’s company, EDS (subsequently sold to someone else) and part of the deal included putting Perot on the Board. Perot did the equivalent of breaking wind in church at every meeting (in the eyes of GM regulars) and eventually, Perot resigned in frustration and decided to run for President in 1992. Perot probably was successful in siphoning enough votes from Bush 41 to get Bill Clinton elected. More importantly, after a lot of government spending during the Regan years and Bush 41′s indifferent leadership on that front his first term, including his famous flip-flop on taxes, Perot mobilized a constituency for fiscal discipline. Thus, Bill Clinton got his tax increases during his first term, but not his spending projects. The rest of Clinton’s term turned out well economically.

    So, H. Ross Perot, having failed to move GM, actually did move the country . . . which says something about GM.

    • 0 avatar
      danio3834

      Best response yet. The Perot story is an interesting one.

    • 0 avatar
      EquipmentJunkie

      Excellent parallel with Perot & Musk. I agree with you.

    • 0 avatar
      juicy sushi

      I have to agree as well. This is an excellent post.

      My other question would relate to Musk’s temperment. In social media and the press he comes across as a bit combative. I don’t know if that would help drive change at GM. Does anyone know what Musk’s like to work with first hand?

    • 0 avatar
      Darkhorse

      Perot ended up as the largest single shareholder in GM after the merger. He wanted to be CEO and made no secret of his ambitions. Roger Smith finally had enpugh, and got GM’s board to buy out Perot for more than $750 million and eased him out the door.

  • avatar
    PrincipalDan

    (1) Elon is smarter than anyone at GM. – That is the most backhanded compliment I have heard in quite a long time.

    Musk? My first reaction? “No.” But given the general failure of everyone else who has tried to run GM, why not?

  • avatar
    Domestic Hearse

    Tesla is a one trick pony out of necessity. It’s trying to carve out a new niche — a new technology, a new transportation philosophy. It has to, as there’s no point in building another Prius or Volt. There’s no way a tech start-up like Tesla is going to win a war against GM or Toyota.

    But what Musk is doing at Tesla is moving the goalposts waaaaaaaay down the field. If the market moves at all in Tesla’s direction, they’re in a leadership position. If the future turns out to be hydrogen, oops. Or if e-cars never catch on or battery technology cannot become more practical/cheaper, oops.

    That’s what Musk does…moves the goalposts for industry. Has the “vision” thing. And yes, has the brain bandwidth to actually understand the technology/complexity issues (ahem, Mr Akerson? are you listening?).

    Can he dial himself back and say, have a vision for the next ICE Malibu? Is he able to do mundane, in other words?

    Not the right question: Can his thinking lift all boats? Will his approach filter down to all levels? If so, this is a good thing.

    I think if I were on the BoD, I’d be willing to find out (though the current board of rubber stamping professional cronies will never take a chance of not appointing one of their own, lest they all be exposed as do-nothing bystanders).

  • avatar
    Dimwit

    The only way that Musk go do any good at GM was if he had the power to shoot any offender. Only then would he be able to prune and manage the catastrophe that is GM. It’s metasized, arcane and every bit of the corporate structure is filled with ego and CYA. It *can’t* change.

  • avatar
    Conslaw

    There appear to be multiple questions subsumed in this hypothetical. Would he? Should he? Could he?
    I don’t think he would want to. I think his heart is more in Space-X than anything else. Should he? I’m not sure from which point of view you answer that question. Could he? I think perhaps he could. I don’t think it is fair to call him a one trick pony. Bill Gates was just a software guy until he retired to run his foundation with his wife Melinda. Together they have created a very effective charity on a global scale. Musk would not run GM all by himself, nor would any other CEO. I think Musk would be able to put smart, directed people in key roles, implement a better decision-making structure. I think he has some of the same strengths as Roger Penske, who was rumored to take over GM repeatedly.

  • avatar
    CalgaryGuy

    Jobs didn’t get the job at Apple until:
    1. Jobs had proven himself as a turn-around expert by purchasing and reinvigorating Pixar (remember his “Toy Story” movies?). He wasn’t just a brilliant entrepreneur.
    2. Jobs had the technology Apple needed to replace its failing operating system. Jobs, as is well known, brought Apple the foundations for OSX (that saved the Macintosh) and eventually iOS (iPhone, etc.). What technology can Tesla bring to GM that Musk hasn’t already sold to Toyota?
    3. Apple leadership knew their situation was desperate. But GM is “too big to fail”.

    So Jobs had a resume, resources and fear on his side. Musk as GM CEO doesn’t have those advantages.

  • avatar
    CelticPete

    Huh? GMs balance sheet is awesome compared to Teslas. He is smarter then anyone at GM? Seriously? We rate intelligence on the ability to fleece tax payer dollars for dubious automotive ventures?

  • avatar
    GiddyHitch

    Elon Musk clearly doesn’t have the experience nor tools to run a big multinational like GM. The people best equipped to run GM are already at GM. They should promote from within. Then again, this may be the definition of insanity.

  • avatar
    CelticPete

    Tesla has been in the red every year. GM makes a modest profit. I don’t see the logic behind thinking Musk is a superior CEO. I guess he deserves some credit for keeping the company alive despite the negative balance sheets.

    • 0 avatar
      probert

      Tesla just had a profitable quarter. Not bad for a new company opening a new factory and employing hundreds during a great recession. Not too shabby. Also the stock has more than doubled over the past 12 months — I can now afford a set of tires and 2 hubcaps. Life is good.

    • 0 avatar
      corntrollio

      Tesla is saying that they will have a Q1 profit. I haven’t seen the numbers.

      Also, Musk runs other businesses too. Maybe you’ve never heard of Zip2, unless you were in the tech industry, but you’ve probably heard of a little company called Paypal. If you follow what happens in the aeronautics industry, you also may have heard of SpaceX, which has produced a spacecraft that docked with the ISS last year.

      Whether his success in start-ups means that he could handle a Fortune 500 company with a lot of institutional history and a strong labor union, I don’t know. However, he probably understand the kind of investment one needs to make when developing new platforms.

  • avatar
    NMGOM

    Absolutely not. He is too valuable to be distracted by something as messy and trivial as GM. We need Musk to finish conquering space commercially, and than start working on the Martian colony.

    ——————–


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