Editorial: Why GM Doesn't Need A "Car Guy" CEO

Michael Karesh
by Michael Karesh

Car guys know exactly what’s wrong with GM: car guys like them aren’t running the show. Otherwise, every Chevrolet, GMC, Buick, and Cadillac would look “great” (no need to be more specific) and dust the competition. Hence Bill Ford’s decision to hire Alan Mulally to take over as CEO came as a real disappointment. Obviously, he would have done better hiring anyone who truly knows and loves cars better than a Lexus-driving Boeing executive.

Sorry, CarNut4CEO. It just wasn’t so in Ford’s case. And it’s just not so in GM’s case, either.

Every auto enthusiast has done it. We’ve all figured we’d do a much better job running GM than the suits in the Ren Cen. In design competitions, we’d pick the sexy themes, not the ugly ones. Focus groups wouldn’t have a say. We’d command the engineers to create direct-injected twin-charged dual-variable-cammed engines that rev smooth as silk and sing songs of pure adrenaline. There’d be no more slushboxes. No more front-wheel-drive, either. Every suspension would be firmly damped. Every bucket seat would be solidly bolstered. Cheap plastic would be banned and every bit of trim perfectly aligned.

The problem is, most car buyers don’t know much about VVT. What they do know is they aren’t going to pay much for things that have no obvious impact on getting from Point A to Point B. Their eyes, fingertips and rear ends don’t see and feel the same things as those of car guys.

What do most car buyers want? Guess at your own peril. You can scrape the surface by asking them. You can observe how they use their cars at rest stops and parking lots. You can try to walk in their shoes, perhaps even going so far as to don costumes that simulate the experience of being encumbered by arthritis, pregnancy, or nails and heels. Do this long enough and intensively enough, and you might figure them out. Then you’ve got to translate what you’ve learned into the thousands of details that comprise a car — from the curve of the fender to every last button and switch. Do this right and all of these bits cohere into a “gotta have” for that car buyer (who hopefully isn’t unique).

You don’t have nearly enough time to do all of this yourself. The thousands of decisions that constitute an automobile’s design require contributions from hundreds of people. Ideally, the people who know the customer and the people who style and engineer all of the bits work together seamlessly, accepting and melding one another’s expertise to create an appealing, coherent whole. And let’s not forget the dreaded “bean counters”: this whole has to be affordable. Achieving this synthesis might be the most difficult task in the world.

Nor can you simply hire the best and the brightest and simply toss them into a room together. A program team needs a leader to pull everyone together around a customer-based product vision. Even this mid-level executive can’t know everything or get fully involved in every decision. He’s got to develop a team capable of creating this synthesis, and he’s got to be able to let them do it.

GM’s CEO is at least three levels removed from the corporation’s product program managers, who are themselves a few levels above the grunts in the trenches. If, after a twenty-slide PowerPoint presentation, this CEO can make better decisions about product details than the team that has lived and breathed the product and market, then something is wrong. It doesn’t matter how car-smart this CEO is. If the program team is decent, then no exec’s that brilliant. If the team isn’t decent, then game over.

Nevertheless, senior car company execs frequently step in and make such decisions. The media legitimizes this meddling, lauding gutsy top execs who make snap product decisions. There’s no glory in letting the grunts do their jobs. Finally, corporate politics can push each executive to prove that he knows more than the other guy does while second-guessing every decision the other guy makes.

In this environment, it takes a tough exec to let the experts be the experts, to put the processes and organization in place that will foster great teams and let these teams do their job. This strategy isn’t romantic. It doesn’t make for dramatic headlines. It’s not something that those of us outside a car company can see and comprehend. It’s just what Ford got with Mulally and what GM needs from its new CEO.

Michael Karesh
Michael Karesh

Michael Karesh lives in West Bloomfield, Michigan, with his wife and three children. In 2003 he received a Ph.D. from the University of Chicago. While in Chicago he worked at the National Opinion Research Center, a leader in the field of survey research. For his doctoral thesis, he spent a year-and-a-half inside an automaker studying how and how well it understood consumers when developing new products. While pursuing the degree he taught consumer behavior and product development at Oakland University. Since 1999, he has contributed auto reviews to Epinions, where he is currently one of two people in charge of the autos section. Since earning the degree he has continued to care for his children (school, gymnastics, tae-kwan-do...) and write reviews for Epinions and, more recently, The Truth About Cars while developing TrueDelta, a vehicle reliability and price comparison site.

More by Michael Karesh

Join the conversation
2 of 75 comments
  • DearS DearS on Dec 05, 2009

    Mullally went with a Lexus instead of a Cadillac or Lincoln. I say he is more of a car guy than the average American.

