Jun 10 2014, 5:42am CDT | by Forbes
Last week, the results of a General Motors investigation into how a recall crisis festered were released. “The GM nod” phase became popular to explain how the largest U.S. automaker could fail to act on a pressing problem.
Once again, GM’s corporate culture came under examination. The “GM nod” referred to how managers could nod that, yes, something needed to be done but left a meeting not doing anything.
The thing is, many people had a chance to change the culture. At various times, GM assured the public it really, really was going to do things differently this time. Here’s a (partial) list of people who thought they changed GM.
Robert Stempel, CEO: Stempel succeeded Roger Smith as GM’s chief in 1990. Smith had spent billions of dollars and created a new brand (Saturn). By the time Smith retired, GM’s financial strength had weakened and its share of the U.S. vehicle market was sliding.
In his first public appearance as CEO, Stempel had a news conference in Detroit. To demonstrate how his reign would be different from Smith’s, Stempel brought along his lieutenants and the press conference stressed team work repeatedly. The idea was to establish a symbol of how GM had changed.
Reporters attending the press conference had set up a pool for the number of times the words “team” or “team work” would be uttered.
Unfortunately for Stempel and GM, things got worse. The first Gulf War and a recession slammed vehicle sales. GM’s board soured on Stempel. The GM lifer was deposed in 1992. That led to…
Jack Smith, CEO: Smith was the board’s choice to take over for Stempel. At the time, Smith’s time as CEO seemed to be a rousing success. GM avoided financial ruin — something that people weren’t certain of during Stempel’s time as CEO. GM eventually began to generate profits and Smith became a GM hero.
Looking back, there’s a natural question. How much of the comeback stemmed from Smith’s decisions as CEO and how much was the rise of sport-utility vehicles as a profit source for U.S. automakers. SUVs helped the bottom lines of GM, Ford Motor and Chrysler. Also, the three companies had big profits from large pickups. By the end of the 1990s, Detroit’s automakers were more truckmakers than automakers. Meanwhile, the surge in profits relieved the pressure to change GM’s culture.
Also, the story of a CEO’s tenure isn’t settled until you see what happens afterward. That led to…
Rick Wagoner, CEO: Wagoner’s career got a lift when Smith took over. Wagoner took over for Smith as CEO in 2000. Initially, Smith stayed around as non-executive chairman, but later Wagoner took that title as well.
Wagoner, in his public pronouncements, said he was aware of GM’s challenges. In 2004, GM held a press briefing in France ahead of the Paris Motor Show. Wagoner laid out how GM was addressing its various challenges. But the picture he painted was of a gradual approach. Rather than a crisis atmosphere, Wagoner projected a steady hand on the GM wheel.
That was fine as long as GM’s home market in the United States cruised along during most of the 2000s. By 2008, however, a financial crisis meant a big drop in sales. GM, during the decade, sold off units either in whole or in part to generate cash. With the financial crisis, the gradual approach wasn’t going to work. That led to…
The Obama administration: President Barack Obama moved to bail out GM and Chrysler. The administration had one price: Wagoner had to go. So he did. The bailout took the form of a U.S.-backed bankruptcy. Technically a “new” GM was created while “old GM” would dispose of assets in bankruptcy court that wouldn’t be part of the “new” company. Brands such as Pontiac and Saturn were gone.
During the 2008 presidential campaign, GM being alive was cited by the Obama campaign as one of President Barack Obama’s main accomplishments. GM’s 2009 bankruptcy was short — so short, there really wasn’t enough time to address the culture issue. Which led to…
GM management post-bankruptcy: Fritz Henderson became CEO after Wagoner got the boot. But the chairman of the new board of “new GM,” former AT&T Ed Whitacre, decided there was somebody better: namely, Ed Whitacre. So he took the helm as CEO in late 2009.
Whitacre, though, soon decided he didn’t want to stay long enough to supervise “new GM’s” return to selling stock to the public. So Whitacre in 2010 yielded to another new director, former telecommunications executive Dan Akerson. Akerson, an ex-Navy officer, was supposed to really, really change the GM culture this time./>/>
Except, based on the report released last week, he really didn’t. Or at least not all that thoroughly. Based on the report, no GM CEO was actually aware of the recall problem until Akerson’s successor, current chief Mary Barra, found out at the end of January.
Once again, a GM CEO is saying things will be really, really different this time. Perhaps. But for that to become reality, Mary Barra has to defy a lot of GM history.
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