After bankruptcy, gm struggles to shed bureaucracy

 DETROIT — In the old General Motors, employees were evaluated according to a “performance measurement process” that could fill a three-ring binder.

 In Terry Woychowski’s case, for example, his job as director of GM’s vehicle engineers was spelled out in exhaustive detail, and evaluated every three months.

 But in his new job as vice president — a promotion he was given 20 days after GM emerged from bankruptcy — his performance review will be boiled down to a single page, something he had never seen in his 29 years with the company.

 Woychowski said he felt the grip of GM’s legendary bureaucracy start to loosen, something he never imagined possible. Now, such reviews are being scaled down and simplified across the company.

 “We measured ourselves ten ways from Sunday,” he said. “But as soon as everything is important, nothing is important.”

 For all its financial troubles and shortcomings as an automaker, no aspect of GM has confounded its critics as much as its hidebound, command-and-control corporate culture.

 When GM collapsed last year and turned to the government for an emergency bailout, its century-old way of conducting business was laid bare, with all its flaws in plain sight. Decisions were made, if at all, at a glacial pace, bogged down by endless committees, reports and reviews that astonished members of President Barack Obama’s auto task force.

 “Everyone knew Detroit’s reputation for insular, slow-moving cultures,” Steven Rattner, head of the task force, wrote recently in Fortune magazine. “Even by that low standard, I was shocked by the stunningly poor management that we found.”

 Even as it labors to change its culture, GM must convince consumers that it is building better cars. One sign of its challenge: Fewer than a dozen of the company’s models were recommended in a recent Consumer Reports survey.

 But instead of playing down the survey, as GM might have in the past, its chief executive, Fritz Henderson, ordered it sent to every employee in the company.

 “Have we made some missteps? Yes,” said Susan Docherty, who in October was promoted to head of United States sales. “Are we going to slip back to our old ways? No.”

 GM emerged from bankruptcy last summer as a much smaller company, 60 percent owned by American taxpayers and free from much of the debt and health care obligations that had crippled its balance sheet.

 But its cultural change is a work in progress. GM’s new chairman, Edward Whitacre Jr., and directors have prodded GM to cut layers of bureaucracy, slash its executive ranks by a third, and give broad, new responsibilities to a cadre of younger managers.

 Replacing a binder full of job expectations with a one-page set of goals is just one sign of the fresh start, said Woychowski. “You know there’s not much good that comes out of a bankruptcy,” he said. “But it is a force that helps you change a culture.”

 Henderson, said he was aware the company was being scrutinized to prove it had learned from its mistakes. “Above all, we need to be faster,” Henderson said in a recent interview.

 The shock of bankruptcy has prompted changes that would have been unheard-of in the old GM.

 In the first week of August, Henderson told Jon Lauckner, the new head of global product planning, to scrap GM’s organizational chart for vehicle reviews and start over.

 In the old GM, any changes to a product program would be reviewed by as many as 70 executives, often taking two months for a decision to wind its way through regional forums, then to a global committee, and finally to the all-powerful automotive products board.

 “I used to see the same presentation three times,” Lauckner said. “The first time it was interesting, the second time less so, and the third time it was just a transaction that needed to be done.”

 Lauckner came up with a new schedule that funneled all product decisions to weekly meetings of an executive committee run by Henderson and Thomas Stephens, the company’s vice chairman for product development.

 The new system was tested on October 23, when Woychowski and Mark Reuss, the company’s new head of global engineering, asked the committee for a three-month delay in introducing the Chevrolet Cruze compact car.

 The delay, they argued, was needed to improve engine performance and the quietness of the Cruze’s ride — important areas of comparison with the segment-leading Honda Civic.

 “In the past, we might not have had the guts to bring it up,” said Reuss. “No one wanted to do anything wrong, or admit we needed to do a better job.”

 But to the relief of Reuss, the executive committee approved the delay. Soon after, he and other senior engineers were putting the Cruze through 80-mile-per-hour comparison tests with the Civic to close the competitive gap.

 In the past, GM rarely held back a product to add the extra touches that would improve its chances in a fiercely competitive market.

 “They used to have a budget and a time frame, and when it was exhausted, that was the finished product,” said Joseph Phillippi, a principal in the consulting firm Auto Trends Consulting. “I used to ask them, ‘Did you run out of money before you completed the interior?’ “

 GM executives used to take great offense to such remarks. Now, they concede that the company did produce inferior products.

 “I don’t even want to talk about what was ‘good enough’ anymore,” said Stephens, a career engineer who took over GM’s top product job last year. “You can’t win with good enough.”

 For months, Stephens has been leading meetings with staff members called “pride builders.” The goal, he said, was to increase the “emotional commitment” to building better cars and encourage people to speak their minds.

 “If everybody is afraid to do anything, do we have a chance of winning?” Stephens said in one session last month.

 Reuss had been running GM’s Australia division when Henderson summoned him to Detroit in July to take over global engineering. In October, he convened a two-day meeting with his top people from China, India, Brazil and other GM engineering centers around the world.

 They met at 6:30 a.m. on October 15 in a parking lot at GM’s 1,600-hectare proving grounds in Milford, a small town west of Detroit. Nine of GM’s newest vehicles were lined up for test drives to northern Michigan.

 But first, Reuss, wearing a red-and-black leather racing jacket, addressed the group.

 “There has been fear in the organization, and people have been afraid for their jobs,” he said. “But now we need to be open and transparent and trust each other, and be honest about our strengths and weaknesses.”

 As he drove north, Reuss, 45, reflected on his own career at GM. He started as a student intern in 1983, and worked his way up the engineering ranks. One of his biggest assignments was serving as the executive in charge of one of the most ridiculed cars in GM history, the Pontiac Aztek.

 The Aztek was half-car, half-van, and universally branded as one of the ugliest vehicles to ever hit the market. Reuss had little to do with the design, but his job required him to defend it as if it were a thing of beauty.

 It was brutal, he said during an interview as he drove, to grit his teeth and pretend that the Aztek was something to be proud of. “It was something that flame-hardened me personally,” he said. “I’m in the ‘never again’ business. I wouldn’t wish that experience on anybody.”

 Reuss is also motivated by a deep desire to restore the respect GM has lost. His father, Lloyd Reuss, was fired in 1992 as GM’s president in the biggest upheaval the company ever experienced — until this year’s bankruptcy filing.

 “This is an opportunity my dad never had,” Reuss said. “I don’t want to waste it.”

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