The trials of GM's Dan Akerson

  @FortuneMagazine August 16, 2012: 8:17 AM ET
dan akerson gm
NEW YORK (Fortune)

For a Navy man, Dan Akerson has taken a long time to find his sea legs at General Motors. Now the Detroit long knives are out again.

Automotive News owner Keith Crain, the unofficial voice of Motor City, opines in this week's issue that "GM is going from bad to worse." And influential industry blogger Peter De Lorenzo goes even further in his latest post: "To be blunt, Akerson has been an abject failure at leading the reconstituted General Motors, and on every level, and the evidence of that is piling up by the hour."

Akerson can't catch a break. In a conference call to employees last week, he complained about leaks to the news media. "We have to stop leaking in this company. It's an act of treason -- it really is," Akerson said. He exhorted GM employees to be loyal to their company and said those unwilling to play by the rules "ought to work somewhere else." Akerson's remarks were promptly provided to the Detroit News, which made it appear as if leakers were at work again.

Bad news is coming at Akerson from every direction. Over the weekend, a report turned up in a German newspaper that Peugeot, GM's French partner, was planning to move production of a flagship model to an underused GM Opel plant in Germany. The report ignited a firestorm of protest from the French, who don't want to see any of their jobs going to Germany. An Opel spokesman was forced to deny the report, declaring it to be a "rough mixture of speculation and gossip."

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But when Akerson tries to do something worthwhile, his actions get buried. On August 9th, it was reported that he bought 25,000 shares of GM at a price of $20.35 each. Notably, he used his own funds for about a third of the shares, rather than merely exercise options the way most CEOs would.

Akerson was actually putting his money where his mouth is. But the news was overshadowed by the continuing fallout from the firing of marketing czar Joel Ewanick. According to news reports, Ewanick was spreading the cost of a $560 million sponsorship deal with Manchester United, the British soccer team, over several different budgets in violation of company policy. When Akerson learned the real figure was more than thev amount he had approved, he is said to have confronted Ewanick and demanded his resignation.

Abrupt executive departures have become a recent signature of the Akerson administration. Just after Ewanick left, GM announced the departure of star designer Dave Lyon. Lyon was escorted out of his office for undisclosed reasons, days before he was to take over as head of styling for Opel.

Among Lyon's assignments was overseeing interior design for the Chevrolet Volt -- another Akerson headache. Volt has consistently fallen short of the sales targets that Akerson has set for it, and last month, Tony Posawatz, who headed the Volt program, "retired" from GM at age 52. He will have to put off buying that rocking chair. Posawatz has turned up at Fisker, where he has been named CEO of the troubled hybrid car maker.

Top executive churning is unheard of at GM, where accountability has always been difficult to assign and promotions were handed out on the basis of personality as often as performance. Although the departures of Ewanick, Lyon, and Posawatz were all made for different reasons, critics were quick to see them as a reflection of Akerson's mercurial leadership and hair-trigger reflexes.

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In Germany, another abrupt departure saw Opel CEO Karl-Friedrich Stracke move on after little more than a year on the job. GM has been trying to fix Opel for 20 years, but Opel is still losing billions of dollars and has a weak position in a shrinking market. Akerson has given the job of stabilizing Opel to his chief lieutenant, vice chairman Steve Girsky, but progress has been slow. The automaker needs to close plants, which is dicey in Europe, and analysts have been unimpressed by its linkup with Peugeot, arguably the second-weakest automaker in Europe. "I hope GM executives were smart enough to stick an escape clause into their deal with Peugeot so they can put their tails between their legs and quietly slip away," wrote Automotive News' Crain. "It didn't make sense then, and it makes less sense now."

Opel isn't the only bad deal of GM's old management that Akerson is trying to unwind. He says GM's decision to spin off tech firm EDS in 1996 meant, in effect, that it was handing its information technology management to an outsider. He recently described it as one of the worst moves GM has made in the past 30 years, because GM is trying to operate with a 1970s computer system that affects design, engineering, payroll, and dealer relations.

Getting Motown on his side isn't impossible for Akerson. The city is desperate for good news. What he needs to do is post some wins on the board: a hit car or two, a breakthrough in battery technology, or a high-profile deal with a high-caliber company like BMW or Apple. Then he can put his critics behind him and focus on running GM.

"We want to build this company so that it is the lion of the industry at the end of this decade and going forward," Akerson has told employees. Nobody doubts that he means it, but he needs to take control of his own fate in order to get it done. To top of page



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