Ken Kelzer, an effervescent chief engineer and General Motors Corp. lifer, is bubbling about a car that has shocked the automotive world, one built by Canadian workers in GM’s highest-quality factory – the 2014 Chevrolet Impala.
“What you’ll see here,” he says as Impalas and Chevy Camaros and Equinoxes roll down the assembly line just over his shoulder, “is the passion of the people putting it all together. What’s going on here isn’t just based on a program, a policy, a standard or a system.
“No, it’s all about a lot of people pushing the margins and asking the right questions. That’s what makes the Impala a winner. And if the car’s a winner, they feel like winners when they’re working on it.”
Four and a half years ago, when GM emerged from bankruptcy owing its existence to a taxpayer-funded bailout, a winning feeling was nowhere to be found inside a car company that once commanded more than 52 per cent of the North American car market. The mood was desperate. As a global financial crisis swirled, GM received a cleansed balance sheet and a last chance to set things right, following decades of staggering mismanagement.
CEO Dan Akerson, who retires on Jan. 15, has steered the company through a transformative three-plus years, every minute of which has seen Kelzer and his ilk rebuild the once-sclerotic GM.
The nay-sayers, says Kelzer, argued that governments in Canada and the United States were throwing away taxpayer money to save an industrial dinosaur. “We didn’t agree,” says Kelzer.
Today’s Impala is the perfect car to symbolize the “new” GM. The redesign of the 2014 model began just as GM was emerging from bankruptcy. The car carries a storied name, too; at one time in the 1960s, GM sold almost one million Impalas a year.
The reinvented GM of 2014 is represented by the Impala.
Indeed, late last summer Consumer Reports announced that the Impala is the first Detroit model to top its sedan ratings in two decades. GM had a car, noted CR, that at a base price of around $29,000 “rides like a luxury sedan.” Detroit had not managed to sweep aside Japanese and European models like this for 20 years or more. Not only did the Impala top all sedans, it was among the top-rated vehicles CR has tested – bested by only the Tesla Model S hatchback and BMW 135i coupe.
As well, J.D. Power and Associates ranks the Impala tops among luxury cars in its latest Initial Quality Study. GM overall ranked atop the IQS for the first time in 27 years. The GMC and Chevy brand landed among the top five in the IQS, too. “GM has the best quality of any corporation in the study, the first time it’s been on top,” said David Sargent, J.D. Power vice president of global automotive and the study’s author.
The Oshawa plant where the Impala is assembled – along with the Equinox – has the second-highest quality of any car plant in North America, says J.D. Power – second only to Toyota Motor’s in Lafayette, Ind.
The Impala, says Kelzer, is the result of a revamped vehicle development process that is faster, less complicated and more focused on getting desirable cars to market than anything he’s seen in nearly 30 years at GM. What’s the difference between now and GM’s prebankruptcy days?
“I’d call it informality with responsibility,” he says. “We’re responsible for our programs and for our jobs, but there’s an informality in how we work with the company’s leadership. If I walk by Mary’s office [Barra, head of global product development when the Impala was created and Akerson’s successor as CEO starting January 15] she calls me in and wants to know if I need anything.”
The Impala is not going to save the company all alone but it does speak to the things that have changed at GM. To any objective observer, this is stunning. Few believed GM could change when Akerson took the CEO job in 2010.
“He came in right at a very precarious time,” said Barra, at a town hall-style meeting for employees. Barra said Akerson has led a transformation focused on teamwork and a spirit of winning in all areas – from quality products to financial results. Indeed, GM is now highly profitable and free of government ownership, other than the remaining shares held by the governments of Canada and Ontario.
During Akerson’s tenure as CEO, GM has generated net income of about $16-billion. Akerson’s predecessor, Ed Whitacre, in his book published last year, noted that Akerson in 2010 “thought GM was one of the worst companies he’d come across in his entire life.” No more.
In a recent speech to the National Press Club in Washington, Akerson said his tenure at GM focused on fixing decades of problems that had piled up like “rotting firewood.” The nightmares within GM fell into “three broad buckets": out of control costs; wasteful complexity; and diminished quality. “All funded by ruinous debt,” he said.
The Impala represents how GM has reined in costs, simplified its development and marketing processes and fixed quality issues that have sullied GM and its brands over decades. The Impala was launched in the middle of last year on time and on budget. It’s produced in Oshawa on an assembly line that is flexible enough to build front-drive Impalas side-by-side with rear-drive Camaro coupes and the Equinox SUV. And the Impala boasts many accolades and quality awards. This car hints at a promising GM future. “Good as this all sounds, the truth is we are still in the early chapters of our comeback story and we have a lot to prove, especially to people who left us for other brands,” said Akerson. “The only way to bring them back is to keep making cars, trucks and crossovers with world-class quality, reliability, durability and compelling design.”
Akerson, Barra, Kelzer and every honest soul within GM knows that the future requires commitment and investment in new products and processes. GM is not yet fixed. Still, the 2014 Impala is a pretty good sedan.
GM SALES IN CANADA
Car and light truck
Market share: 16.3%
Source: DesRosiers Automotive Reports
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