Q: How has the corporate culture changed at GM since you joined the board?

A: I would say, objectively, having been in the company in one form or another now for almost two and half years, that 90 percent of what we did was good. There is tremendous commitment and loyalty to this company. But 10 percent or 5 percent — I don’t know how to quantify it precisely — failed.

Recognize what went wrong, learn from it, move on. The way I describe it to our folks is it’s like that squirrel of an uncle you have in your family. You just say, “He’s there and we’re just going to accept that.” I can’t change the bankruptcy. It’s our interesting past. It’s our family collage, if you will. I don’t want to obsess on it, but I want to learn from it. And that’s the mantra that we have as a team.

So I would say we’re making good progress, we’re doing surveys on people. What do they see right? What do they see wrong? How do they view the management? We want to know. I want to know. I’m trying to move off the 39th floor. I want to move to the second floor, down with the real people. So in many ways we’re trying to change the culture.

I wasn’t used to such a command-and-control. I said “We’ve really got to make Cadillac a global brand.” Next thing I know, go to the Geneva (auto) show and we have North American cars, no right-hand drive, no diesel sitting there, and you’re going like, “Oh God, why didn’t we do that?” “Well, you said you wanted to make it a global brand.” You have to know when to launch, when to attack and when to defend.

You don’t have right-hand drive, you don’t have diesel, you’re no good in Europe.

Q: If you could wave a magic wand, what two things would you change at GM right now?

A: I want a miracle solution on Volt in the next week. That’s not going to happen. On a more serious note, it all starts and it ends with product. I want sustainable, differentiable product. The generation (of vehicles) that you see for the consuming public today is not just competitive, it’s very competitive. We’re holding our own. We’re taking share. We’re profiting.

The second thing is, we’ve got to make sure that the culture evolves to one that’s less hierarchal, flatter, more interactive, more participative. When I was at MCI, if we had 30,000 people in the company, we had 20,000 people who thought they were running the place. They wanted to make decisions. They were proactive. They were angry with senior management if they didn’t move quick enough. And we need to instill that, a culture like that — that leans forward all the time rather than leans back.

Q: What makes you the maddest as a CEO?

A: There is a resistance to change. And I don’t know about you, but I mean, I’m a much different person — ask my wife — than I was when we got married. We’ve been married 40 years. We not only look different, and I think we’re just as much in love as we were when we first got married, but we changed. Everybody changes.

Every corporation has to change, or it dies. You lose your competitive edge. There’s a real strong competitive gene at General Motors. I would say you have to meet the market on its terms, you cannot dictate to the market. I don’t like where our stock is. Well, what can I do about it? Execute on the fundamentals and the market will change and appreciate that. But at the end of the day, you have to create a culture that not only accepts change but seeks out how to change. It’s critically import that we inculcate that into our culture.

Q: With gas around $3 a gallon in the U.S., are people going to start going back to buying SUVs and trucks?

A: I was really amazed when gas spiked earlier this year and then it dropped 15 cents, and our pickup sales picked right back up. We’ve got to be prepared for everything. So from midsize down to compact (vehicles), we’re going to be really good on mileage and on economy, and that’s good. At the same time, if our customers want bigger cars, what are we going to do? Say “Well, we don’t want to sell anything other than economy and small cars?” No, we’re going to meet the market.

Q: Is there a fundamental shift in Americans’ car-buying habits?

A: I think it’s going to fluctuate with the price of energy.

Q: What do you see happening with auto sales in Europe?

A: It’s hard to believe this, but it was only three years ago that I think there were many in this country and around the globe that thought the (U.S. economic) system was coming off the rails. It’s amazing how short our memories are when you bring this up. People are going, “Oh, it wasn’t that bad.” It was bad. And when you fear for your job, that is uncertainty, and it’s a negative bias and it undermines your confidence. If you get over that, then the next level of concern is, “Can I afford to spend anywhere from $20,000 to $50,000 on this consumer product?” And you saw it here. We hit a 40-year low in our sales in the 2008-2009 timeframe.

The Europeans, I think, felt (in 2008) about like we do today: concerned, but not threatened. It was an American problem.

I think the roles are somewhat reversed today. The Europeans are feeling a great sense of insecurity, doubt, and I think their consumer confidence is in question. You can see the sales have fallen off for the entire industry in Europe, and so you have to look at your profitability.

One of my four goals is to be profitable in all of our major regions and areas of operations. Last year, at this time, we were losing money. We restructured given what we thought to be the outlook. We’re not going to achieve those sales and revenue numbers, so we have to look at our business operations there.

