The Truth About Cars » Akerson http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 22 Apr 2014 14:37:08 +0000 en-US hourly 1 http://wordpress.org/?v=3.8.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Akerson http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Korean Unions Mad At Akerson http://www.thetruthaboutcars.com/2013/05/korean-unions-mad-at-akerson/ http://www.thetruthaboutcars.com/2013/05/korean-unions-mad-at-akerson/#comments Tue, 07 May 2013 13:26:50 +0000 http://www.thetruthaboutcars.com/?p=487616

Last month, GM CEO Dan Akerson said that GM might move production away from South Korea if tensions with North Korea escalate. Korea labor unions were not amused, saying that Akerson was using the crisis as a pretext to gain the upper hand in upcoming labor talks.

Last week in Detroit, Akerson told GM’s South Korean union leader that he won’t pull GM out of South Korea. He also said he is unhappy with the Korean union, and that he will bring up the matter this week with South Korea’s President Park Geun-hye, when the “Iron Lady” will visit the U.S. this week.

Now, the union is fuming.

“We are upset by his remarks. We did not go all the way to the U.S. to hear that,” union spokesman Choi Jong-hak told Reuters.

More than four out of 10 Chevrolet vehicles sold globally, are made in South Korea.

In January, rumors about GM  shifting production to underutilized European factories made the union threaten “war” if GM does that. Knowing the militant Korean unions, this is not just a figure of speech.

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Akerson Gets Millions More In Cash To Grease His Exit http://www.thetruthaboutcars.com/2013/04/akerson-gets-millions-more-in-cash-to-grease-his-exit/ http://www.thetruthaboutcars.com/2013/04/akerson-gets-millions-more-in-cash-to-grease-his-exit/#comments Fri, 26 Apr 2013 16:48:43 +0000 http://www.thetruthaboutcars.com/?p=486303

Companies – or so they say – pay their executives the big bucks to keep them from leaving, or, in corporate-speak to “retain” them. In the case of GM CEO Dan Akerson, they pay him more because he will leave. Nasty people will say “to make him leave.”

Claiming that its 64-year-old CEO may retire soon, GM changed Akerson’s package for 2012. Instead of a mix of “Restricted Stock Units,” (which Akerson would have to keep in the kitty for three years) and “Salary Stock Units” (which he can trade in immediately), Akerson received everything in immediately trade-inable stock, “in acknowledgement of the possibility of his retirement before the completion of the three-year vesting period for RSUs,” a filing with the SEC shows. It’s good to know that Akerson won’t have to worry about his retirement (like some Delphi managers, for instance.)

It is not immediately clear how much money Akerson really made.

Realized Annual Compensation
Chairman & CEO, Daniel F. Akerson
2011 2012
Annual Compensation
Salary $1,700,000 $1,700,000
Stock Awards
SSUs $5,284,238 $7,346,373
RSUs Earned (1) $1,986,286
All Other Compensation $55,514 $70,149
Total $9,026,038 $9,116,522
Annualized Compensation $9,026,038 $9,116,522

One table makes us believe he made $9.1 million in 2012.

Name and Principal Position Year Salary Stock Other Total
Daniel F. Akerson (1) 2012 $1,700,000 $9,332,659 $70,149 $11,102,808
CEO 2011 $1,700,000 $5,947,229 $55,514 $7,702,743
2010 $566,667 $1,766,664 $194,088 $2,527,419

Another table says Akerson made $11.1 million.

Bloomberg, which is better at deciphering these filings, is convinced that “Akerson’s compensation, which is subject to government review because of GM’s 2009 U.S. bailout, increased 44 percent to $11.1 million last year.”

At the RenCen, people claim ignorance when it comes to Akerson’s retirement plans. “We certainly wouldn’t speculate on what he will actually do — that’s up to him,” spokesman Tom Henderson told Bloomberg.

And who will be the man or woman after Akerson? According to Bloomberg, the folks in the running are Steve Girsky, Mary Barra, and TTAC commenter NADude, also known as Mark Reuss.

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Akerson Uses North Korea To Threaten South Korean Unions http://www.thetruthaboutcars.com/2013/04/akerson-uses-north-korea-to-threaten-south-korean-unions/ http://www.thetruthaboutcars.com/2013/04/akerson-uses-north-korea-to-threaten-south-korean-unions/#comments Tue, 09 Apr 2013 09:00:21 +0000 http://www.thetruthaboutcars.com/?p=484099

Last week, GM CEO Dan Akerson said that GM might move production away from South Korea if tensions with North Korea escalate. Today, Korea labor unions said Akerson is using the crisis as a pretext to gain the upper hand in upcoming labor talks.

Akerson said that GM is “making contingency plans for the safety of our employees to the extent that we can,” and while it is difficult to quickly shift production from South Korea, GM might just do that for the long-term.

Killing jobs in South Korea would do very little for employee safety. Union spokesman Choi Jong-hak thinks it’s a flimsy argument:

“It is a message by Akerson to the union saying ‘don’t make excessive demands’… They want to make the union feel jittery,” Choi Jong-hak told Reuters. “It is a threat, as the labor union here is seen as a stumbling block for its restructuring of its global production system.”

GM Korea told its union in November that it would not produce the next-generation Cruze compact in South Korea. Unions have threatened “a war” if GM shifts output to Europe.

GM is South Korea’s second-biggest automaker after Hyundai Motor Group.

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The Case Against Akerson, Part 3 of 3: Loss Of Confidence http://www.thetruthaboutcars.com/2013/03/the-case-against-akerson-part-3-of-3-loss-of-confidence/ http://www.thetruthaboutcars.com/2013/03/the-case-against-akerson-part-3-of-3-loss-of-confidence/#comments Fri, 08 Mar 2013 16:08:27 +0000 http://www.thetruthaboutcars.com/?p=480541  

After part 1: Breach Of Trust,  and part 2: Lack of Strategy,  now the long-awaited final part.

In his book Car Guys vs. Bean Counters, GM’s best-known executive, Bob Lutz, describes the task facing newly-appointed CEO Dan Akerson:

“Akerson has inherited a company headed for success… Akerson does not have to “fix the business.” His role is not to run the operations but to set the overall direction, inspire the troops, and make sure the product development momentum continues… Akerson’s largest contribution could be to become the respected and liked spokesman, the personification of General Motors. Making GM more open, more human, more accessible and more likable is the last, great unfinished task.”

Lutz knows of what he speaks: after all, he was long the likable, humanizing public face of GM’s upper management. More importantly, he established the revamped product development system that has produced GM’s most competitive lineup in the modern era. However, Lutz knew and knows cars and the car business. Akerson knows how the telephone works.

Nobody, inside GM or out, has expected Akerson to radically reform GM’s core business; his only task was to provide a public face that inspired confidence in America’s automaker (Lutz offers Lee Iacocca and Alan Mulally as examples of auto executives who have played this role well). And yet, Akerson has not only failed to provide GM with a likable face, he has needlessly exacerbated public criticism of GM and inflamed internal divisions within the company.

Had Akerson taken Lutz’s advice, he would have focused on a few key issues: stabilizing GM’s executive ranks after Whitacre’s purges, supporting GM’s immensely talented product developers with the resources and respect they deserve, allowing PR messaging that supports attempts to revamp marketing, and distancing the company from its boot licking “Government Motors” stigma. Instead, Akerson ran his new marketing boss off for personal reasons (after he had been promised autonomy within the company), pushed his engineers into decisions with self-destructive results that he simply didn’t understand, put telecom cronies into positions they aren’t qualified for, promised to produce Volts in unsustainable (but political goal-supporting) volumes and inspired a wave of embarrassing leaks. In short, Akerson has managed to embody and amplify the product-ignorant, self-aggrandizing, morale-busting politics-over-market leadership that make up the worst stereotypes of GM managers, some of which may never have been true until the day Akerson took power. Lutz may have conquered the bean counters, but their destructive influence has been revived by the new telecom crowd. The bean counters knew the sometimes baffling mathematics of the auto business, the phonies know nothing.

