GM's uphill climb to claim the peak

[RBB]

Originally printed in the Detroit Free Press, this story made its way to our local paper, too:

http://www.stltoday.com/stltoday/business/...FE?OpenDocument

GM's uphill climb to claim the peak

By Mark Phelan

DETROIT FREE PRESS

12/26/2007

DETROIT — How did GM get its mojo back?

Two ways, as a character in a Hemingway novel said when asked how he went bankrupt: Gradually and then suddenly.

Profound change takes place in increments, whether in an individual or an organization. The improvement can be unnoticeable until it becomes too great to ignore.

With the new Chevrolet Malibu car and Buick Enclave sport wagon it's clear: General Motors Corp. can once again be counted on to build some of the world's best vehicles.

"The cars and trucks GM has introduced over the last three model years or so stand alongside the best the company did in the 1950s and '60s when GM was the peak of styling and innovation," said Joe Phillippi, an analyst who has advised investors about automakers since 1968 and is principal of AutoTrends Consulting in Short Hills, N.J.

The Enclave and Malibu are the consummation of an agonizingly slow process in which the world's largest automaker completely reworked the way it designs and develops new cars and trucks.

There's never been a shortage of talented engineers and designers at GM, but for decades, the company's processes, politics and management blocked creativity and innovation, throwing one roadblock after another in front of the people who simply wanted to build great vehicles.

The great challenge facing GM now is to institutionalize the processes that led to vehicles like the Enclave and Malibu and the Saturn Aura car and Chevrolet Silverado pickup.

The changes that led to GM's improved vehicles are now ingrained in the company as official policy:

•One executive is responsible for each family of vehicles.

•Each of GM's global engineering centers concentrates on the kind of vehicles it does best, such as trucks in North America or mid-size and compact cars in Europe.

•The goal for each new vehicle is to be the best in its class, rather than simply hoping to be competitive.

For many years at GM, creating a great vehicle was seen as a steppingstone to a better job rather than an end in itself.

The company began to address that in the mid-1990s with its vehicle line executive structure. The VLE is the executive who has responsibility for developing an architecture, GM's term for the underpinnings for a family of cars or trucks.

This executive's 10-year tenure is enough time to see an architecture from inception through its first face-lift.

Before VLEs, no individual bore ultimate responsibility for new vehicles. It was common for executives to move in and out of key development jobs in a year or two, too quickly to learn the job or have much impact.

VLEs who have delivered successful model lines include Gene Stefanyshyn, who developed the Epsilon architecture for the Malibu, Aura and Saab 9-3, and Anna Kretz, responsible for the Enclave, GMC Acadia and Saturn Outlook crossover SUVs.

Some of the credit for the VLE structure goes to GM Chief Executive Rick Wagoner, who ran GM's North American operations when the system began.

Wagoner put in place two other executives who played key roles in GM's current resurgence: design chief Ed Welburn and Vice Chairman Bob Lutz.

Under Welburn, GM has developed an extraordinarily wide range of attractive vehicles, ranging from the big Cadillac Escalade to the Chevrolet Aveo and Opel Corsa subcompacts.

He has reorganized GM's global design staff and reinforced the identity of GM's brands, creating a global face for Chevrolet, a contemporary new look for Cadillac and shared transatlantic styling for Saturn and Opel, and laying the groundwork for Buick to regain the status it once held as desirable and prestigious.

The outspoken Lutz, who described a GM concept car as looking like "an angry appliance" — a clear reference to the Pontiac Aztek SUV — joined the company in 2001.

"There was a level of mediocrity that GM accepted," said analyst Rebecca Lindland of Global Insight in Lexington, Mass. "Bob Lutz rejected that and empowered people to do better. He puts the burden on you to create excellence, and he recognizes and rewards it when you do."

His time at GM has spawned plenty of stories, but one in particular illustrates Wagoner's wisdom in hiring a high-powered outsider to shake things up.

Lutz thought the gaps between the metal panels on a car GM planned to build were too big. They looked sloppy. He began one of his famous tirades, continuing until the executive in charge of making the panels said in exasperation, "Just tell me what you want."

"Gaps that are no more than 3MM wide," Lutz replied.

"OK. I can do that," the executive replied.

"Well, why didn't you do it before?" Lutz said.

"Nobody asked."

Lutz's impact has spread throughout GM, but the company's success relies too much on his presence, Hall said.

"Bob's gotten the organization to pay attention to the right stuff, but it's still not institutionalized beyond Lutz driving it," he said. "GM must build a process where making the best vehicle is the No. 1 concern."

-RBB

[Camino LS6]

Love it!

[Dsuupr]

The only way I see fit is to prep someone to replace LUtz that is similar to him.

[avant1963]

How's "The Truth About Cars" GM Deathwatch series going? There's plenty of journalism over there huh?

[Drew Dowdell]

The only way I see fit is to prep someone to replace LUtz that is similar to him.

I volunteer.

