FORTUNE — The Obama administration’s automotive assignment force did two favors for General Motors: It bare abroad 100 years of accumulated obligations through bankruptcy, and it angry the company’s administration over to a aggregation of Detroit outsiders who appearance the business with beginning eyes. Headed by administrator and CEO Dan Akerson, the new aggregation has led GM to column solid banking results, accretion bazaar share, and strengthen its position in China. The aggregation becoming $5.4 billion in the aboriginal bisected of 2011, added than bifold 2010’s $2.2 billion, and regained its appellation as the world’s better automaker. But to accomplish the assets permanent, GM needs to cast out a plodding, risk-averse, belt-and-suspenders ability and become opportunistic, flexible, and fast on its feet. That’s not accessible for this company. Following it for 34 years, I’ve watched abounding well-intended efforts to agitate things up expire already they hit average management. Like any bureaucracy, GM’s all-inclusive army of white-collar workers (26,000 in 120 countries in 2010) stubbornly resists change. A above CEO referred to them as GM’s “frozen middle.”
Detroit doesn’t booty attentive to outsiders. Keith Crain, the affecting administrator of Automotive News, who is usually a abiding adherent of the bounded companies, all but accused the new GM aggregation of actuality carpetbaggers, accusatory they were demography acclaim for “work that was done continued ago.” Bounded pride aside, a broadly asked catechism about Detroit is, “Does GM accept a new antithesis area but the aforementioned old culture?” So let’s see how acknowledged Akerson & Co. accept been in adjustment GM (GM, Affluence 500).
Changes at the top
On the 39th attic at GM’s accumulated headquarters, Akerson is authoritative a big charge to change. No beneath than six of his 14 absolute letters accept been with the aggregation beneath than 24 months. He has broadcast his controlling lath to accommodate added assorted angle and ability by abacus architecture bang-up Ed Welburn and accomplishment baton Diana Tremblay.
Akerson, a teetotaler, rises amid 4 and 4:30 a.m. to assignment out and attacks the blow of the day with according intensity. He’s a alum of Annapolis who cast to say he has a mission, not a job, and seasons his accent with words like “leadership” and “duty.”
Akerson’s arch lieutenant, adviser, and advocate is Steve Girsky. Girsky aing the GM lath in 2009 as a adumbrative of the United Auto Workers; Ed Whitacre, Akerson’s predecessor, answer him to carnality chairman. A above balance analyst who critiqued GM from the alfresco for 20 years, Girsky, 49, has the enviable, if daunting, befalling to put his account to assignment from the inside. He presides over all-inclusive swaths of GM, including accumulated and artefact strategy, artefact planning, and purchasing.
Chief banking administrator Dan Ammann, 39, aing GM as broker a year ago afterwards 15 years as an advance broker at Morgan Stanley (MS, Affluence 500), area he formed with Girsky. The aboriginal GM CFO to abrasion a Vandyke and sideburns, Ammann took up the job in April afterwards the brusque abandonment of his predecessor. Ammann, a built-in of New Zealand, vows to end what he calls “analysis paralysis” and has declared war on complication — too abounding powertrains, too abounding trim levels, too abounding models — that saps earnings. With GM’s breakeven point at historically low levels, he believes the aggregation is accessible for cogent growth. “For the aboriginal time in bristles or 10 years, the aggregation is no best in crisis mode,” he says. “Now we can focus on revenue.”
Akerson, Girsky, and Ammann all started out as driver executives, blockage in the aforementioned city auberge during the workweek. That fabricated some old-timers resentful. Since affairs a center-city condo, Akerson and his wife now are spending weekends in Detroit, and he is accepting complex with bounded charities.
Cleaning out the cobwebs
Akerson has a agog eye for the anemic credibility in the old GM and is focused on acclaim them out. “Whenever somebody tells me, ‘This is the GM way,’ I pay attention,” he says. “Ninety percent of the GM way is great, and 10% should be totaled.” He is accepted for allurement adamantine questions, such as why GM needs 18 altered engines for four car brands, or why $10,000 in amount accumulation can’t be begin in the $40,000 Chevy Volt. “Dan takes bodies out of their abundance zone,” says one executive.
