Whitacre: No-can-do spirit hurt GM
Ed Whitacre: "I tried to tamp down the matrix whenever I could. It wasn't easy -- the matrix was embedded at every level of GM, and the organization was most resistant to change."
In the spring of 2009, Ed Whitacre became the unlikely choice of the federal government's automotive task force to become chairman of General Motors.
Eight months later, the former AT&T CEO, convinced that GM's management wasn't capable of leading the recovery from its July 2009 bankruptcy, took over as CEO.
In his memoir, American Turnaround: Reinventing AT&T and GM and the Way We Do Business in the USA, the native Texan recounts his crusade to eradicate GM's hidebound management structure, which plagued the automaker with complications and complacency even after bankruptcy; his decision to leave before GM's November 2010 initial public stock offering; and his unsuccessful plea for the government to sell its entire GM stake immediately after shares began trading publicly.
The following excerpt from Chapter 14, "Design, Build and Sell the World's Best Vehicles," includes one of many examples of Whitacre's penchant for wandering around GM's headquarters or its engineering and design centers to chat up employees.
I also did a drive by at the global design center, the hub of GM's design organization, also in Warren. I somehow wound up in the truck design area -- had no idea where I was going, just wandered around until I saw all these trucks. That, to me, is like light to a moth -- I love pickups. I've been driving trucks for as long as I've been driving --more than fifty years. I own a couple of them right now, Chevy and GMC brands. Great trucks. A couple of designers were standing around, so I went over to talk to them.
I don't know the first thing about design; I'll be the first to admit that. But as a longtime truck guy, I do have some opinions. And here's my biggest beef with GM truck designs: not enough backseat legroom for passengers. This is based on my own personal experience. I'm six foot four, that's the main problem. But the other problem is that the backseats of GM trucks always come up short. I can push the seat all the way back and sort of make it work, but a couple of extra inches of legroom would sure help. So that's what I told these truck designers.
Well, they immediately did a matrix on me: They started giving me a bunch of excuses as to why that's not possible, can't be done, no how, no way, the usual sort of thing. I was arguing right back with them, 'cause I'm not taking no for an answer. Other trucks don't have this problem, just GM -- so I told them that. This was sort of pouring salt in the wound, because GM has been chasing the number one truck spot for years -- GM's top US competitor had taken that honor many years running, and they all knew this, of course. And so did I, which was why I threw it out there. Anyway, we were sitting there going at it pretty good over this legroom issue, and in walked one of the senior engineers, Mike Simcoe. He's Australian, sharp as a tack, I could tell. So he joined in.
Well, I couldn't stand there all day and talk trucks, so I gave them my best parting shots -- this legroom thing had been bugging me for years -- and off I went. I rambled around for a while more; the design center is huge, has long halls that go on forever. I stuck around another thirty minutes or so, then I had to get back to the RenCen for some meeting. Just as I was about to walk out the door, Mike caught up with me.
"We'll make more legroom," he said, and winked. Just like that.
And you know what? I went back two weeks later and sure enough, Mike and his team had figured out how to get a couple more inches of legroom in the backseat. So this guy was responsive and quick. That impressed me.
The rest of the design operation, from a timing standpoint, was not so impressive. Part of this has to do with auto industry tradition; part has to do with the GM matrix. The design process has multiple steps and levels of management sign off, so designs typically take years to complete -- this is how Detroit has always done it. Designers spend weeks or months carving detailed clay models -- they're pretty incredible, look just like the real thing only they're 100 percent clay. But most of these designs never make it out the door. So at the end of the day, you wind up wasting a lot of time, money, and clay.
I was not okay with this. I wanted design to step it up significantly, and said that pretty directly to the head of global design, Ed Welburn. We wound up having a very candid conversation about the need to insert a little urgency into this process. Ed, a very talented designer in his own right, promised to kick it up a notch. I took that as a positive sign; at least it was a start.
I tried to tamp down the matrix whenever I could. It wasn't easy -- the matrix was embedded at every level of GM, and the organization was most resistant to change. But I never stopped trying. If something wasn't getting done because of a matrix roadblock, I'd instantly try to knock it down. My hope was that if I knocked down enough hurdles, and people saw the good effects of that, they'd start doing more of it on their own. Progress on this front was slow. But glimmers of change were everywhere.
One time, a manufacturing executive came to see me: He said he couldn't get something done on time because of a holdup in procurement -- that's the group that buys all the parts that go into GM cars and trucks. As a result, he said, the vehicle was stalled in production. Could I help?
I listened to what he had to say -- then picked up the phone and called procurement.
I got the head person on the line.
"This fellow says your organization is keeping him from getting something done," I said -- the guy who'd been complaining was standing there listening, nodding in agreement. "He says it's your fault, that he can't get this car out without that part. What do you have to say about that?"
The procurement guy sort of stumbled around, said he didn't know the answer and would have to get back to me.
"Well, find out," I told him. "We need this vehicle out on time, so it depends on you." Translation: If it doesn't happen, it's his fault.
He got the part. In a hurry.
Another time, we had a holdup with the Cadillac CTS coupe -- the car had already been delayed and was in the process of being held back again. Why? A small spot on the left rear fender wouldn't paint right. Tom Stephens, the head of engineering, was working with his people trying to fix it. But no matter what they did, he said, this one small spot wouldn't budge -- it had a small crease in it, Tom said, so the paint looked funny.
This was an urgent situation: The entire CTS production line was stalled over this paint issue. The CTS was one of GM's premier vehicles. It also sold for a lot of money, and dealers were waiting for it. Delaying the launch date -- again -- was not an option. So I grabbed Tom and we drove over to the CTS assembly plant in Lansing. When we walked in, a bunch of engineers were standing around a big metal press, the one that makes the left rear fender. They were all looking pretty unhappy. Not good.
Tom took me over and pointed to this one spot: "See, it won't paint right."
Well, I was staring at this spot -- and I didn't see a thing. It looked perfect to me. Nobody was saying a word. Everybody was looking at me. I didn't know a thing about making rear fenders, or painting them. But I did know one thing: We were not delaying this car.
So I said to Tom: "We've got all this talent here, and we've got these multimillion dollar presses, and every other piece of metal on the car is perfect, right?"
"And that's the only reason for the holdup on this car -- that one little spot?"
That's all I had to hear.
"I don't care what you have to do. You have the responsibility, you have the decision making authority. Get this thing fixed, and get it fixed quick, because we are shipping this car on time."
Within a week, the problem was fixed.
I'm not sure how it got fixed. I never asked, to be honest. The point is that Tom and his team had responsibility and decision making authority to solve that problem, and they did -- they stepped up. That was the accountability part of the equation. And that's all I cared about, really.
From the book American Turnaround: Reinventing AT&T and GM and the Way We Do Business in the USA by Ed Whitacre with Leslie Cauley Copyright © 2014 by Edward E. Whitacre, Jr. Reprinted by permission of Grand Central Publishing, New York, NY. All rights reserved.