This presents a fundamental danger to GM, if only because organizational culture begins at the top. But to make matters worse, Akerson is actively adding to the ranks of his loyalists, shutting out the profound expertise embedded in GM’s professionals in favor of sycophants and snake-oil dealing consultants. To be sure, the ranks of GM’s traditionalists still suffer from perennial turf battles, rivalry and misplaced loyalties; as a result, GM still needs a strong leader. But it needs a leader with credibility, both internally and externally. It needs a leader that knows when to push past parochialism but still knows when to trust the experts. A leader that understands his employees, his competitors and his customers.

Akerson’s profound disconnect with the business he is in, and thus the people he needs to work with him to make GM successful, is best encapsulated by his stated goal for the company. When Lutz was revamping GM’s product development program, and refocusing the company on the core of its business, the mission statement was adopted: “design, build and sell the world’s best vehicles.” Though simplistic, this motto provided GM with the kind of focus it had long been missing, not entirely unlike Mulally’s “One Ford” program, and it inspired a sea change in GM’s products. Now, not only is Akerson bashing his current portfolio of “aging” products, he has taken his eye off the ball by giving GM a new goal that seems ripped from the firm’s ignominious past: become the most valuable automaker in the world.

This uninspired non-goal can be met by any company. GM could declare victory tomorrow – as long as value is not measured by market cap.

This goal speaks mostly to Akerson’s shallow pomposity: having pushed himself into the top spot at GM without the first idea of what to do with the company, it makes sense for him to set a goal defined only by ambition. But it also displays his profound ignorance of the business: GM’s employees don’t need the “what” of a goal, they need the “how”… an insight that Lutz grasped and Akerson clearly does not. GM’s glorious past is inspiration enough, constantly reminding GM’s employees of the kind of market dominance that is possible. What GM needs is a leader who understands how companies develop ever-better products, how to earn the love of consumers by delighting them with quality and innovation, and how to compete head-to-head with the most fearsome global competitors.

Now that it is clear that Akerson is not that leader, now that he has lost the confidence of his employees and prospective customers, the question is “what comes next?” The answer: replace him as quickly as possible. Akerson’s predecessor, Ed Whitacre, has revealed that he nearly chose his head of North American operations Mark Reuss to be the next CEO, only rejecting him because of a perceived lack of seasoning. Instead of a young and experienced Reuss, we received an old an inexperienced Akerson, who, frankly, looks and acts older than he is.

Reuss commands respect within General Motors and the automotive community and the media at large. With a background in engineering and product development he is, more than anyone else at the top of GM’s management, the heir to Lutz’s product revolution. Meanwhile, whatever advantage Akerson’s age supposedly gives him has yet to produce a single notable accomplishment.

Despite his profound failures of both strategy and execution, Akerson has not yet fundamentally crippled GM. It remains chock-full of talent, it is well-positioned in various important global markets, and it is on the cusp of dramatically rehabilitating its reputation for uncompetitive product. In short, like Akerson himself, Reuss would be inheriting a company with a lot of things going for it. The key is reviving the company’s self-confidence and image with the public, tasks that the youthful and relatable Reuss has proven his ability at. But most importantly, the key is getting Akerson out before another crucial product launch is botched, before another strategically unwise investment is made, before GM’s reputation and unity is finally destroyed, turning GM into America’s Opel.

Part 1: Breach Of Trust. Part 2: Lack of Strategy.

Editor’s note: Renaissance_Man is a nationally and internationally known industry analyst who prefers to remain anonymous

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The Case Against Akerson, Part 2 of 3: Lack Of Strategy http://www.thetruthaboutcars.com/2013/03/the-case-against-akerson-part-2-of-3-lack-of-strategy/ http://www.thetruthaboutcars.com/2013/03/the-case-against-akerson-part-2-of-3-lack-of-strategy/#comments Wed, 06 Mar 2013 15:43:37 +0000 http://www.thetruthaboutcars.com/?p=480336

In the first part of this series, we looked at Dan Akerson’s problematic relationship with the truth, focusing on the gap between his stated intentions and his actions. Akerson is hardly the only example of an auto executive to indulge in personal myth-building or ego-driven dissembling. Analysts, employees and shareholders can forgive all kinds of personal shortcomings in a chief executive so long as he has a clear plan for success and the proven ability to get results. Unfortunately for GM, Dan Akerson brings nothing to the table in this regard that might outweigh his negatives.

The depth of Akerson’s strategic failure is nothing short of stunning, encompassing almost every element of GM’s global footprint.

From China to North America, from Europe to the developing world, General Motors is not only failing to take advantage of its fresh start, it is mortgaging its future at every turn. Changing the culture of a company the size of GM would be difficult under the best circumstances, but when the boss is completely in over his head it becomes a task of sysiphean futility.

Akerson’s lack of strategic vision for GM is probably best encapsulated by the unfolding mess in Europe.

With its US operations newly profitable, fixing its long-troubled European operations should have become an overriding priority for GM after its IPO, if only because every analyst cited it as cause for bearishness. Over two years after the IPO, GM’s plan for Opel (if in fact one exists) is as inscrutable as ever. Negotiations with unions are stuck on the ground floor, and while competitors like Ford are taking bold action to cut capacity, GM’s executives talk about a “product-led” Opel turnaround in a market that likely won’t ever return to past levels.

It would be bad enough if Akerson simply didn’t have a plan beyond waiting to see if Opel’s problems solve themselves, but instead he has doubled down on GM’s European problems by spending $400m on a stake in Peugeot-Citroen. That investment needs no special criticism, as about $200 million of it had to be written off after less than a year. But beyond the sheer tactical stupidity of investing in a vulnerable automaker in the midst of an industry shake-out, doubling the company’s exposure to the very problems that were plaguing Opel stands alone in terms of sheer strategic failure. Clearly Akerson missed the pre-bailout debate over a possible GM-Chrysler merger, which ended with the consensus that combining two companies with the same problems is a bad idea.

Unable to convince anyone that there is a plan to solve GM’s European mess (or that there was any logic behind the PSA alliance), Akerson has floated the notion that the French automaker will somehow help as a partner in developing markets. Beyond the fact that PSA has few accomplishments worth mentioning in developing markets (not coincidentally one of the reasons it’s in trouble), the move throws GM’s relationship with its previous developing-market partner SAIC into question. Having forged extremely tight ties with SAIC, which helped arrange a Chinese bank loan to fund its overseas operations in 2009, GM is now being led away from its Chinese ally. There might be some rationale for Akerson’s move away from SAIC if it actually made GM less dependent on its Chinese partner, but GM will continue to rely on its Chinese partner for growth in Asia and low-cost technical development. Meanwhile, the fact that one of the world’s largest automakers won’t expand into developing markets beyond China without a partner (which would eat into already-low developing market profit margins) is nothing short of baffling.

In China itself, Akerson has overseen a period of relatively strong volume growth. However, with the overall market slowing, the emphasis is moving towards the profitability of the luxury market, and here GM is losing ground to the competition. Despite its early advantage, Buick has been stuck in neutral, and Cadillac is losing relevance as German luxury brands attack the market. GM’s volume growth, on the other hand, has all come from its Wuling low-cost commercial vehicle operation, which offers only miniscule profits per vehicle. With profit opportunities few and far between in the current global climate, and blessed with a Buick brand that has been beloved in China for decades, GM could be making a lot more money in China. Adding insult to injury, GM’s aggressive joint technical development also means SAIC is already debuting technology like dual-clutch transmissions that GM doesn’t even offer in developed markets. Without brand equity now or a clear technological advantage going forward, GM’s future in China is hardly being guided with care.

But if it’s important for GM to squeeze more profits out of China in the short term, the same is doubly true for the North America. The US market is projected to supply a huge percentage of global profits over the next several years, making it a major priority for every automaker. Thanks to the bailout, GM almost can’t help but make money in its home market, but Akerson and his team have shown no ability to lick GM’s nagging problems. Market share is not only stagnant at best, it continues to closely track incentives. Last November, GM’s incentives as a percentage of average transaction price fell below the industry average for the first time, resulting in its worst monthly market share since bankruptcy. With inventory levels remaining stubbornly high as well, it’s clear that Akerson has made no progress on any of GM’s persistent profit drags.