So does Girsky, as the 100-plus associates of the Global Bazaar and Industry Assay Group begin out. Pre-bankruptcy, they acclimated to aggregate abstracts from automotive markets about the world, assay it, and accumulate it into ample PowerPoint decks that broadcast every ages to 150 recipients. Suspecting that cipher apprehend them, Girsky ordered the address abeyant for a month. Aback alone a scattering of complaints came in, Girsky discontinued the report.
GM’s old cast arrangement of administration is gone. With its overlapping anatomic and bounded assignments, it diffused responsibility. “We didn’t charge 200 bodies on a alarm every morning,” says Girsky.
Nourishing new ideas
Fresh cerebration is seeping into GM from altered places. Global business bang-up Joel Ewanick was accustomed the name of a decorator and an allowance of $50,000 to accouter his office. Instead, he went arcade at IKEA, Crate & Barrel, and Target (TGT, Affluence 500), and adored $48,000. Ewanick and architecture bang-up Welburn sometimes alpha their banal over coffee at a adjacent Starbucks (SBUX, Affluence 500) — a cross-functional chat that would appear abundant added readily in the new GM — area they allotment architecture ideas.
Welburn, a 39-year GM vet, seems a lot freer to run his own boutique after arrest from the top. On my aftermost cruise to Detroit, he took me to some genitalia of his architecture authority area I hadn’t been before. He swiped his passkey to let me into the architecture apartment Advanced Design, which looks at artefact trends out to the year 2020. No aggregation canyon was issued, though, for the skunkworks ability accepted as Studio X, whose exact area he keeps abstruse alike from top executives. It is currently alive by a aggregation of designers abstraction the all-new 2014 Corvette. “In the old GM, we spent bisected our time developing presentations, and changes were fabricated actual backward in the process,” Welburn said. “Now decisions stick, and designers apperceive they are activity to stick.”
Making GM likeable
Unlike added car companies, GM has consistently lacked an ambrosial accessible face like Bill Ford or Lee Iacocca. Akerson is aggravating to antidote that. I accept interviewed eight of GM’s aftermost nine CEOs, but Akerson was the aboriginal to allure me to dinner, and the aboriginal to chase up with an hour-long affair in his arrangement the aing day. He’s additionally the alone one to accept a affected Affluence awning in his office. From the Aug. 22, 1983, issue, it shows four GM sedans that represent four altered brands, yet are duplicate from one another. The banderole reads, WILL SUCCESS SPOIL GENERAL MOTORS?
But accessible relations doesn’t appear artlessly to the CEO, and he’s begin it boxy going. He created a activity beforehand this year aback he offhandedly referred to Toyota’s (TM) Prius as a “geekmobile” and afresh aback he dissed Ford’s efforts to clean Lincoln by saying, “You ability as able-bodied baptize angelic water. It’s over.”
Akerson gets abutment from bounded fable Bob Lutz, who praises his “forceful personality” while acquainted it may be “counterproductive and irritating.” But Akerson does himself no favors with animadversion like the one he fabricated afresh in discussing his accomplished as a clandestine disinterestedness broker with the Carlyle Group. Asked by the Detroit News about a address that he gave up $100 actor by abrogation his affiliation to run GM, Akerson bluntly replied, “More than that.”
Untangling red tape
GM has promised to agitate off its old means abounding times before, but complacency, insularity, and authority were abiding so acutely that they assuredly led to the automaker’s collapse. Nothing has suffered added than new-model development, area GM has continued accustomed centralized requirements to trump chump demands. The allegorical archetype is the GM ashtray that was advised to be operated at 40° beneath aught but was absurd to accessible at accustomed temperatures. GM would stop and restart vehicle-development programs at a amount of $1 billion a year. In the months arch up to bankruptcy, GM afflicted its new-model addition agenda every month. The Chevy Traverse and its sister cartage were delayed for a year and a bisected during the banking crisis.
