GM rearranges deck chairs in global product development

In a letter supposedly dated June 1, 2011 from the desk of Mary Barra, Senior Vice President of Global Product Development, the global product development team of General Motors (NYSE: GM) received news of a deep rearrangement of personnel. Question is, is it real or another shapeshifting event ala GM's past?
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One look at the length of the forwarded email page and you realize the depth of this new GM rearrangement is massive. Still, one would think GM would have already been structured to win well before it came out of bankruptcy. Apparently it was not.

Point is, change, especially if it's of the shapeshifting variety, should make GM stock investors a bit nervous about a return to the ways of the old GM; in other words, change for the sake of making things look better without really changing anything.

After all, it was the former CEO, Wagoner with his “Plan to Win” that was rife with change for many years including its design engineer (DE) program, but failed miserably while the company still ended up in bankruptcy, and Ford lived on without a dime of government bailout. So, now you have to wonder what this program change will likely be called at GM.

For the record, Mary Barra was put into her position by Dan Akerson; and Torque News reported on it. These latest changes are likely to be the result of her assessment and input, but GM seldom gives that kind of power to one person, except the CEO. In this case, think decison by committee.

As a former GM employee with 23 years, including 9 years within Saturn, I dare say I’m not surprised. In fact, my warning term, “rearranging corporate deck chairs,” came from a man I highly admired: Saturn’s past president, Skip LeFauve now deceased. He had a knack for the right words at the right time, so I adopted it because it befit’s the culture of GM past and, unfortunately, present, in my opinion. I especially used the words when I wrote "Perfecting Corporate Character" as far back as 1997.

As in the book, the rationale for corporate shapeshifting is always the same: streamline structure, improve efficiency, support the company drive to reduce complexity and simplify the business of producing the world’s best vehicles. Blah, blah, blah, etc, etc.; yada, yada, yada; more blah, ad nauseum. OK, who can argue with that?

This time, though, the organizational changes run through engineering and product development, not design or board-level management. Still, it’s hard not to get the sense of more corporate reprogramming as in the movie, Stepford Wives. Yes, that's a joke, but not all are laughing.

The following is just a sampling of executive announcements which are a result of the reorganization:

Larry Nitz, Executive Director Hybrid & Electric Powertrain Engineering, will transfer to the position of Executive Director Global Functional Leader Electrification, and will report to Micky Bly, Executive Director Group Global Functional Leader Electrical Systems/Infotainment/Electrification. His current responsibilities will transfer with him, and he will assume responsibility for Hybrid Systems within Vehicle Engineering. In this new position, the following executives will report to Larry:

Bob Agresta, Director - Global Program Manager - Hybrid/eRev/BEV Programs, will transfer to Global Vehicle Engineering and will continue in his current capacity.

Pam Fletcher, Chief Engineer Global Voltec & Plug-In Hybrid Electric, will transfer to Global Vehicle Engineering and will continue in her current capacity.

Tim Grewe, Chief Engineer and Director, Power Electronics and Hybrid / Electric RWD, will transfer to Global Vehicle Engineering and will continue in his current capacity.

John Haraf, Director Hybrid Vehicle Integration & Controls, will continue in his current capacity.

Ronn Jamieson, Director Battery Systems Engineering, will continue in his current capacity.

Pete Savagian, Engineering Director Hybrid & Electric Architecture & Electric Machines, will transfer to Global Vehicle Engineering and will continue in his current capacity.

Bill Wallace, Director Battery Systems Engineering, will continue in his current capacity.

John Capp, Director Global Active Safety & Innovation, will continue in his current capacity and will now report to Kristen Siemen, Executive Director Global Functional Leader Electrical Systems.

Mike Ableson, Executive Director Global Advanced Vehicle Development, will now assume responsibility for CAE as part of an effort to consolidate this activity. In addition to his current staff, the five executives will now report to him.

Jeff Boyer, Executive Director Global Functional Leader Interior & Safety, is named Executive Director Global Functional Leader Operations & Systems Development. This group is newly formed (ah, a new sub-kingdom within GM) to consolidate and bring focus around Engineering Operations. As a result, the four executives will now report to Jeff. For the record, I have known Jeff since the old Saturn days.

Charlie Baker joins GM in the role of Executive Director Global Functional Leader Interior & Safety, Global Vehicle Engineering. His career has come full circle back to GM after graduating from General Motors Institute in 1982. He will report to John Calabrese.

Three additional executive moves will take place in the Interior & Safety area alone.