Worse still, Akerson’s underwhelming results in GM’s most important market are further undermined by his strategic decision to back an aggressive push into subprime lending. Having acquired Americredit, the new GM Financial has rapidly become a leader in subprime auto lending, helping GM move cars out the door but introducing new financial risks to the company. GM Financial’s default rate is pushing up, and is already higher than any other in-house lender in the business. In short, Akerson is taking GM back to the bad old days of “redlining” sales with big inventory, big discounts and subprime financing, but still can’t change the company’s momentum on market share or profitability.

For all the open wounds, impetuous alliances, self-destructive dependencies and lost opportunities scattered across GM’s global empire, the strategic mistake that underlies all of Akerson’s failures as CEO has to do with product. As a board member, Akerson was famously critical of GM’s cars; as CEO he has only hurt the product renaissance that was underway when he arrived at GM. From his well-documented decision to rush the new Malibu to market, crippling what was arguably GM’s most important car, to a signing off on a batch of too-conservative trucks, Akerson has proven repeatedly that he simply does not understand the business that he is in. And yet, despite his clear ignorance of even basic facts of the car business, he has developed a reputation for making rash decisions to “shake things up.” This fits perfectly with the pattern described in Part One of this series: Akerson is driven by ego rather than strategy.

The car business is hugely unintuitive. It looks easy, at least to the many neophytes who try their untrained hand in the field, only to go down in flames, taking investor money with them. Running a multinational car company probably is one of the most complex tasks in the world. Your research won’t bring fruits for ten years, or never, but you must spend billions on it. Your products must be right for markets and economies 5 years from now, all over the world. You are up against companies like Toyota and Volkswagen, run by CEOs who have cars in their genes, who have been around cars all their lives, and who know how to direct and lead armies of engineers, marketing and finance people into victory. The competition won’t call for Akerson’s head: The longer he is in his job, the more assured is their victory.

We were made to believe that GM was saved by the government. In reality, it was the American automobile industry that was saved from certain annihilation by foreign carmakers, and we should thank the government for it. In truly Washingtonian fashion, they win the war and lose the peace by putting the American car industry in the hands of an utter amateur. The man in charge of a car company must be a strategist and tactician of the caliber of Alexander the Great, leading from the front, knowing when to dismiss his advisers, knowing when to do the unexpected, having a sixth sense for a sudden opening in the ranks of the opposition, intuitively knowing how to ruthlessly exploit a weakness.

Akerson was put at the helm of GM by politicians who know even less about the car business than an Akerson. As the politicians sell their shares in GM and leave, they should take their man with them. If Akerson is replaced with a CEO worthy and capable of guiding GM, the stock will surely bounce, making the exit less painful.

The real tragedy of all this: the deep reserves of talented people at GM do know how to make quality products, and the company had been making real progress towards a brighter future. Now it is being wildly misled in nearly every aspect by a man who bullied his way to the top of a company he doesn’t understand in an industry that he doesn’t understand. As we will explore in Part Three of The Case Against Dan Akerson, this has led to a complete loss of confidence in the carpetbagging telecom man and his cronies, jeopardizing GM’s new lease on life. For the good of the company, it’s time to replace him with someone who understands the business… or at least understands when he doesn’t understand the business.

Previous: Breach Of Trust. Forthcoming: Part 3: Loss Of Confidence.

Editor’s note: Renaissance_Man is a nationally and internationally known industry analyst who prefers to remain anonymous

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The Case Against Akerson, Part 1 of 3: Breach Of Trust http://www.thetruthaboutcars.com/2013/03/the-case-against-akerson-part-1-of-3-breach-of-trust/ http://www.thetruthaboutcars.com/2013/03/the-case-against-akerson-part-1-of-3-breach-of-trust/#comments Fri, 01 Mar 2013 16:59:59 +0000 http://www.thetruthaboutcars.com/?p=479545

Author’s note: When the government rescued General Motors from certain disaster, it was a chance at a fresh start. A chance to not just slow GM’s half-century of market share loss, but truly return America’s largest automaker to its place of pride. With debts erased, unions tamed and coffers restocked by the government, all things should have been possible. And yet, first under Ed Whitacre and now Dan Akerson, General Motors has consistently failed to live up to its true potential. Only new leadership can give the people of General Motors, to say nothing of the American people, an automaker they can be truly proud of.

Like every individual, every organization wants to present its best face to the world; it’s why the PR business exists, and why your 14-year-old daughter spends hours manicuring her Facebook presence. But when the desire to be seen in a positive light becomes too strong, individuals and organizations often end up hurting themselves as much as helping. Put in simple terms: if you misrepresent who and what you are too many times, you lose credibility. This seems to be what is happening to GM’s CEO, Dan Akerson.

From the very first instance of his involvement with General Motors, the story of Dan Akerson shot through with contradictions, conflicting stories and confusion. In interviews, Akerson has cast his coming to GM as his answering a “call to service,” comparing it to the motivations taught at the US Naval Academy and saying he never thought he would lead the automaker. But rather than being “called” by the government from among the nation’s CEOs, Akerson himself lobbied to be put on GM’s board. Naval Academy connections, rather than Naval Academy values, explain why Dan Akerson was “asked” to serve on GM’s board.

From this initial misrepresentation, a pattern quickly emerges. Upon becoming CEO, Akerson maintained that it was all a big surprise, and has unequivocally stated for the record that “I didn’t seek this job. The board asked me to do it.” Yet, as with his appointment to GM’s board, Akerson takes far too little credit. According to his predecessor as GM’s CEO, Ed Whitacre, Akerson volunteered for the job after earning a reputation for being one of the board’s most “consistent critics.” Whitacre writes in his book, “Dan wanted to be chairman and CEO from day one.”

Of course, the most ambitious people often take the greatest pains to conceal their ambitions, and if Akerson were simply wrapping his desire to run GM in the trappings of national service, the sin could be overlooked. Unfortunately, his entire tenure has been characterized by consistently problematic relationship with the truth.


One of the most egregious examples of this involves GM’s decision not to sell Opel. Early reports indicate that Akerson was one of two board members in favor of selling Opel, and unnamed sources even explained his logic to Reuters thus: “Europe was a market of national champion automakers — VW in Germany, Fiat in Italy and Renault in France — and pan-European luxury brands like BMW and Daimler AG’s Mercedes, a person familiar with Akerson’s thinking said. Opel is neither and Akerson believed it would be a long, uphill battle to fix it.” Then, as Europe’s economic downturn deepened and Opel emerged not only as GM’s main source of losses but as a drag on its stock price, Akerson apparently changed his story. Suddenly the NY Times reported the exact opposite story: that Akerson was one of two board members who voted to keep Opel.

The fact that Akerson has allowed these two mutually-exclusive stories to linger without clarification isn’t just a sign of his duplicity, it indicates the extent to which he lacks a strategy for General Motors. But that argument deserves its own essay, and will be explored in the second part of this series.

Thus far, the pattern of Akerson’s deception paints a clear picture of a man driven to place himself atop GM for reasons of personal gratification rather than because he had the skills or strategy to turn the automaker around. This impression is confirmed by his latest truthfulness challenge, which involves his alleged request for a pay raise. When CNBC obtained documents showing GM had requested a 20% pay raise for Akerson, GM’s official communications team hit back, denying the story and asking media outlets to “correct the record.” But, despite GM’s claims that it had not officially requested a raise for Akerson, an earlier report by the Special Inspector General for TARP revealed that GM had in fact requested pay restriction exemptions for Akerson and other executives, but had been rejected. The SIGTARP’s finding was that many of GM’s top-level executives’ compensation, including Akerson’s, were already “excessive” even before GM requested exemption from restrictions.

Men engaged in “national service” don’t typically make millions of dollars each year or request 20% raises, and in order to preserve his image as a selfless leader, Akerson used GM’s resources to imply that government watchdogs lied about his un-servant-like behavior. As a result, Akerson didn’t just hurt his own credibility, he hurt GM’s as well. But then, Akerson’s willingness to sacrifice the image of the company he is supposed to be reviving in order to preserve his personal legacy has already been established.

