Akerson aims to make GM executives more accountable
AUTOMOTIVE NEWS: Are you looking for continued robust growth in 2013? DAN AKERSON: Yes. We would estimate somewhere in the 14 to 14.5 million [range]. I would be personally a little biased on the high end. That all presupposes that we don’t fall off the cliff because I think that could disrupt a month or a quarter.
Photo credit: BLOOMBERG
General Motors CEO Dan Akerson is steadily putting his stamp on the automaker. He has shaken up the marketing ranks and brought in new blood, such as Bob Ferguson, GM's former Washington lobbyist turned global head of Cadillac. And he continues to reorganize GM so that it will move faster, play to its global strengths and take advantage of technologies such as the connected car that can reshape the industry.
Akerson met recently at GM headquarters with Editorial Director Peter Brown, Industry Editor James B. Treece and Staff Reporter Mike Colias to talk about GM's future.
Q: Do you care about market share anymore?
A: It's a much more complicated question than that. What are you doing on incentives, what are your residuals, and what is your market share?
Prior to bankruptcy we were discounting at just unacceptably high levels, and our residuals were at unacceptably low levels. Now we're roughly average on incentives. You have to look at market share over a two-year period because 2011 was an anomaly by virtue of the tragic earthquakes and the tsunami. If you look at a "normalized" perspective, market shares haven't dramatically shifted over a 24-month period.
Will we see a global chief marketing officer again at GM?
We're going to have two global brands: Chevrolet and Cadillac. Chevrolet is pretty much globalized today. We've asked Alan Batey, who has lived in six different countries and runs North American sales and marketing -- and he's done a terrific job, really stepped up -- to fill the breach. We appointed Bob Ferguson for Cadillac.
If you assess facts, [Cadillac is] a regional brand. To be a global brand, you need global oversight. Bob has that assignment, and it's marketing now. Over time that will probably grow.
Will he have deep input on the product portfolio?
What do you need to do to be a legitimate competitor to BMW and Mercedes-Benz?
The segment of the luxury brand we need to be successful in is the small luxury segment, and that's the ATS. We think the ATS is a very capable car on every level. That being said, it's a tough segment to break into, and even Lexus when they came out with their IS, they did OK, not great. ATS is not going to be introduced into China this year. It's going to be XTS, so it is a very cadenced effort not only in this North American market but also in China initially and maybe other markets over the next couple of years.
Right now we have product in 80 percent of the luxury market. We weren't there before. I think not only the powertrains but the models we have in the small luxury and the kind of midluxury with the XTS and CTS will be refreshed in the third quarter, fourth quarter of next year. Then you'll have three good sedans, and you'll have an SUV in Escalade, so it's probably the best portfolio we've had in a generation. That doesn't mean we're going to stop there, either. We'll also add ELR at the end of next year.
How is Ferguson supposed to make people go "Ahhh, Cadillac" in the way that they go "Ahhh, BMW" around the world?
With Cadillac, we have a respectable position in North America, but we're not advantaged in North America. I think by appealing to a different demographic within the luxury category -- young, upwardly-mobile professionals -- with the ATS, XTS, CTS (Escalade is a completely different demographic than DTS), where you want to be is the two biggest markets of China and North America. China is predicted to be the biggest luxury market.
Roughly 40 percent of the luxury market will be represented in China by the end of this decade. Then we'll look at other markets as the opportunity arises.
Is there a timetable for Europe?
Yes, but it's one we don't want to discuss at this stage.
How about the BMW 7-series fighter that people have long talked about? What factors do you consider in whether to do a car like that?
The progress we make in the marketplace and re-establishing the brand not only in North America but also China is one factor. The success that we have in brand building around the world is another. How well the XTS does -- does it have legs? Is it something that could run for six years, or is it a three-year horizon? We've got to make that decision, and we have a name for it inside the company as we study the possibilities. That decision has to be made within the next 12 months: whether we launch and have something toward the latter half of the decade. This is a big bet for us.
Why did you choose a nonautomotive guy to run Cadillac?
Bob Ferguson was the president of a large, complex information technology company called Pacific Telesis. He's had profit-and-loss responsibility and not just top line responsibility.
As we see this organization evolve, we will have people with global responsibilities for certain functions that have profit and loss from top to bottom.
Bob has been in the industry, can articulate a strategy and be a good leader and has the bandwidth of having lived overseas and understands cultural differences and can look through that prism.
In the future, would you consider having a global president of Chevy akin to what Ferguson's position is now?
Yeah. We're not there yet, but you asked me if I would consider it. Yes.
For Chevy's marketing officer, would you want that same global experience?
Yes. Anyone who is running an organization like this, which is global, I think has to have extensive international experience. I don't mean "I went to graduate school overseas" or "I lived overseas for a few years in one country." That's not the same as living in three or four or five different countries and possibly being educated overseas. I think that's a huge advantage, and I've sat on boards of companies that struggle with this; with getting international participation on the board.
This company has tremendous strategic advantage in terms of its footprint around the globe. You can't have it run by people who have largely lived -- including myself -- in the United States. You have to have a global perspective, and we're trying to integrate that into the DNA of the company.
Believe me, there are a lot of tremendous contributors that have been with GM for 25 or 30 years. This will be a mix and a match. If we want to create a culture of accountability, when we have these very talented people with the right background, we're going to push them to the forefront of leadership positions.
Ferguson doesn't have real profit-and-loss responsibility, does he?
Is there a way to do that within GM?
You've got to change the way we operate today, but over time, yes.
Would you envision that happening?
Probably, or else I probably wouldn't be doing what I'm doing.
Is there a time frame for that?
The company was managed much differently in the past than it's going to be managed in the future. We managed the company on a legal entity basis probably since the origination of the company. That model was given up in the 1970s and '80s in most global international companies. It was managed that way through bankruptcy, and that has to change.
That means our back office and our accounting and our IT all have to be brought into alignment. Once that's done, and it has largely been accomplished from a financial point of view -- this will maybe surprise you, but we will be able if necessary to tell you the profitability by car by vehicle, by VIN number. That's a powerful thing to say.
Many companies have won in competitive dynamics because they have better information. That will drive a lot of different behavior in this company.
What can we expect in infotainment?
I remember 2 1/2 years ago, coming from a different industry, I thought that we were horribly underwhelming the opportunity, that the industry was, and it's got to change. It's got to radically change. I don't think anybody has gotten it right yet, but we have hired a number of people from the tech side of the world, both from the appliance side and from the network side, that I think will give us competitive advantage over the next two to three years.
How do you ensure that you get the human-machine interface right?
Believe me, this is not where we're going to stop, but, gee whiz, we're going to have Siri in our cars. We're coordinating with Apple. That is a step in the right direction. I think this company is blessed with so many good things, but if you would've brought somebody from Apple here five years ago, this whole industry would be radically different in this area of infotainment, and that's what we have quietly done. We've brought people in from Lucent and some of the carriers and said, "OK, clean sheet of paper, go."
Where is all of this going?
I made a comment when I first came here that every car ought to be a hot spot on the Internet, and it will be. It will be whether GM does it or whether Ford does it or if Volkswagen does it. It will come faster than people think.
What's your ballpark time frame?
You will see, in the next two to three years, radical changes. And GM will be in the forefront of that development.
You can reach Peter Brown at email@example.com.