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Blunt Outsider Jump-Starts Staid GM With Volt of Energy
Bill Vlasic | December 09, 2011

GM CEO Daniel Akerson is a former private equity executive. (Agency Photo) GM CEO Daniel Akerson is a former private equity executive. (Agency Photo)
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Detroit, Michigan. Late last month, the top executives of General Motors convened for an emergency conference call. The topic: How to respond to a federal investigation of GM’s pride and joy, the Chevrolet Volt plug-in hybrid.

GM’s chief executive, Daniel F. Akerson, led the discussion from his home in Virginia, where his family had gathered for Thanksgiving. This was his first big crisis in 15 months as leader of the nation’s largest automaker, and Akerson wanted to act quickly.

“This could be a defining moment for us,” he said, according to one participant on the call.

After debating their options, the executives decided to publicly defend the Volt’s safety, and take the unusual step of offering free loaner cars to owners during the government’s inquiry into possible postcrash fires in the Volt’s lithium-ion battery.

It was an aggressive — and potentially risky — strategy for any car company in the midst of a safety inquiry. “It was very much out of the box,” said one analyst, Joseph Phillippi of the firm Auto Trends.

The inbred car culture of Detroit has been shaken up quite a bit in recent years. Alan Mulally left the aircraft maker Boeing to instill fresh thinking at Ford, and Sergio Marchionne, the Italian-Canadian head of Fiat, has brought a newfound discipline to Chrysler.

But neither is having a bigger impact than Akerson is at GM, where senior executives for generations adhered to a strict code of conformity and predictability. A 63-year-old former private equity executive, Akerson is bent on defining himself as anything but a traditional auto executive.

“He is a very impatient guy,” said David Cole, chairman emeritus of the Center for Automotive Research and the son of a former GM president. “But I think he’s learning that there is a balance between doing things quickly and understanding how complex this industry is.”

The problems with the Volt are a case in point. A few days after the conference call, Akerson went well beyond the discussion that day and said that GM was willing to buy back Volts from concerned owners. Back in Detroit, company officials scrambled to explain the offer as a gesture of good will to its customers, denying that Akerson was setting policy on the fly.

Akerson has been unavailable to the media since his comments on the Volt. But in a recent interview, he made no apologies for his outspoken style and unconventional approach.

“I guess being new is both an advantage and a disadvantage because I kind of look at things a little bit differently than everybody else,” he said. “I don’t have the history.”

Akerson is aware that GM still carries a stigma of being slow and unresponsive. To accelerate decisions, he has eliminated about 30 internal boards and committees. And he is characteristically blunt in describing how GM was run before it was bailed out by the federal government.

“This place lacked a lot of vision,” he said in his 39th-floor office at GM headquarters. “They were all over the map. Where was the vision? Where do you want to take this company?”

Since taking the top job in September 2010, Akerson has led GM through its public stock offering and guided this summer’s successful labor talks with the United Auto Workers.

But he faces many challenges ahead, from finding a fix for the Volt’s battery problems to cementing GM’s fragile comeback since emerging from its government-financed bankruptcy two years ago.

Despite improving sales and seven straight profitable quarters, GM’s stock price is languishing around $20 after going public at $33. And because US taxpayers still own a 26 percent stake in GM, the company is finding it tough to shed its distasteful image as “Government Motors.”

Analysts say that investors are still skittish about GM because its decades-long decline is still fresh in their minds. “People are very sensitive for early warning signs that the ‘old GM’ is still there,” said Brian Johnson of Barclays Capital.

Akerson is pushing hard to improve GM’s brands, notably by expanding the Cadillac lineup and increasing its international sales. He has also taken a personal interest in the Volt, challenging engineers to cut $10,000 in costs from the $40,000 car, and bolstering production from 15,000 vehicles this year to 60,000 in 2012.

It’s an ambitious goal given that the Volt will fall short this year of its target of 10,000 sales in the United States. But Akerson is undaunted by the lukewarm reception in the marketplace for cars powered primarily by batteries. He predicts that by 2020, 10 percent of GM’s vehicles “will have electric as a major part of their propulsion.”

Inside GM, Akerson’s decisive personality has taken some getting used to.

Product planners were initially stunned by his demands to reduce GM’s range of vehicle platforms and engines, and some employees were angered when he criticized people for leaving work too early. His methods were often contrasted to those of Rick Wagoner, GM’s longtime chief executive, who was forced out by the Obama administration in 2009.

“He’s a lot tougher than Wagoner,” said one executive, who spoke on the condition that he not be named because he was not authorized to speak publicly.

Akerson responded: “I was the big unknown, and there was a degree of defensiveness. I think we’re all past that.”

The New York Times