When Akerson suddenly and unexpectedly fired his Global Chief Marketing Officer, Joel Ewanick, he argued that Ewanick had agreed to a Manchester United worth hundreds of millions of dollars without his approval (even though Ewanick had been hired with the promise of “autonomy”). Akerson went on to sign the deal anyway, and what followed was an embarrassing series of leaks and counter-leaks that undermined confidence in GM’s already rapidly-rotating executive ranks. When the dust settled the picture was fairly clear: Akerson simply didn’t like Ewanick. But in order to hide his true motivations he put GM’s C-Suite through an unnecessary and morale-sapping public ordeal.

From his first involvement with General Motors, Dan Akerson has sought to wrap a personal ego project in the banner of national service. And as his tenure has dragged on, the disconnect between his stated intentions and his actions have created a credibility problem not just for him but for the entire company. Indeed, Akerson has been consistently willing to weaken GM in order to preserve his own legend. And, as every student of corporate culture knows, the longer this dynamic goes on unchecked, the deeper it will be embedded in GM’s culture.

Of course, if this were an isolated issue, the talented people of General Motors might be able to overcome the self-destructive behavior of its selfish and deceptive chief executive. But Akerson’s self-serving duplicity is intimately tied to his utter lack of a vision or strategy for General Motors, a topic that will be addressed in Part Two of The Case Against Dan Akerson.

Forthcoming: Part 2: Lack Of Strategy, Part 3: Loss Of Confidence.

Editor’s note: Renaissance_Man is a nationally and internationally known industry analyst who prefers to remain anonymous

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House Committee Blasts Overpaid Bailed-Out Execs. The Freep Blasts GM http://www.thetruthaboutcars.com/2013/02/house-committee-blasts-overpaid-bailed-out-exes-the-freep-blasts-gm/ http://www.thetruthaboutcars.com/2013/02/house-committee-blasts-overpaid-bailed-out-exes-the-freep-blasts-gm/#comments Wed, 27 Feb 2013 17:57:31 +0000 http://www.thetruthaboutcars.com/?p=479336
Yesterday, the House Oversight and Government Reform subcommittee held a hearing to look into executive compensation “at bailed-out firms that is egregiously out of line with what the President committed to the American people,” as Chairman Jim Jordan said. Jordan recalled that the President had committed “that top executives at firms that receive extraordinary help from U.S. tax payers will have their compensation capped at half a million dollars.” That clearly wasn’t the truth. Yesterday, we heard that GM CEO Dan Akerson, for example, made $9 million in 2012 and wanted $11.1  this year. Jordan said that “Treasury’s failure to protect tax payers is part of a disturbing pattern in which this administration makes promises to the public but the does not live up to them.” That’s not the only pattern that is disturbing.

Fight government waste, advance to 8:45

Yesterday, media outlets, including TTAC, received a message from GM spokesman Alan Adler, complaining about “leaked documents” and that “reports that General Motors has requested an increase in Dan Akerson’s 2013 compensation are false. In fact, Dan specifically asked to keep his compensation at the same level for 2013 as it was in 2012 and 2011.”

With this statement, GM continued the pattern of alienating its last friends. The Detroit Free Press, which initially had published the documents, writes today  that “GM called the report false, though the committee later released the same document showing a proposed total compensation package of $11.1 million for Akerson.” The Freep then put its finger on an even more embarrassing fact:

It turns out that Akerson already made $11.1 million in 2012, “because he was allowed to cash in stock awards he received in 2011,” the Freep says. So, $11.1 million in 2012 and $11.1 million in 2013 wouldn’t be a raise. At least not this year, sure. Splitting hairs may work in court, but not in the court of opinion. Trying to be too smart often looks very stupid.

We have linked to the full recording of the hearings. They are another example of Government waste, in this case of bytes and bandwidth. The first 8 minutes and 45 seconds are a recording of nothing. Your tax dollars at work.

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Dan Akerson Wants a Big Raise, Washington Sugar Daddy Not Sure Yet, GM Says: Not True! http://www.thetruthaboutcars.com/2013/02/dan-akerson-wants-a-big-raise-washington-sugar-daddy-not-sure-yet/ http://www.thetruthaboutcars.com/2013/02/dan-akerson-wants-a-big-raise-washington-sugar-daddy-not-sure-yet/#comments Tue, 26 Feb 2013 13:29:53 +0000 http://www.thetruthaboutcars.com/?p=479138

GM’s CEO Dan Akerson asked for a big raise. He thinks his work at GM is worth a paycheck of $11.1 million this year, up 20 percent from last year,  Reuters reports, citing documents. The embarrassing part: Akerson and GM have to ask its white House sugar daddy for approval.

As part of GM’s government-funded bailout, the salaries of  GM executives must be authorized by a special paymaster from the federal government. The request for a raise comes at an inopportune time.

Last month, the special paymaster faced strong criticism from the TARP Special Inspector General . The report said the government “continues to award excessive pay packages.” It also flogged executives who “continue to lack an appreciation for their extraordinary situations and fail to view themselves through the lenses of companies substantially owned by the U.S. Government.”

The report published the 2012 pay packages of executives of bailed-out companies and said:

“In stark contrast, the 2011 median household income of U.S. taxpayers who fund these companies was approximately $50,000.”

Akerson’s request for a pay raised is part of documents that were published a day before a U.S. House Oversight and Government Reform Committee would be looking into whether the U.S. Treasury has allowed excessive executive pay at companies aided by the Troubled Asset Relief Program.

Meanwhile in Germany, Volkswagen CEO Martin Winterkorn applied for, and received, a salary reduction.  Based on Volkswagen’s record $29 billion profit, Winterkorn was entitled to a bonus that would have raised his  2012 remuneration to €20 million ($26 million.) Last week,  Volkswagen’s supervisory board ruled that Winterkorn will be paid a total of 14.5 million euros ($19.17 million) for 2012 in fixed salary, bonuses and incentives, compared with 17.5 million a year earlier.

Winterkorn’s private taxi

A U.S. Treasury Department official said no determinations has yet been made for the 2013 compensation of GM execs. Once the government is out at GM, no more embarrassing requests for raises.  Also, GM execs will get their jets back. This must be the most embarrassing part: While RenCen execs must fly commercial, Winterkorn has his private Airbus A319CJ, along with a fleet of Dassault Falcons.

In the meantime, GM spokesman, manager of News Relations and GM Media Online, Alan Adler said:

“Reports that General Motors has requested an increase in Dan Akerson’s 2013 compensation are false. In fact, Dan specifically asked to keep his compensation at the same level for 2013 as it was in 2012 and 2011. That amount of $9 million is what the company submitted to the Office of the Special Master for TARP Executive Compensation.

Unfortunately, someone who obviously did not understand the compensation request leaked the information in a way that misrepresented the truth in order to score political points on the eve of a congressional hearing.”

Adler asked “that media outlets, including TTAC, that reported the false story correct the record.” Done!

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A Tale Of Two Akersons: Was He For Keeping Opel, Or Was He Against? http://www.thetruthaboutcars.com/2013/02/a-tale-of-two-akersons-was-he-for-keeping-opel-or-was-he-against/ http://www.thetruthaboutcars.com/2013/02/a-tale-of-two-akersons-was-he-for-keeping-opel-or-was-he-against/#comments Thu, 07 Feb 2013 16:55:55 +0000 http://www.thetruthaboutcars.com/?p=476730

Legs of RenCen executives must be covered with black and blue marks from kicking themselves daily for not unloading Opel when the German government offered to take the sick patient off GM’s hands. A deal, financed with $6 billion courtesy of German tax payers and a little petty cash from Russian bankers would have given GM a little money and an immediate end of the huge losses at Opel. Frankly, nobody in Germany had much hope for an Opel under Magna and the Russians either, it was seen as a hospice where to wheel the sick patient until it dies in silence, a la Saab.

At the last minute, GM changed its mind. Who made the ill-fated decision? Was Akerson for keeping Opel, or for getting rid of it?

In 2011, Reuters reported that it was most of GM’s board, with the notable exception of  GM CEO Dan Akerson and another unnamed  person.  In Summer of 2011, Reuters wrote:

“Akerson was one of only two GM board directors who voted against keeping Opel in late 2009, believing Europe was a market of national champion automakers — VW in Germany, Fiat in Italy and Renault in France — and pan-European luxury brands like BMW and Daimler AG’s Mercedes, a person familiar with Akerson’s thinking said. Opel is neither and Akerson believed it would be a long, uphill battle to fix it.”

