Reengineer GM’s Culture

Commentary

Everyone talks about changing the culture at what’s left of General Motors. I suppose that means less talk and more action, fewer committee meetings and more decisions, less wasted time.

Bah. I’ll tell you the real cultural change that’s needed. Break the control of the finance types who have run GM into the dirt. Give power to the car guys, the people that understand the business.

Half a century ago, after Harlow Curtice stepped down as CEO, the finance men decided to take control permanently. They created disaster after disaster since, but never allowed their power to be questioned.

The trouble started with CEO Frederick Donner. He started GM’s shift from product engineering to financially based engineering in the late 1950s. Donner also embarrassed the auto maker by paying private detectives to investigate GM-critic Ralph Nader’s personal life.

Then there was Roger Smith, who ran GM from 1981 to 1990. He saw the problems, but his “fixes,” from botched reorganizations to expensive robots to solve GM’s quality and productivity problems, only made matters worse.

For a brief two years, a brilliant engineer did become chairman. Robert Stempel, who developed the front-wheel-drive Toronado and the catalytic converter, began the process of correcting his predecessors’ errors in the early 1990s. But he was used as a scapegoat for GM’s troubles at the time and quickly forced out.

Jack Smith followed Stempel in 1992. He decided car guys had no place in upper management and set up a system that froze them out.

The recently deposed Rick Wagoner followed Smith in 2000 and also focused on financial solutions, instead of product, as GM sank under him.

At least in the old days, the CEO always had a product person at his side as president. The smarter CEOs listened to them occasionally.

For too long, GM executives wasted time and resources on boondoggles, such as buying computer companies and interests in small auto makers, while they allowed the auto maker to fall behind in engines, transmissions, interiors and design.

So let’s have a real culture change. Put the bean counters where they belong. Let there be a financial officer as vice president, but not CEO. Let’s have people at the top who understand the car business and prove it with great deeds.

In GM’s heyday, a powerful vice president headed each car division. He usually was an engineer but he ran everything, including the factories, dealer and public relations. That’s where he learned to be an executive.

GM’s great successes have come from car guys and inventions such as the automatic transmission and catalytic converter, not financial wizards. Designer Harley Earl supercharged sales by inventing vehicle styling in the 1920s and tailfins in the 1950s; engineer Edward Cole created a powertrain dynasty with the legendary small-block V-8.

Yes, car guys mess up, too. But if GM is to be saved it needs heroes who know cars. The best news in this regard is Bob Lutz, the quintessential car guy, is staying on at GM after all.

If you look at the great auto makers, car guys are the true movers and shakers, not financial people.

Jerry Flint is a columnist for, and former senior editor of, Forbes magazine.