GM is emerging from its old shell; more is needed

No one would be foolish enough to suggest General Motors is in a full-blown recovery. But there are a few encouraging signs that GM's top executives at least understand the problems and have an idea of what needs to be done.

A lot of what is happening involves attitude. Gone is at least some of that old GM arrogance, which often fostered the belief that the rest of the world must be wrong.

A quarter of a century ago, Canadian labor leader Dennis McDermott quipped that GM execs around the world were all the same, like cookies out of the same jar. He was right. But that is changing slowly.

Adding Robert Lutz to the team - he joins the payroll this week as vice chairman in charge of product development - was a bold stroke, even though he signed on for only a three-year hitch.

Lutz joins a cadre of leaders who, at the behest of CEO Rick Wagoner, are rebuilding relations with GM's key stakeholder groups, although much still needs to be done in all areas: labor relations, dealer relations, supplier relations and Wall Street relations. GM trails the industry leaders in productivity. Some dealers and suppliers still feel like they're being hammered. GM's stock price and shareholder value need bolstering.

And none of that will matter if Lutz can't inspire product changes that improve GM's relations with the most important stakeholders: car shoppers.

For Wagoner and his team, implementing real change inside GM remains the biggest challenge. Part of GM's current dilemma is that for decades, its bureaucracy - frequently referred to as the "frozen middle" - has resisted real change in much the same way that some virus strains have become resistant to antibiotics.

That must change quickly. GM must build on the improving relations with its stakeholders. GM might be tempted to declare victory, but upon careful reflection, it's not time to do it just yet.



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