To Get Past Its Crisis, GM Is Forced To Rely On The Findings of Strangers

Jun 8 2014, 9:38am CDT | by

For much of its 106 year history, General Motors was the ultimate insular company. It decided how things were done in Detroit, and others simply followed.

GM didn’t need to hire from elsewhere. Its men (and later women) started their careers in college at the General Motors Institute,  now known as Kettering University, holding their first GM jobs before they received their diplomas.

They didn’t need to work elsewhere, either, because the climb at GM required decades on a well-worn path to the top. Promising managers accepted the assignments the company felt they should have, latching on to executives who could groom them.

Even as the auto industry became more complex and its ranks more diverse, GM was notable for the number of senior leaders with decades of just GM experience. There was a GM way of doing things, nothing like the breezy culture at Chrysler or the patrician attitude at Ford, where new faces made regular appearances.

Then came 2009, when GM’s world came crashing down around it. The CEO, a company lifer, was fired. So was his GM lifer replacement. Turnaround experts hired by the Obama Administration swooped in to lead GM through bankruptcy, and supposedly out of it with a new approach.

Only five years later did a long-time GM employee, Mary Barra, finally get control of the company again, sending a welcome inside signal that GM people were once again in charge. 2014 was supposed to be the year when GM proved it had changed for good, and could now move forward under the leadership of one of its own.

Instead, as with the bankruptcy, Barra is forced to rely on the findings of strangers in order to get past GM’s crisis.

The first such step came Thursday, when attorney Anton Valukas issued his 325-page report on the company’s failure to acknowledge, and remedy ignition defects on Chevrolet, Saturn and Pontiac small cars.

The Valukas Report is loaded with examples of how little GM’s culture has changed, despite Barra’s insistence that she is leading a new GM. The “GM Nod” and “GM Salute,” both methods of stalling action. are now entering dictionaries of corporate traits.

Soon, Valukas’ disclosures will be joined by another round from Kenneth Feinberg, who has been charged with determining who should be considered a victim of the GM ignition defects, and how much compensation they or their survivors should receive.

Based on his work with the 9/11 attacks and the BP oil spill, Feinberg has plenty of experience cutting to the chase and coming up with numbers that otherwise might take years of litigation.

By turning to well-known experts, GM is sending a message that it is willing to bring in others to take an objective look at its situation. And while members of Congress can’t really be called objective, it’s likely they, too, will be shining even more sunlight  on the mysterious workings of the company as hearings into the defects continue.

That’s a sea change for a company where insiders long argued that nobody could understand GM except GMers. Back in 1995, I wrote my first book, Collision Course , about the near-miss that GM had with bankruptcy in 1992. An up and coming GM executive, who had been helpful in my research, took me aside when the book came out.

“Why are you so concerned about culture?” he asked me. “Nobody cares about that soft, sucky stuff.”

As it turns out, GM’s culture has been its Achilles’ Heel, unchanged by bankruptcy, and as Valukas disclosed last week, intransigent despite the seeming urgency of needing to find a solution for the ignition defect.

It will be the findings of these strangers that have the best chance of creating “new GM” Barra has declared she is leading. But, will GM be able to stand the light of their lantern, or will it retreat into its old culture once more?/>/>

GM's Recall Crisis


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