The matter is more complex than simple chauvinism, and Opel is seen as a national, albeit sick, champion in Germany, but the long uphill, or make that downhill battle remains.

A year later, when the New York Times looked into the matter, the story had changed.  Instead of two people  who had voted for unloading Opel, there were two for keeping it: Akerson and Steve Girsky.  Writes the Times:

“G.M. nearly sold Opel three years ago before its reconstituted board decided to keep the business because of its integral role in the company’s global product programs. Two of the directors who championed the decision to retain Opel were Mr. Akerson and Stephen J. Girsky, the board’s vice chairman.

Now both are admitting that a turnaround in Europe has been far tougher than anticipated.”

The stories are diametrically opposed.  In 2011, a whole board allegedly wanted to keep Opel, but Akerson and someone else were against. A year later, Akerson, along with Girksy,  were said to have been champions of keeping Opel American.

The reporters of both stories are the best in the business. On the Reuters side, Ben Klayman has been an important part of Reuters’ Detroit-based auto team. On the New York Times side is Bill Vlasic, the NYT’s best auto industry reporter and author of Once Upon a Car, the account of the recent “fall and resurrection” of the Detroit car manufacturers.  Both reporters stick to their story. The Vlasic  story reflects the party line. However, the Klayman story is based on solid sources, and Klayman never received a call from GM, telling him the story was wrong, something GM usually is not shy to do.

Now there is one item that had changed: When the board voted to keep Opel, Akerson was a simple board member. He  became CEO in late 2010, and it looks better is he’s firmly behind Opel.

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GM, Too Scared To Go To Emerging Markets Alone, Picks Two Even Scarier Escorts http://www.thetruthaboutcars.com/2013/01/gm-too-scared-to-go-to-emerging-markets-alone-picks-two-even-scarier-escorts/ http://www.thetruthaboutcars.com/2013/01/gm-too-scared-to-go-to-emerging-markets-alone-picks-two-even-scarier-escorts/#comments Mon, 28 Jan 2013 15:21:52 +0000 http://www.thetruthaboutcars.com/?p=475536

GM’s CEO Dan Akerson gave an interview to Norihiko Shirouzu, one of the best men in Reuters’ impressive stable of automotive writers. Akerson disclosed two very scary pieces of information:

  1. GM hinged most of its emerging markets strategy on its Chinese JV partner SAIC
  2. GM will hinge most of its emerging markets strategy on SAIC and PSA

In a world of stagnating first world markets, emerging markets are the placer to be for growth and volume. Already, more cars are sold and bought in emerging markets than in the U.S., Canada, Japan, and Western Europe. A well-managed car company must have a solid emerging markets strategy, or it will die.

Apparently, GM wanted someone to hold its hands when venturing into these strange lands. Says Reuters:

“Top executives of the global automaker had begun indicating about three years ago that it would use SAIC, which produces affordable no-frills cars in joint ventures with GM, as its preferred partner to expand into emerging markets worldwide.”

Scary. Not only does GM want to share the pie in China, where it has to. It also wants to share in other markets, where is does not need to. Shared growth is only half the growth. And if the growth comes from SAIC’s “affordable no-frill cars,” then the money will end up at SAIC. What’s even scarier: GM helps  China’s largest automaker establish itself  in the most interesting world markets.

Can it get any scarier? Yes, it does. Says Reuters:

“But in recent months, GM has been looking to also partner with France’s PSA Peugeot Citroen, not only in Europe where the U.S. auto maker is trying to fix its troubled Opel unit but also in Russia and Latin America.”

Already, the GM-SAIC joint venture is selling Chevy Sail compacts to South American, along with Chinese-made Wuling microvans, nearly always using GM’s dealer networks. Now it wants to share its future with French patient PSA.

According to Reuters, Akerson “is now trying to divide the emerging world between its two partners. SAIC in Asian markets outside China and PSA in Russia and Latin America.”

Imagine: You walk through dark alleys in foreign lands. You are accompanied by one guy what wants you dead, sooner or later, and another guy who will be dead, sooner or later. Very, very scary.  GM does not new partners. It needs a new boss.

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Whitacre’s Book Reveals Secret Of Unseasoned GM CEOs http://www.thetruthaboutcars.com/2013/01/whitacres-book-reveals-secret-of-unseasoned-gm-ceos/ http://www.thetruthaboutcars.com/2013/01/whitacres-book-reveals-secret-of-unseasoned-gm-ceos/#comments Thu, 24 Jan 2013 03:36:46 +0000 http://www.thetruthaboutcars.com/?p=474978

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.

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Loose Lips Sink Ships: Akerson Stops Leaks, Starts New Ones http://www.thetruthaboutcars.com/2012/08/loose-lips-sink-ships-akerson-stops-leaks-makes-new-ones/ http://www.thetruthaboutcars.com/2012/08/loose-lips-sink-ships-akerson-stops-leaks-makes-new-ones/#comments Fri, 10 Aug 2012 16:47:00 +0000 http://www.thetruthaboutcars.com/?p=456293

There goes the prestige

Rarely do Dan Akerson, the CEO of GM, and TTAC see eye to eye. This time, they do. Two weeks ago, we complained that GM is leaking like a scuttled steamer.  Yesterday,  Dan Akerson took the whole company to task: “We have to stop leaking in this company. It’s an act of treason — it really is,” Akerson said in an internal video conference with GM employees. The conference tape was promptly leaked to the Detroit News, and it contained more leaks.

After GM’s Chief Marketing Office Joel Ewanick was ousted under murky circumstances, the company officially threw dirt after him (“Failed to meet the expectations that the company has for its employees.”) Soon thereafter, Ewanick found himself under a barrage of leaks, each more childish than the other.  Akerson wants the leaking to stop. And while the former Navy officer is shoring up the ship, he leaks some more.

The Detroit News was “given access to a recording of the call” and says  that Akerson complained about

“a recent Bloomberg News report on the dismissal of marketing executive Joel Ewanick — over internal frictions and failure to disclose the full cost of a $559 million soccer deal — “was almost verbatim what happened. That is unfair to anybody whether you think he’s right, wrong or in-between.”

Well, thank you for leaking that  Bloomberg had it right. Now they don’t have to rely on “people familiar with the matter,” they have their confirmation right from the boss.

Akerson said employees would have to sign a document called “Winning With Integrity.”

A GM spokeswoman promptly told the Detroit News “that the document is not new, and that employees have had had to sign a compliance form for at least 10 years.”

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GM Fires Marketing Chief For Soccer Deal, Then Signs It http://www.thetruthaboutcars.com/2012/07/gm-fires-marketing-chief-for-soccer-deal-then-signs-it/ http://www.thetruthaboutcars.com/2012/07/gm-fires-marketing-chief-for-soccer-deal-then-signs-it/#comments Tue, 31 Jul 2012 13:10:27 +0000 http://www.thetruthaboutcars.com/?p=454819

One day after  GM’s  Chief Marketing Executive Joel Ewanick was fired for failing ” to meet the expectations that the company has for its employees,” one day after it was leaked like from a fire hose that there were shady going ons between Ewanick and the Manchester United soccer club, GM signed a seven year contract with just the same soccer club. A day after the ouster of a marketing chief who was tasked with saving billions, GM paid, according to Reuters,  “twice as much as the team’s previous automotive sponsor” for putting “Chevrolet” on the team’s jerseys. Does this pass the smell test?

Officially, no reason is given for Ewanick’s ouster, except for the both mean-spirited and hamfisted not meeting of expectations. Unofficially, dirt is being thrown after Ewanick.

“Sources” told Reuters that “Ewanick didn’t properly report financial details about the jersey deal.” In the business, those anonymous sources are nearly always inside the company, and in 9 out of ten cases, the source is a company spokesman who prefaced what he said to the reporter with a “don’t quote me on that, but …”

Other sources, this time “some industry officials” (code for people outside of the company) don’t buy the story:

“While GM would not discuss Ewanick’s departure, some industry officials said a deal as big as the Manchester United sponsorship agreements would have been signed by multiple executives. They also raised the possibility that GM simply wanted to dump Ewanick as the automaker’s U.S. market share has declined by nearly 2 points in the first half of 2012 compared with the year before to 18.1 percent.”

