Inside The Mind Of Dan Akerson

Edward Niedermeyer
by Edward Niedermeyer

The Detroit News snagged a lengthy interview with GM CEO Dan Akerson, giving observers one of the first in-depth looks at the man who will be leading The General for the next three to four years. The interview is to lengthy to summarize here, but there are a few items that are worth noting…

For one thing, Akerson has some serious ambitions and doesn’t mind sharing them with the world.

There are a couple milestones in my tenure I want to accomplish. I want to earn $10 billion a year profit. I want get the U.S. pension fund to fully funded — and we’re making real progress there. I want to make Europe profitable on a sustainable basis.

None of these are going to be easy to accomplish. A $10b profit would require a doubling of GM’s performance last year, and the other goals (particularly in regards to the troubled European operations) will divert a huge amount of cash. Meanwhile, the old GM challenge of “culture change” continues to be one of Akerson’s top priorities as well, as he seeks to develop a competitive atmosphere and break down the tradition of “boss worship” which holds back the necessary give-and-take.

But possibly the biggest challenge Akerson faces has to do with GM’s product, and the DetN includes a separate write-up of Akerson’s thoughts on the matter. Speed of development is one of his major changes, and he acknowledges that his desire to pull forward development of the 2013 Chevrolet Malibu faced internal dissent (which he overruled, raising questions about the alleged death of “boss worship” at GM).

On the issue of fuel economy, he argues that the Chevrolet Volt

is a novelty (today), but it won’t be in five years. It’s going to be an old, old technology and old news.

He also says ethanol will “die slowly” and hints that GM will eventually start selling dual-fuel commercial vehicles, capable of running on natural gas or gasoline. Akerson also says that

we’re not going to do these big, heavy trucks that are making 15 miles, 12 miles to a gallon.

Which, given rising CAFE standards and gas prices, comes as no real surprise. It does, however, create some challenges to his goal of $10b annual profits, as much of GM’s profit traditionally comes from the sale of large trucks, and fuel-economy-improvement-related cost increases for pickups are projected to be costly.

Akerson made a few surprising statements on the luxury front, including a perplexing assessment of Cadillac’s next two vehicles, the XTS and ATS, which he says

are not going to blow the doors off, but they will be very competitive.

Whatever that means. And despite his apparent lack of confidence in the next generation of Caddies, he still took a potshot at Ford, saying

They are trying like hell to resurrect Lincoln. Well, I might as well tell you, you might as well sprinkle holy water. It’s over

In general, Akerson comes across as quite candid, possibly overly so (though you won’t hear us complaining about it). But for all his ambitions, he offers relatively little in the way of specific strategies to accomplish them. For example, his desire to make GM more like Toyota is hardly a “strategy,” as every automaker has been studying and trying to replicate Toyota’s success for decades. Speeding up development is an indication of his approach, but it brings with it worries about future quality. Similarly his desire to compete with every Volkswagen model while simultaneously downsizing and restructuring Opel sounds like a tough balancing act. But then, when it comes to turning around a company as large and perennially troubled as GM, ambitious goals and tough strategies are the only way forward.

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7 of 53 comments
  • Bridge2farr Bridge2farr on Jun 07, 2011

    The "Best and Brightest" at their "objective" best here! Free potshots at GM for everyone!

    • See 1 previous
    • Geozinger Geozinger on Jun 08, 2011

      @Bridge: Look at the venom being aimed at Ford in the post about the QC issues. Considering the amount of praise Ford usually gets here, it seems excessive. Much more heat than light being generated. This is SOP for the B&B.

  • MikeAR MikeAR on Jun 08, 2011

    Pete DeLorenzo at Autoextremeist really lays into Dan today. It's worth a read.

    • See 2 previous
    • Mike978 Mike978 on Jun 08, 2011

      @psarhjinian I enjoy reading autoextremist too. DeLorenzo usually makes good points and is an equal opportunity offender (VW, Hyundai etc) but he does get stuff wrong. He thought Hyundai/Kia under Krafik would not do well and he regularly expounds on how VW will fail. Both seem unlikely at this time.

  • Tassos Chinese owned Vollvo-Geely must have the best PR department of all automakers. A TINY maker with only 0.5-0.8% market share in the US, it is in the news every day.I have lost count how many different models Volvo has, and it is shocking how FEW of each miserable one it sells in the US market.Approximately, it sells as many units (TOTAL) as is the total number of loser models it offers.
  • ToolGuy Seems pretty reasonable to me. (Sorry)
  • Luke42 When I moved from Virginia to Illinois, the lack of vehicle safety inspections was a big deal to me. I thought it would be a big change.However, nobody drives around in an unsafe car when they have the money to get their car fixed and driving safely.Also, Virginia's inspection regimine only meant that a car was safe to drive one day a year.Having lived with and without automotive safety inspections, my confusion is that they don't really matter that much.What does matter is preventing poverty in your state, and Illinois' generally pro-union political climate does more for automotive safety (by ensuring fair wages for tradespeople) than ticketing poor people for not having enough money to maintain their cars.
  • ToolGuy When you are pulled over for speeding, whether you are given a ticket or not should depend on how attractive you are.Source: My sister 😉
  • Kcflyer What Toyota needs is a true full size body on frame suv to compete with the Expedition and Suburban and their badge engineered brethren. The new sequoia and LX are too compromised in capacity by their off road capabilities that most buyers will never use.