  • Plugot Plugot on Dec 05, 2009

    The American auto industry is a mature business. Like most large mature companies, they're run by suits. The inspiration and drive came from the first, and occasionally, the second generation of leadership. Those were the guys (yes, they were all guys) who had vision and purpose. The companies they created often bore their name, or at least their family's name. Eventually they die off replaced by the next generation of management which may have lingering commitment to the values of the founders. They in turn are replaced by the corporate MBAs who major in financial management and could just as easily be selling tampons as trucks. Maybe both, depending on the corporation. Their only commitment is to the fabled "bottom line" which generally translates as "the most for me, and screw everybody else". In America today the corporate managers have managed to rob the wealth of the society, invest in the cheapest labor they can find, and maximize their own personal wealth. GM's decline started decades ago. It just doesn't have decades to rebuild itself. As much as I love the idea of American cars, I really don't like too much of their actual product. It's pretty hard to be inspired by spreadsheets. That's why Apple turned around after the return of Steve Jobs. Maybe Willie Durant should come back from the grave and take over GM. It couldn't be worse.

  • Pau65792686 I think there is a need for more sedans. Some people would rather drive a car over SUV’s or CUV’s. If Honda and Toyota can do it why not American brands. We need more affordable sedans.
  • Tassos Obsolete relic is NOT a used car.It might have attracted some buyers in ITS DAY, 1985, 40 years ago, but NOT today, unless you are a damned fool.
  • Stan Reither Jr. Part throttle efficiency was mentioned earlier in a postThis type of reciprocating engine opens the door to achieve(slightly) variable stroke which would provide variable mechanical compression ratio adjustments for high vacuum (light load) or boost(power) conditions IMO
  • Joe65688619 Keep in mind some of these suppliers are not just supplying parts, but assembled components (easy example is transmissions). But there are far more, and the more they are electronically connected and integrated with rest of the platform the more complex to design, engineer, and manufacture. Most contract manufacturers don't make a lot of money in the design and engineering space because their customers to that. Commodity components can be sourced anywhere, but there are only a handful of contract manufacturers (usually diversified companies that build all kinds of stuff for other brands) can engineer and build the more complex components, especially with electronics. Every single new car I've purchased in the last few years has had some sort of electronic component issue: Infinti (battery drain caused by software bug and poorly grounded wires), Acura (radio hiss, pops, burps, dash and infotainment screens occasionally throw errors and the ignition must be killed to reboot them, voice nav, whether using the car's system or CarPlay can't seem to make up its mind as to which speakers to use and how loud, even using the same app on the same trip - I almost jumped in my seat once), GMC drivetrain EMF causing a whine in the speakers that even when "off" that phased with engine RPM), Nissan (didn't have issues until 120K miles, but occassionally blew fuses for interior components - likely not a manufacturing defect other than a short developed somewhere, but on a high-mileage car that was mechanically sound was too expensive to fix (a lot of trial and error and tracing connections = labor costs). What I suspect will happen is that only the largest commodity suppliers that can really leverage their supply chain will remain, and for the more complex components (think bumper assemblies or the electronics for them supporting all kinds of sensors) will likley consolidate to a handful of manufacturers who may eventually specialize in what they produce. This is part of the reason why seemingly minor crashes cost so much - an auto brand does nst have the parts on hand to replace an integrated sensor , nor the expertice as they never built them, but bought them). And their suppliers, in attempt to cut costs, build them in way that is cheap to manufacture (not necessarily poorly bulit) but difficult to replace without swapping entire assemblies or units).I've love to see an article on repair costs and how those are impacting insurance rates. You almost need gap insurance now because of how quickly cars depreciate yet remain expensive to fix (orders more to originally build, in some cases). No way I would buy a CyberTruck - don't want one, but if I did, this would stop me. And it's not just EVs.
  • Joe65688619 I agree there should be more sedans, but recognize the trend. There's still a market for performance oriented-drivers. IMHO a low budget sedan will always be outsold by a low budget SUV. But a sports sedan, or a well executed mid-level sedan (the Accord and Camry) work. Smaller market for large sedans except I think for an older population. What I'm hoping to see is some consolidation across brands - the TLX for example is not selling well, but if it was offered only in the up-level configurations it would not be competing with it's Honda sibling. I know that makes the market smaller and niche, but that was the original purpose of the "luxury" brands - badge-engineering an existing platform at a relatively lower cost than a different car and sell it with a higher margin for buyers willing and able to pay for them. Also creates some "brand cachet." But smart buyers know that simple badging and slightly better interiors are usually not worth the cost. Put the innovative tech in the higher-end brands first, differentiate they drivetrain so it's "better" (the RDX sells well for Acura, same motor and tranmission, added turbo which makes a notable difference compared to the CRV). The sedan in many Western European countries is the "family car" as opposed to micro and compact crossovers (which still sell big, but can usually seat no more than a compact sedan).