[CARBIZ]

I guess being #1 for 75 years can eventually go to your head, eh? Perhaps this sudden brush with death (in '05) has been a good wake up call. Many large corporations suffer from the same kind of malady: nobody is really in charge and the head honchos brought in from outside to shake things up usually have such amazing 'golden parchutes' that they don't really give a damn if they succeed in turning the company around either. It would take someone with a really big ego like Lutz who is as concerned about his reputation and legacy as he is about money to truly make a difference.

But there is no denying that the 'good news' if building. Let's just hope that any economic downturn in '08 does not derail GM's momentum.

[A Horse With No Name]

Be nice if it was someone other than the Detroit Free Press saying this...not that they can't be trusted...just that they are usually pro-domestic.

Be glad when I see this kind of thing in other, less friendly sources.

Still nice to see none the less.

Chris

[bowtie_dude]

Great article.

[ellives]

Be nice if it was someone other than the Detroit Free Press saying this...not that they can't be trusted...just that they are usually pro-domestic.

Be glad when I see this kind of thing in other, less friendly sources.

Still nice to see none the less.

Chris

The DFP has been relatively unfriendly in the past as well. Nevertheless it's great to see some positive momentum in a number of areas for GM. Let's get the Volt out the door!

[A Horse With No Name]

Volt would be huge for GM...

Chris

[BuddyP]

"Gaps that are no more than 3MM wide," Lutz replied.

"OK. I can do that," the executive replied.

"Well, why didn't you do it before?" Lutz said.

"Nobody asked."

Nobody should ever have to ask for details like these.... this executive needs to be fired.

[Northstar]

Nobody should ever have to ask for details like these.... this executive needs to be fired.

Agreed. It's no wonder things take so long to get done at GM... Lutz has to tell in the people that are supposed to know what they're doing what to do.

[aldw]

Wolfgang Bernhard would have been a great Lutz successor, too bad he's unavailable having to help fix Chrysler.

[VenSeattle]

Wolfgang Bernhard would have been a great Lutz successor, too bad he's unavailable having to help fix Chrysler.

That probably means he'll be available in 2010 around the time Lutz retires. :rotflmao:

[Camino LS6]

The replacement for Lutz is the most critical personnel decision GM has on its plate going forward. Let's hope that they choose wisely.

[enzl]

The replacement for Lutz is the most critical personnel decision GM has on its plate going forward. Let's hope that they choose wisely.

Isn't Wolfgang Bernhardt (sp?) a free agent right now?

He would fit on the product side---and perhaps help 'internationalize' some of the larger platforms so they can be exported to Europe. It would make the transition to the post-Lutz era easier to have him around now---and ensure continuity if Lutz was to fall ill.

Perhaps it makes too much sense for GM's Board or too much competition for Waggoner? It would gel nicely with replacing his ass as well.

[Camino LS6]

Isn't Wolfgang Bernhardt (sp?) a free agent right now?

He would fit on the product side---and perhaps help 'internationalize' some of the larger platforms so they can be exported to Europe. It would make the transition to the post-Lutz era easier to have him around now---and ensure continuity if Lutz was to fall ill.

Perhaps it makes too much sense for GM's Board or too much competition for Waggoner? It would gel nicely with replacing his ass as well.

A much worse choice may already have been made.

[Z-06]

Agreed. It's no wonder things take so long to get done at GM... Lutz has to tell in the people that are supposed to know what they're doing what to do.

That sounds like an assembly line robot not a thinking executive.

Panel Gap = 3mm <Enter>

Panel Gap achieved

It is the accountants and the middlemen scrooges who destroyed GM in the 80's and 90's.

If it had not been for Wagoner and Lutz and co. it certainly would be FUBAR.

[gm4life]

Sounds good to me.

[AxelTheRed]

"Gaps that are no more than 3MM wide," Lutz replied.

"OK. I can do that," the executive replied.

"Well, why didn't you do it before?" Lutz said.

"Nobody asked."

Really? Someone actually needed to be told "Hey, how's about trying to make it NOT look like crap"?

[ellives]

"Gaps that are no more than 3MM wide," Lutz replied.

"OK. I can do that," the executive replied.

"Well, why didn't you do it before?" Lutz said.

"Nobody asked."

Really? Someone actually needed to be told "Hey, how's about trying to make it NOT look like crap"?

I find it humorous, you of all posters here would make this comment and have a signature "solidarity forever" (apparently in support of unions.)

Unions foster the kind of behavior you're criticizing. They espouse the "just do as you're told" mentality where independent thinking is frowned upon. I have heard so many times conversations amongst union guys pointing out obvious flaws or problems while indicating the intent "not to do anything about it until asked."

I'm sure no one ever said, until recently, "Hey, how's about trying to make it NOT look like crap" so no one ever did anything about it until now. This, all the while snickering quietly about the problems, and watching the Company slowly slide down the tubes. Who cares? I'll be out by the time the &#036;h&#33; hits the fan, right?

[AxelTheRed]

I find it humorous, you of all posters here would make this comment and have a signature "solidarity forever" (apparently in support of unions.)