To put some accuracy aback in the product-development system, Akerson confused a a longtime controlling and installed Mary Barra, 49, an electrical architect with an MBA, who has 31 years with the company. Barra’s arrangement was arguable — the antecedent addressee of the job had loyal supporters, and she came out of animal assets — but she understands Akerson’s advance for acceleration and urgency. Within her aboriginal eight weeks, she ripped out a band of administration so she could get afterpiece to decisions about new models.
Akerson has additionally amid himself into the product-development process, to the agitation of GM’s added tradition-oriented engineers. He has pushed adamantine to addition aggregate of the Volt by accretion production, abbreviation assemblage costs, and blurred retail prices. He confused up the barrage of the redesigned 2013 Chevy Malibu by six months and fabricated abiding that its best fuel-efficient archetypal came aboriginal to market. And he has questioned the charge for high-horsepower V-8 engines. Early on, aback oil was affairs for $75 a barrel, Akerson asked what GM planned to do if it accomplished $120. Some of the old bouncer formed their eyes. Afterwards oil affected $115, they started to pay attention.
The aboriginal Akerson-era cars won’t be out until the 2014 archetypal year, but so far all the moves assume like acute ones.
Making cars and trucks that bodies absolutely appetite to buy
Old GM had two problems: The cars it fabricated mostly weren’t actual good, and it couldn’t accomplish money on them. Alive to change that blueprint is one of the few assembly about Akerson: Mark Reuss (pronounced “Royce”), who runs GM’s North American operations. An architect who spends hours on the assay track, he’s the son of a above GM president, and Akerson calls him the “heart and body of GM.” Reuss, 47, knows area all the bodies are buried. “I can bethink a continued altercation about a 40¢ hydraulic bushing,” he says. “That’s got to change.”
Reuss intends to absorb one-third of his time alive on artefact development and architecture — added than his predecessors — while administering manufacturing, sales, and marketing. Reuss has been beneath blaze for absurdity on incentives and, added recently, for absolution inventories bulge. GM best up a little U.S. bazaar allotment in the aboriginal six months of 2011, growing from 19.2% to 19.9%. The Malibu and Cruze are two of the U.S.’s bestselling cars, and the soon-to-launch Chevy Sonic should accord it addition able high-mileage entry.
There is affluence of assignment for Reuss to do. Aback Strategic Vision, a cast assay aggregation in San Diego, appear winners of its 2011 Total Quality Index in July, Ford claimed victories in bristles artefact segments and Chrysler two, but not a distinct GM agent accomplished aboriginal in its segment. GM charcoal abased on trucks and SUVs for a big block of its U.S. profits, has been apathetic to advance assisting alternatives to the acceptable centralized agitation engine, and faces a curtailment of high-margin new models for the aing 12 months. If Reuss can adhere on to bazaar allotment after abundant spending on incentives, he’ll coalesce his continuing as a approaching CEO candidate.
GM and Akerson face some aerial issues activity advanced because they will be negotiating with their own shareholders. GM afresh discussed approaching fuel-economy standards with a federal government whose Treasury administration still owns 32.4% of the company. This abatement GM additionally will be acceding over a new arrangement with the United Auto Workers, whose bloom affliction assurance owns 12.8% of the company. Akerson and Girsky accommodated consistently with UAW admiral Bob King, but the union’s alive associates will be attractive to cycle aback the two-tier allowance arrangement it agreed to in 2009, and to win a bench on GM’s board.
The talent, resources, brands, and ancestry bare to accomplish GM a adversary afresh are all in place. What Akerson & Co. charge do is actuate the added 25,990 or so salaried cadre to go forth for the ride. Whether they can do so will abundantly actuate whether GM allotment to the account cycle of ample automated companies — or aloof squeaks by with a casual grade.
This commodity is from the September 5, 2011 affair of Fortune.
For a added dive on GM and every aggregation in the Affluence 500, try our new Affluence 500 web app. To get started, go to fortune.com/500plus.
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