Last week at a Detroit watering hole I ran into a couple of insiders at General Motors. I asked one of them, a fellow I’ve known a long time, what he had to say about the new GM CEO, Dan Akerson – GM’s fourth CEO in less than two years.
He paused and, asking not to be quoted by name, said, “He’s learning. He’s smart but he doesn’t know the car business.”
All true. Before taking the reins at GM, Akerson was working as managing director of The Carlyle Group and was co-head of the firm’s U.S. buyout fund. Before that, he had a long career in the telecommunications industry and before that he attended the U.S. Naval Academy.
The Carlyle Group is most interesting. This is a place ex-U.S. Presidents such as George Bush Sr. land after leaving office, peddling their contacts and influence at the highest levels around the world. We are talking about a very, very powerful and completely linked-in investment and financial services firm. So Akerson has contacts at the top of U.S. society – from politics to financial services.
But there is nothing on Akerson’s resume to suggest that he knows anything of substance about hard-to-manufacture, complex things like cars and airplanes. Sure, he’s an engineer by training, but he’s never run a company with the global reach of GM, nor has he had to oversee the incredible complexities of the global auto industry.
He does know how to read a balance sheet and that can’t hurt. Still, GM’s revamped balance sheet is not difficult to understand. The company’s cost structure is at a 40-year low. No wonder GM is making money at the low point of an industry sales cycle.
GM’s board has said it wants Akerson on the job for several years, which means he will actually move to Detroit from Washington, D.C. He’ll find the social life in Detroit a little different, I would think.
I would think his learning curve at GM will keep him pretty busy, anyway. I asked around the Detroit show about Akerson, pushing questions at various long-time sources. Most of what I heard sounded a lot like what was shared by my friend at the watering hole: Akerson is a strategic thinker, not a nitty-gritty details guy. He, I hear, wants his senior managers to hit their budget targets, first and foremost, and keep reports to one page at most.
Akerson is also said to have a clear vision for the company. He likes concise thinking from his leadership team, too. He wants GM to grow new revenues, not depend on old ones.
Akerson also is seen as a tough cookie, what with his training as a naval officer. He’s a no-nonsense, let’s-get-this-job-done guy, then.
Tough and smart and committed and strategic are all good qualities to have. But after seeing what Alan Mulally has done at Ford after a career in the aircraft business at Boeing, I do wonder if Akerson is at a huge disadvantage for having such lack of expertise at a global manufacturer building highly complex devices. That seems to me to be the problem with GM’s new CEO.
We’ll see how big that problem is very soon, I am certain.
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