Q: What about China? What do you see happening in the economy there?

A: The Chinese government, I think, is very concerned with inflation. They’re obviously a very active, very viable, economy and they’ve taken everything from reserve requirements to interest rate actions to try to slow it down. In the two years prior to this year, we grew by 20 to 30 percent.

That’s a very difficult rate to continue to maintain. But if the market’s going to grow on the order of 2 to 3 percent this year and we’re going 10, that’s fine by me. I do think the Chinese in some ways were prescient in that they saw a bubble creating and they clearly have cooled that down, and I think inflation has dropped off a bit. I think those were prudent actions looking over a longer term. So, I’m cautiously optimistic on Chinese growth and our role in it.

Q: Is there no longer a stigma about going to work at GM?

A: I don’t think so. We are getting good young people. People want to work for us. For example, when I got there, when we thought about OnStar, we thought about safety and security. Now we’ve amalgamated that with infotainment. And it’s now starting to draw people out of Silicon Valley and all these people that would make you and me nervous. You know, they come to work, they don’t come dressed like we are dressed. Some don’t tie their shoes. Some wear different color ones. It’s a different work force.

But you know what, when I get in the car, if I have XM radio, I’m fine. I want ease. They want everything. That’s the evolution. It’s not a primary buying factor today, but it will be. We studied, and we did this with MTV — this will shock you that we actually retained MTV to come in — they have a market research group to study Millennials.

The old GM would have said, “We got it figured out. We’ve got a bunch of 55-year-olds that are going to tell us what a 20-year-old wants to buy.” We actually set up kind of a home inside the corporate headquarters. We bought Xboxes and everything else. We brought young people in. “What do you do? What do you see? How do you view it?” We wanted to know what drove them. We’ve got these MTV folks coming out to tell us what are the buying variables and what interests people.

This is a GM that’s trying to connect on where the customer wants to be met. So we’ve got to change not only our cars and how we offer them, how we distribute them, but how does the customer view us?

Q: You have been pushing the culture to speed up product rollouts, and you got the push back from your engineering staff, concerned about quality. Do you think you might have pushed too hard? The Volt did well in Consumer Reports satisfaction surveys, but in the general overall reliability, GM didn’t do that well.

A: No. In fairness, I’ve been in the job (15) months, so anything I accelerated hasn’t seen the light of day.

(The New) Malibu, when we did our consumer research, it was spectacular. A third of the people, when we unbadged it, thought it was a BMW, not that I want to be a BMW, but it gives you an idea of the perception. From stability and control it outperformed some of our European competitors. This is a Malibu, Chevrolet.

It comes out in January. We’ve shown it at the auto shows. So I wanted to move it up six-to-eight months. So it had to go through all of our quality gates. So I said, “If it launches in Korea in November, why don’t we do it in December or January here” This is where we see the biggest threat, because if I continue to produce old Malibu, I’m going to have to incent (discount them). I start affecting my residuals.

There’s this delicate biosphere that you have to manage. And you start saying, this is where you have to make the transition to change from a manufacturing culture to a multi-dimensional culture that says “Hey, look, in the marketplace we have to be competitive first and foremost.”

I’m never going to give up on quality. Never, never, never. I’m never going to sacrifice safety. I hope that’s been communicated in a couple of different ways

If we had got attacked on Dec. 7th, 1942, we probably would’ve approached the war a little bit differently than 1941. You have to adjust to what’s happening in the real world, not just say “I’ve got a plan of record” — that’s GM-ese for “I don’t want to change” — and the plan of record is generally set out years in advance. You have to allow for events that occur between point A and five years later. So we are not compromising on anything.

Q: Is there anything you wish you’d done differently since coming to GM?

A: “It’s never too late.” At the (military) service academies, they’ll constantly harp on this. You’re constantly re-evaluating decisions of the past. So if I have made a bad decision, I hope I immediately mitigated it by saying, “Wait a minute, stop, back up. Go back to, in the physical world, the fork in the road. That was wrong. Go down left.”

I think it’s foolish, if not arrogant, to say, “Today I know everything and I’ll learn nothing between now and a month from now or a week from now.”

I’m always re-evaluating. It’s not to say I want to be kind of a ‘Ricochet Rabbit’ and change directions. But if you see compelling information that fundamentally changes, you must change.

Q: How long do you plan on staying at GM?

A: I bought a condo in Detroit. I like the company. I like the city. I like the industry and I guess as long as I’m having fun and the board wants me, the management is willing to follow, I’ll stay.

———

Auto Writer Bree Fowler in New York contributed to this report.

AP-WF-12-16-11 1737EST

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