Yes, Mr. Akerson, You Do Need To Worry About The Next Transmission

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In an extensive interview with Bloomberg Businessweek, General Motors CEO Dan Akerson trumpets the fact that he’s not an automobile enthusiast. “I’m not a car guy,” he told David Welch, “Nor should the CEO be worried about rear axle ratios on the next transmission.” Akerson may have an engineering degree but his resume shows a long career in the telecommunications industry, which unlike the auto industry sells service, not actual goods. It seems to me that while a CEO of a company needn’t necessarily know the nitty gritty engineering details of their products, like rear axle ratios, they should be conversant in the technological state of the art of their own industry. In an industry as competitive as the automobile industry, if you can’t see what’s on the horizon, by the time you see what’s coming it’s likely to be passing you by. One of the areas of automotive technology that is most competitive these days is, in fact, transmissions.

Not more than a decade ago, the typical car had a 3 speed or 4 speed automatic transmission, or a manual gearbox with 4 or 5 forward gears. Today, six speed manuals are commonplace and Porsche is said to have a 7 speed manual gearbox on the way. Continuously variable transmissions, CVTs, were a curiosity 10 years ago but are now standard equipment on many cars. Conventional automatic transmissions have gone from four speeds, to six, seven, and eight. Chrysler and ZF announced that the Auburn Hills automaker will be fitting a 9 speed automatic gearbox in upcoming models and Hyundai has said that they’ll be making a 10 speed automatic soon. To that mix, add the various “automatic manual” dual clutch transmissions, like Ford’s “PowerShift” box offered in the new Fiesta and Focus. VW’s dual clutch unit preceded Ford’s in the market, and Nissan, Mitsubishi, BMW and Porsche also now offer DCTs.

That Akerson is proud of his ignorance of one of the most competitive areas of automotive technology is troubling. Just to use an example, GM will have to make a decision if they will follow the rest of the industry in featuring DCTs, which get better mileage than a conventional torque converter equipped automatic. Consumers used to the silky smooth gear shifts of conventional slushboxes, though, have not been entirely happy with the harder shifts of the DCTs. Ford, in particular, has had to deal with customers displeased with the PowerShift. If the CEO of GM doesn’t know, or more importantly, doesn’t care about the “next transmission”, how will he be able to give his company guidance in making decisions concerning transmissions?

Photo credit: Andrew Hetherington, Bloomberg Businessweek

Akerson has no problem being a “car guy” when it means publicity for him personally. He took a prominent role in Chevy’s centennial parade on Woodward, during the Dream Cruise festivities, driving a vintage Corvette in the lead pack of historic pace cars. That role, though, unfortunately drew publicity away from the cars that Chevy was trying to promote with the parade, the Chevy Volt and new Chevy Sonic. I’ve seen as many news photos of Akerson behind the wheel of that Corvette as I have of the 51 Chevy Volts in the parade. I’ve seen more photos of Akerson in that ‘Vette than I’ve seen of the 20 or so Chevy Sonics that followed the Volts.

No doubt some of what Akerson has done and is doing to change the corporate culture at GM is necessary and important. To make significant changes you sometimes need an outsider as the change agent. However, being proud about one’s ignorance is never an admirable attitude. When it’s the CEO of a company that’s proud of his ignorance of his own industry, that’s downright dangerous to the company’s well being.

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One Response to Yes, Mr. Akerson, You Do Need To Worry About The Next Transmission

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