I don’t know how they do it at GM, but at every large corporation I know, the CEO is intimately involved in the decision and deal making that precedes a major sponsorship deal.   The CEO would be involved even more so when the company pays twice the going rate.

Oh, and what about the improper dealings? “The wording of the affected deal terms was changed before the deal was made public on Monday,” a source that was “not authorized to discuss contract details” (code: insider for sure) told Reuters.

I don’t know how they do it at GM, but at every large corporation I know, if there is a deal with an impropriety huge enough to fire the marketing chief, that deal won’t get signed, and the police will get called instead.

We have yet to know for what marketing disaster Ewanick was fired. The much bigger PR disaster stares us right into the eye.

Even the usually fiercely loyal Detroit Free Press won’t buy into the amateurish attempts at spin:

“Issues with soccer deals are just a diversion from the real reason Ewanick was forced to resign, his inability to maintain or increase market share under his leadership, say GM marketing officials and advertising leaders familiar with the company. They didn’t want to be identified because they’re not authorized to speak about personnel issues.”

“GM marketing officials and advertising leaders familiar with the company” would be code for second line managers who still have a job, and people at the Commonwealth agency that are bracing for the other shoe to drop.

 

 

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Series Of High Level Executions Paint A Picture Of GM in Turmoil http://www.thetruthaboutcars.com/2012/07/series-of-high-level-executions-paint-a-picture-of-gm-in-turmoil/ http://www.thetruthaboutcars.com/2012/07/series-of-high-level-executions-paint-a-picture-of-gm-in-turmoil/#comments Mon, 30 Jul 2012 14:13:58 +0000 http://www.thetruthaboutcars.com/?p=454751

Panic at RenCen. It’s not that people are leaving GM. It’s how they leave. Two weeks ago, Opel  chief Karl-Friedrich Stracke presented numbers to Dan Akerson. Akerson fires him.  Opel gets two interim chiefs in a week.  Last Thursday, Opel’s new design chief Dave Lyon doesn’t even start his job.  Today, media in the U.S.  and Germany report that Lyon had been escorted from the building and to a waiting car by GM’s head of personnel. A day later, global marketing chief Joel Ewanick suddenly leaves. Instead of wishing him all the best for his future endeavors, GM spokesman Greg Martin puts a knife in Ewanick’s back: “He failed to meet the expectations the company has of an employee.”

It took them two years to come to that uncivilized conclusion? Ewanick was hired as U.S. marketing chief in May 2010. Apparently, he exceeded expectations, because half a year later, Ewanick was promoted  to global chief marketing officer. The leaked reasons for Ewanick’s ouster. Facebook and soccer, don’t ring true. In a normal company, when a marketing chief decides not to put ads on Facebook and to ditch football for soccer, a Facebook and football loving CEO simply would call the marketing chief and ask whether he’s serious. The same day, there would be a comment that the marketing chief was misquoted, in a normal company.

It all looks like Dan Akerson is panicking. The GM stock is at an all-time low. GM is losing market share. When July numbers will be announced this week, GM won’t look so good, industry oracles say. Mass executions always are great to deflect criticism – for a while.

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German Media Writes Opel Eulogy, Blames Thoughtless Akerson http://www.thetruthaboutcars.com/2012/07/german-media-writes-opel-eulogy-blames-thoughtless-akerson/ http://www.thetruthaboutcars.com/2012/07/german-media-writes-opel-eulogy-blames-thoughtless-akerson/#comments Mon, 16 Jul 2012 11:23:45 +0000 http://www.thetruthaboutcars.com/?p=452903

The summary execution of Opel chief  Karl-Friedrich Stracke, and the mess this has created, is front page material in the German press today. The fingers point in the direction of Detroit. Detroit has no clear strategy and changes directions like soiled underwear. The fingers also point at an impulsive Dan Akerson who is out of his depth.

According to Germany’s Handelsblatt, the firing of Opel chief Karl-Friedrich Stracke went down like this:

“GM boss Akerson arrived on a flash visit in Rüsselsheim and had a look at the latest numbers. When he found a deficit in the three digit millions in the business plans, he blew a gasket. The impulsive CEO fired Stracke out of hand – and left a mess in Rüsselsheim.”

The paper calls the reaction “as thoughtless as it its typical for the former Navy officer Akerson.”

The German edition of Financial Times says that “it signals everything else than hope when the cost cutter is fired in the middle of the cost cutting.”

The usually well-informed Frankfurter Allgemeine Zeitung opines: “It doesn’t improve matters when continuously new disturbances are caused in the company. It demotivates the staff and does not make for better sales.”

The GM stock is at an all-time low. If you bought the stock at the IPO, you are $15 under water. The market is worried about the never-ending losses in Europe. GM’s main sponsor Obama is up for re-election, and should he lose, there will be a big backlash in Detroit. This puts pressure on Akerson, and he seems to be cracking under pressure. And what is a panicking Akerson to do? There probably isn’t a single day where Akerson does not loathe Fritz Henderson who changed his mind on selling Opel after the deal was done. The bigger the stress, the more palatable the solution to dump Opel and get it over with. Reuters cites the former GE boss Jack Welch, who once said that if a company didn’t measure up, the only options were to “fix it, sell it, or close it”.

Reuters says today that GM is only a “step away from giving up on Opel for good.” Reuters cites Ferdinand Dudenhoeffer, Germany’s talking head for automotive matters, who said:

“The worst is that GM frequently changes course. Until yesterday the strategy was to guarantee jobs through 2016, today it is making cuts and closing plants as quickly as possible. This will be the last such attempt under Akerson and since GM couldn’t sell Opel last time, they will just wind it down if they can’t fix it.”

“Opel’s problems won’t be solved by managing it on the basis of quarterly results. Either the owner adopts a long term strategy and sticks to that plan or it looks pretty damn bleak for the brand in the future,” Andreas Halin, Managing Partner of GlobalMind Executive Search Consultants in Frankfurt and an expert on corporate management, told Reuters.

Reuters thinks that Opel workers will quickly find a job elsewhere. A headhunter told the wire service:

I know that the other German manufacturers are wringing their hands looking for qualified workers. I am sure Opel employees would be open to being poached by a competitor and if I worked at Opel – whether I was a manager, engineer or assembly line worker – I would immediately send my application to Volkswagen or BMW.”

To the apologists who say it is all the European market’s fault, and not so bad after all, the Handelsblatt has this advice:

“Other makers such as Fiat, Ford, or Peugeot suffer from the weak market. However, no automaker is navigating such a crash course as GM. The decline of Opel was not caused by the crisis of the market alone. It was also caused by a management malfunction. “

The Handelsblatt did award Dan Akerson the “Pinoccio of the Day” for saying: “We appreciate Karl’s many contributions to GM’s success.”

 

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Call Of Duty: Akerson’s Battle With The Truth http://www.thetruthaboutcars.com/2012/06/call-of-duty-akersons-battle-with-the-truth/ http://www.thetruthaboutcars.com/2012/06/call-of-duty-akersons-battle-with-the-truth/#comments Fri, 01 Jun 2012 18:33:56 +0000 http://www.thetruthaboutcars.com/?p=447222
GM CEO Dan Akerson might be in another one of his battles with the truth.

In a softballed interview with Fortune, GM’s CEO Dan Akerson said that he was suddenly and surprisingly drafted to lead GM as if it was time to go to war. “This was a call to service for me,” said Akerson, as he wrapped himself in a red, white, and blue flag and regaled  interviewer Geoff Colvin with stories from the U.S. Naval Academy.  Akerson makes the CEO job sound like a hardship post:

“It was somewhat of a dislocation to me from a personal routine point of view,  I had to move. I am sixty-some years old and it’s a little late in life to try to reinvent yourself.”

Hardship or not, Dan Akerson  followed the call to duty, even if  he “wasn’t expecting it.”

He wasn’t?