One person in particular, Tanze Copelyn, Executive Director Global Systems Development & Operations, is reported to have elected to leave General Motors to pursue other opportunities. Gee, I wonder why.

Torque News Final Comments

Truth is, I could go on and on here; the letter was so long, even I got bored.

Good news is, given the imperative around quality, GM at least undertook a restructuring to cover every part of the enterprise, which is to be commended. But to make that happen, more executive organization changes to the leadership team had to occur that included names too many to mention here.

Global R&D coordination will be a major need for GM. That is why, Uwe D. Grebe, Executive Director Powertrain Global Advanced Engineering, is appointed Executive Director Advanced Technology Work and Alternative Propulsion Europe.

Now think global power train. In an effort to more closely align the development of new technologies and concepts, the Powertrain Global Advanced Engineering team will be reassigned within the appropriate Global Powertrain sectors.

And in an effort to become regionally focused on product execution and continue to share global common processes and tools that leverage best practices, portions of Global Program Management were combined with Global Product Planning. OK, I like that one! But you can only guess at the bureaucracy needed to engage that decision.

For example, David Kuhl, currently General Director, Global Segments, will now assume responsibility for a portion of the Program Management organization. 15 individuals will now report to him in addition to his current direct reports. I do hope he at least got a raise.

Of course, Ms. Barra says GM is taking these actions to strengthen the team so as to do things differently – all with a keen eye on improving the business and achieving our vision of designing, building and selling the world’s best vehicles.

Bottom line question for auto sector investors is this: Is General Motors really doing things differently? After all, we've been here before and lost money.

So, as a speculator who reads between the lines of corporate news releases all the time, I say the jury has to be out on that doing things differently, especially when it joins the throngs who say IC engine technology cannot achieve the 56.2 mpg expected by the President by 2025. Oh, come on. With all that education and firepower of MBA executives, you would think one would have an answer or at least make a forward decision. GM is surely paying them enough money.

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About the Reporter: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks, futures and writes articles, books and ebooks like, "Perfecting Corporate Character," "Awaken Your Speculator Mind", and "Millennial World Order" via authorfrank.com. He may be contacted here by email: [email protected]

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Additional Reading:
GM appoints Mary Barra to lead Global Product Development
GM to explore advanced natural gas engine technology
T. Boone Pickens touts natural gas vehicles in Washington, D.C.
Ram Trucks with natural gas could set a new trend in America
Fiat has tech savvy to lead America into natural-gas cars
Auto sector stocks follow Dow Jones in major market sell-off
Higher break-even price for Saudi oil sets new normal for auto fuel


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Comments

So let's see if I have this straight, GM needs to change the people who were ineffective which resulted in bankruptcy however making such changes is wrong because that is what old GM did which resulted in bankruptcy. I can only say that for GM's sake it's probably a good thing your not there to head the committee.
Point is, most of the people who were mega ineffective were likely let go 3 years ago. Perhaps I was one of them. Then again, I did give GM Inherent Criteria process which saved $1.92M per year; and which took management 6 years to decide its acceptance. That's what I see here; that same old shapeshifting while letting important stuff sit idle. Where is GM's 56.2 mpg IC engine? Nowhere to be found, but surely this re-org will do it. Right?
Yes, yes, you had the answer management would not listen, I get that from your opinions. My point was that no matter what GM does those who are bitter are going to find fault. Are these the changes that make GM suddenly great? No, probably not all of them. Is someone in there everyday trying to make a difference? Sure looks like it. And I see that you are fixated on this 56.2 mpg IC engine but there are a few other issues that need to be addressed as well. Rant away, but at least nod that there might be a bigger picture here.
Big Picture? There is always a big picture, like national energy policy, national energy independence. So, please, do tell about this one. The last big picture vision that GM had for itself was called "Plan to Win." Know what happened? The company went bankrupt. I can't help but recall the former President of Saturn, Skip LeFauve, talking about the danger of just rearranging deck chairs; that's why I mentioned it. And that 56.2 MPG has been lowered to 54.5 MPG; and that comes from the EPA for 2025 as a mandate. I do wish you would use your name; as you know mine.
I agree with taking out weeds, but one would have thought the weeds would have been long gone while the company was in bankruptcy. If these weeds are still there, something is wrong even more than I imagined. So did GM early retire the blooming roses just to prove it knew how to save a buck? My gripe is, let's not reorg for reorg sake or because GM has a new program manager. Trust me, in time it will change again, and again. I went through so many of these at GM that I now find it hard to get excited except in the negative sense. To me it's more picking at gnats while swallowing camels.