Unions foster the kind of behavior you're criticizing. They espouse the "just do as you're told" mentality where independent thinking is frowned upon. I have heard so many times conversations amongst union guys pointing out obvious flaws or problems while indicating the intent "not to do anything about it until asked."

I'm sure no one ever said, until recently, "Hey, how's about trying to make it NOT look like crap" so no one ever did anything about it until now. This, all the while snickering quietly about the problems, and watching the Company slowly slide down the tubes. Who cares? I'll be out by the time the &#036;h&#33; hits the fan, right?

There's always a bad attitude about you whenever it comes to me.

And yeah, you're right. The executive should've done what he was told, regardless of what I said. Of course, something like the width of the panel gaps really should have been taken care of during the product development. If all the bases weren't covered then, there are serious problems that need to be addressed.

As far as the union members who don't do whatever until they're asked...in any job, especially one that would need a union, how much does the management bash the "do only what you're told and never question it" mantra into your head?

Every job I've had (and I've never been in a union), has had that mentality to some extent, and I know the feeling exactly.

Is it a good thing to do? Of course not, but I've felt that way before and so has every worker everywhere at some point. The feeling isn't just delegated to union members.

And your claim that unions "frown" upon independant thinking based on "doing what they're told"...let me ask you this: Do you do what your told at YOUR job or do you just do whatever the hell you please? Because I know what would happen to me if I started doing what I wanted when I wanted at my job.

Edited December 29, 2007 by AxelTheRed

[haypops]

Unions foster the kind of behavior you're criticizing. They espouse the "just do as you're told" mentality where independent thinking is frowned upon.

I think it depends. Formerly, UAW employees were empowered to stop production if there was a quality problem. However at some Chrysler facilities lower-level management was more than complacent with foot-dragging so that unnecessary overtime would be available.

[ellives]

I think it depends. Formerly, UAW employees were empowered to stop production if there was a quality problem. However at some Chrysler facilities lower-level management was more than complacent with foot-dragging so that unnecessary overtime would be available.

Shame on them. Of course, I *do* wonder exactly what recourse management has when this kind of thing is taking place? Can they fire union members?

[ellives]

There's always a bad attitude about you whenever it comes to me.

I haven't kept track so I'll have to take your word for it. I have always suspected you of being pro-union which would be one explanation.

And yeah, you're right. The executive should've done what he was told, regardless of what I said. Of course, something like the width of the panel gaps really should have been taken care of during the product development. If all the bases weren't covered then, there are serious problems that need to be addressed.

I honestly don't know what's involved in addressing panel gaps. To me it's more about quality processes and metrics like SPC techniques than it is a product development issue. Maybe others will chime in and explain how these gaps are achieved.

As far as the union members who don't do whatever until they're asked...in any job, especially one that would need a union, how much does the management bash the "do only what you're told and never question it" mantra into your head?

Every job I've had (and I've never been in a union), has had that mentality to some extent, and I know the feeling exactly.

Is it a good thing to do? Of course not, but I've felt that way before and so has every worker everywhere at some point. The feeling isn't just delegated to union members.

I agree but my point is, those misbehaving employees who aren't union members can easily be fired and the problem is solved.

And your claim that unions "frown" upon independant thinking based on "doing what they're told"...let me ask you this: Do you do what your told at YOUR job or do you just do whatever the hell you please? Because I know what would happen to me if I started doing what I wanted when I wanted at my job.

Everyone reports to someone. Even the president of the company reports to the board of directors or the stockholders or the customers. Somebody is paying the bills. I may not be a good example but I'm generally told to "complete goals" and the details of how I do this are left up to me (as long as I do it within company and ethical rules.) Even when I'm told to do something I don't agree with, I'll point out why I don't agree but of course if I'm not convincing, I'm still doing what I'm told like everyone else.

The problem comes down to the area where there's no clear cut "right and wrong" and we're discussing a difference of opinion. If I'm the boss and *my* job is on the line and there's no clearcut any, the employee is doing things *my* way - not theres. I had an employee recently who constantly told me doing certain things certain ways was "insane." I put up with it for a while but he eventually went away because we had to work as a team and he wasn't. Plain and simple. (We're not a union shop.)

Business is a cooperative effort between multiple disciplines from various walks of life. I have always felt unions foster inefficient behavior because the members do not have a stake in the financial results of the organization paying their salaries. Teachers unions are a good example and the NEA has dragged its feet while changes have been proposed such as testing and metrics. We all have known bad teachers. It infuriates me to know these dirtbags are protected by the union when even the union membership knows they're bad. My sister-in-law went from being a teacher (unionized of course) to a princpal (evil management) and it's been amazing what a change of perspective has taken place. She was describing her efforts to "get rid" of one of those bad teachers and how the "union rep" came to this bad teacher's defense. Another bad taste in everyone's mouth.

The "job bank" made so famous by the UAW is another example of the pure waste associated with unions. The list goes on. I *do* agree there is a place for unions. Otherwise management, particularly senior management, will take advantage of every opportunity to keep costs low and feather their nests. This will be at the cost of every other employee however. Something to keep in mind.