The Wall Street Journal says that it was Akerson who applied for the job, and that he used personal connections to get it:

His path to GM began about two years ago. A former Naval Academy engineering student and ship officer (he ran the ship’s power plant), he was at Carlyle in 2009 leading the global buyout unit. But he had followed GM’s troubles closely, and, hoping to get on its board, spoke to a colleague who knew the Treasury Department’s GM point person, Ron Bloom.”

The colleague, David Marchick, described Mr. Akerson to the Treasury man as a “tough-as-nails, no-B.S. conservative Republican.” To his surprise, Mr. Bloom responded: “He’s perfect.”

Well, maybe the Wall Street Journal got it wrong. Certainly, the  U.S. Navy Alumni Association must have had its story straight when it wrote:

On a humid June day in 2009, armies of lawyers were hashing out General Motors’ recent bankruptcy filing in a courtroom without air-conditioning in lower Manhattan. In Washington, Akerson, a managing director of the Carlyle Group, confided to an associate that he’d like to serve on GM’s new board of directors.”

The associate again was David Marchick. He tried to talk Akerson out of it. The job would demand a lot of Akerson’s time.  The pay would be much less than at Carlyle. Most of all, Akerson would have to deal with Washington. But Akerson, says the article, “wouldn’t let the idea go:”

“If you’re really serious, I can give Ron a call,” offered Marchick, who had done business with Ron Bloom, the head of Obama’s auto task force. Akerson agreed.”

Also according to this story, Akerson was pitched to auto task force chief Ron Bloom. Also according to this story, Bloom responded: “He sounds perfect.”

The article was reprinted many times.  Some sites even swear they had seen the same article in the Detroit Free Press. Where it can’t be found anymore.

These stories don’t jibe with Akerson’s claim that he was called up out of the blue, and that he followed the sudden call of duty, personal inconvenience or not. If the stories don’t jibe, then someone does not tell the truth. You decide who is telling lies.

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Toyota Roasts GM: More Prius c Sold In Three Days Than Volts In A Month http://www.thetruthaboutcars.com/2012/03/toyota-roasts-gm-more-prius-c-sold-in-three-days-than-volts-in-a-month/ http://www.thetruthaboutcars.com/2012/03/toyota-roasts-gm-more-prius-c-sold-in-three-days-than-volts-in-a-month/#comments Fri, 16 Mar 2012 17:12:21 +0000 http://www.thetruthaboutcars.com/?p=435265

Toyota is getting frisky. Per a press release, Toyota U.S.A. reports brisk sales of the game-changing Prius c compact hybrid. Then, TMS goes on to say that “In its first three days on the market, it sold 1,201 units, making it one Toyota’s fastest-selling vehicles and eclipsing Chevrolet Volt and Nissan Leaf sales for the entire month of February.”

This is highly unusual for the usually very careful and buttoned-up company. Even in private talks and after five Asahi Super Dry, you never hear anything negative about a competitor from a Toyota-san, or, for that matter, anything at all.

The comment that the Priuc c sold more cars in three days than the Volt in a month is most likely a subtle ribbing in the direction of Detroit. There, GM CEO Dan Akerson had claimed that “Toyota sold about the same amount of Prius in its first year as the Volt in its first year.”

The original Toyota Prius was launched in Japan in December 1997. In its first year, the Prius sold some 18,000 cars. The Chevrolet Volt was launched in the U.S. in December 2010. In its first year, the Chevrolet Volt had sold some 8,000 cars. That would be less than half of what the Prius sold in 1998.

After we had pointed out that small discrepancy, a vociferous posse of Akerson apologists appeared, claiming that their CEO had referred to the U.S. introduction of the Prius. Too bad that they had not checked those data either: In the U.S., the first recorded sales month of the Prius was July 2000. Sales Prius U.S. July 2000 through June 2001: 12,968, data according to Automotive News.

Any which way you spin it, Akerson was wrong. Not in the eyes of his trusted acolytes: Some claim to this day that 8,000 is more that 18,000 or 13,000. The new math must be contagious.

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Dan Akerson Says First Year Sales Of Volt As Good As Prius, Grows Long Nose http://www.thetruthaboutcars.com/2012/03/dan-akerson-says-first-year-sales-of-volt-as-good-as-prius-grows-long-nose/ http://www.thetruthaboutcars.com/2012/03/dan-akerson-says-first-year-sales-of-volt-as-good-as-prius-grows-long-nose/#comments Tue, 13 Mar 2012 18:19:56 +0000 http://www.thetruthaboutcars.com/?p=434854

The repeated stoppages of the Volt production triggered rumors that GM might discontinue the Volt altogether.

Dan Akerson himself had to come to the rescue of the embattled plug-in. Saying that “we are not backing away from this product,” Akerson promised more advertising and less volume. So far, so good.

Then, Akerson did something really bad. Surprisingly, Akerson used Toyota as a benchmark and reportedly said that “Toyota sold about the same amount of Prius in its first year as the Volt in its first year.”

Utter nonsense.

It gets worse.

In the first year, the Volt sold half of what the Prius had sold in the first year. And that in a market twice the size.

It gets worse.

In the first year, the Volt sold half of what the Prius had sold in the first year. And that at a time when gasoline did cost twice as much as when the Prius was launched.

If Akerson would know more about cars, then he would not have to tell lies. He also would know that Toyota had been terribly unhappy about the initial sales of the Prius. What should give Akerson further pause are rumors from Toyota that sales of the plug-in hybrid version of the Prius, launched in Japan in January, are not going well. There are no numbers available, but all I am hearing is that the Aqua/Prius C compact hybrid is selling like hotcakes, while the plug-in Prius is collecting dust. Again from what I am hearing, people balk at the price. The regular Prius in the G trim costs 2,520,000 yen ($30,000) in Japan. The G-trim Prius plug-in hybrid costs 3,400,000 yen ($41,000). All prices including tax.

People seem to shun the plug-in, and instead go for the Prius, or its smaller sibling the Prius c. That one costs 1,850,000 yen ($22,000) in the G trim. The Prius is Japan’s best-selling car, the Aqua / Prius C has become Japan’s third-best-selling car right out of the gate. Price is a big driver of the success of a car. Price is the biggest problem of the Volt. Even with a generous (and unsustainable) subsidy, it is way too expensive. The example of the Prius Plug-in Hybrid proves an old adage in the business: People may swear up and down that no price is too high when it comes to the environment. Once in the showroom, they buy the car that makes sense.

Oh, and back to Akerson. I know how to get him out of this. He should say he was misquoted. He should say he meant calendar year. Launched in December 1997, the Prius sold 323 in that month and year. Launched in December 2010, the Volt sold 326 in that month and year. I know, it’s a lame excuse, but it beats being called a liar.

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Still Generous With Incentives, GM Sheds Market Share Nonetheless http://www.thetruthaboutcars.com/2012/02/still-generous-with-incentives-gm-sheds-market-share-nonetheless/ http://www.thetruthaboutcars.com/2012/02/still-generous-with-incentives-gm-sheds-market-share-nonetheless/#comments Mon, 13 Feb 2012 16:47:44 +0000 http://www.thetruthaboutcars.com/?p=430704

GM’s turn-around hinges on a market share above 19 percent, board member Stephen Girsky said at an industry meeting in October 2009. “The public plan is 19 percent and change. That is what everything is being based on,” Girsky said during a panel discussion at a conference at Columbia Business School. Reuters was taking notes.

In the 3rd quarter of 2009, GM had a market share of 19.5 percent. The share climbed to 21.8 percent in January 2011, and eroded ever since.

In January 2012, GM’s market share stood at 18.4 percent, says Edmunds. In the same month, GM CEO Dan Akerson had a change of heart and said that this had been the plan all along:

“I like profitability more than I do market share. We’re a mass producer and scale matters to us, but obviously we’ll look for margin and profitability going into 2012.”

This is what Akerson dictated into the notepad of Reuters at the Detroit auto show. Reuters continued:

“Prior to its 2009 bankruptcy, GM was criticized for loading incentives onto its cars to drive sales and keep its factories operating at high capacity, regardless of what that did to profits. Since its restructuring, GM executives have stressed protecting the company’s ‘fortress balance sheet.’”

Data collected by Edmunds tell a different story. GM is by far the most generous American maker when it comes to incentives. In January 2012, GM’s Total Cost of Incentives (as calculated by Edmunds) was $3,171 per unit. Ford spent $2,788, Chrysler $2,447. The industry average stood at $2,141. In January 2012, only BMW put ($28) more on the hood of its much pricier cars than GM. GM out-spent Mercedes Benz which had been in a bitter fight with BMW for the luxury sales crown last year, and spent $3,107 in January.

At the same Detroit auto show, GM’s North America chief Mark Reuss promised that GM’s U.S. consumer incentives will remain at or near the industry average. Imagine what would happen if Reuss keeps his promise and drops incentives by $ 1,000.

Analysts polled by Bloomberg predict that U.S. automakers led by GM will lose more market share this year.

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From Akerson To Ghosn, The Mood Of Industry Leaders Darkens http://www.thetruthaboutcars.com/2011/10/from-akerson-to-ghosn-the-mood-of-industry-leaders-darkens/ http://www.thetruthaboutcars.com/2011/10/from-akerson-to-ghosn-the-mood-of-industry-leaders-darkens/#comments Tue, 18 Oct 2011 18:34:52 +0000 http://www.thetruthaboutcars.com/?p=415176

Industry leaders, usually known for their unfatiguing optimism, are more and more taking a cautious stance. GM’s CEO Dan Akerson predicts flat industrywide U.S. auto sales in 2012, while his colleague Carlos Ghosn, chief of Renault and Nissan, has feelings of “very great uncertainty” when he looks toward 2012.

In an interview with Automotive News [sub], Akerson said GM predicts “flattish” U.S. light-vehicle sales for next year. And that only if Europe’s debt crisis is not contagious and won’t affect the U.S. economy. Akerson sees the EU crisis as the biggest threat to auto sales and to the global economy.

For 2011, GM predicts U.S. light-vehicle sales will finish at around 12.7 million or 12.8 million, and for 2012, there won’t be much more: “As we go into ’12, we’re looking for kind of a repeat of ’11,” Akerson said. The pent-up demand will have to remain pent-up for a while.

Meanwhile in France, Carlos Ghosn said that “for 2012, we are all currently in a state of very great uncertainty for the time being.” Ghosn also fingered the debt crisis as a threat. Ghosn told Reuters that there “could be some grounds for optimism in 2012 if Europe managed to solve its sovereign debt crisis.” However, he does not see that happening anytime soon, because countries are not in agreement on the measures needed.

This time around, it also does not look like China will bail out the auto industry, as it happened in 2009 and 2010. At the Global Automotive Forum in Chengdu last week, none of the captains of the Chinese car industry doubted China’s long-term potential. But all were in agreement that next year, the industry won’t see much growth.

In Japan? Don’t ask.

 

 

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Opel Officially Not For Sale, Honestly Now http://www.thetruthaboutcars.com/2011/07/opel-officially-not-for-sale-honestly-now/ http://www.thetruthaboutcars.com/2011/07/opel-officially-not-for-sale-honestly-now/#comments Thu, 28 Jul 2011 03:29:02 +0000 http://www.thetruthaboutcars.com/?p=404568 Better late than never: After refusing for months to comment on rumors that Opel might be up for sale, and after having been lambasted from his own workers up to Germany’s government, GM CEO Dan Akerson said the magic words: “We don’t comment on speculation — and there has been a lot of speculation — but I will say this: Opel is not for sale.”

Akerson made the remarks at a GM plant while celebrating the official launch of labor talks with the UAW, Reuters reports.

The rumors had started early June when both Der Spiegel and Auto Bild, two papers at opposite ends of the colorful journalistic spectrum of Germany, had written that GM and especially Akerson could throw in the towel on Opel and will put the loss making European division up for sale. Workers and dealers wanted a clear denial from Akerson.

Nearly two months later, they have it.

Meanwhile in Germany, the restructuring of Opel’s Bochum plant is nearly done. There are 155 holdouts that refused to accept golden parachutes of up to $360,000 a head. They have until August 15 to accept. If they won’t, they will get fired, says BILD Zeitung.

 

 

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Opel Soap, Day 6: We Don’t Comment Rumors Of A Denial http://www.thetruthaboutcars.com/2011/06/opel-soap-day-6-we-don%e2%80%99t-comment-rumors-of-a-denial/ http://www.thetruthaboutcars.com/2011/06/opel-soap-day-6-we-don%e2%80%99t-comment-rumors-of-a-denial/#comments Tue, 14 Jun 2011 14:18:10 +0000 http://www.thetruthaboutcars.com/?p=398551

Workers, government, the press, all want a clear statement from GM: Is Opel up for sale, or not?

No clear statement is forthcoming, and frustration runs high. There never had been an official denial of the possible spin-off. The stress is so enormous that an alleged telephone call in which GM’s Dan Akerson supposedly told Opel’s Karl-Friedrich Stracke that purportedly GM is not in talks with a buyer for Opel, makes headlines around the world. Is that for real?The pressure is so high that a source at Opel reportedly leaked the above to Germany’s Handelsblatt.  Now, reporters can’t even get a comment with respect to the alleged telephone call.

The report itself isn’t even in the on-line version of the Handelsblatt. Instead, the paper riles its readers with an extensive gallery showing where the Chinese had bought what of Europe’s automotive industry.

 

 

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Akerson: BMW Better Than Cadillac http://www.thetruthaboutcars.com/2010/09/akerson-bmw-better-than-cadillac/ http://www.thetruthaboutcars.com/2010/09/akerson-bmw-better-than-cadillac/#comments Thu, 09 Sep 2010 12:05:50 +0000 http://www.thetruthaboutcars.com/?p=365181

When you start a new job, it’s considered important to make a good impression. How does the saying go? “Start as you mean to go on”. Well, Dan Akerson, I suspect, tried to heed that advice and ended up putting his foot in it. The Associated Press reports that Dan Akerson, CEO of Government (soon to be “General” again) Motors, presented a webcast to GM employees. The usual CEO rhetoric came out. “GM needs to keep competitors on their heels rather than responding to what they do” said one GM worker, who asked not to be identified as the broadcast was not available to the public; despite being owned by them. “Attack mode” was another phrase used. But then Mr Akerson said that GM’s Cadillac brand has to make cars that are better than BMW’s. Now I thought this was quite a harmless statement to make. The CEO set a (quite high) benchmark to beat. Sounds reasonable, right? Not according to some.

The comment drew the ire of USA Today. As the article said, “How sad if he really said that. He’s echoing the out-of-date bias of many car shoppers. Cadillac, data show, already is better than BMW.” Blimey! Calm down, lads! The article then goes on to quote J.D Power and Associates’ Initial Quality Study (IQS) and Vehicle Dependability Study (VDS). In those studies, Cadillac ranks higher than BMW nearly every year. USA Today then starts ranting about how even “bad” GM (their word, not mine) beat BMW.

“In IQS scores back to 2005, Cadillac finished as high as third of some three dozen brands surveyed, and no worse than 13th (except for 25th in 2007). BMW, meantime, ranked 3rd back in 2005, but since then no better than 16th of about three dozen brands. (The exact number surveyed varies by one or two each year.)”

On the VDS, they mentioned that Cadillac, apart from years 2005 and 2007, beat BMW. Then things started getting hot under the bonnet.

“Sure, but BMW will blow the doors off Cadillac, right? Apparently not. In a “run what ya brung” challenge race last October, Caddy’s CTS-V took first, second and third. The highest-finishing BMW was an M3 in fourth. BMW declined at the time to send a factory-backed car and driver because it was a GM-sponsored event rather than a neutral competitive setting. Still the showdown was open to all production-stock (unmodified) cars, so, theoretically at least, it was a fair fight.”

Now whilst these are all valid points, there’s one point which USA Today doesn’t mention. In August 2010, The US public bought 12,689 Cadillacs. In comparison, 19,450 BMW’s were purchased. So, even with those points which USA Today raised, the US public isn’t buying it, literally. But, I think that USA Today was extremely harsh. I don’t think Dan Akerson meant anything by that comment (if he did say it, GM won’t confirm it). I like bashing a GM CEO as much as the next person, but give him a chance!

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