GM CEO Dan Akerson planning a reorganization of the automaker

Article by Christian Andrei, on August 21, 2012

Dan Akerson, the CEO of General Motors Co., said that the automaker plans to restructure the company so that it will be out from under a well-established regional authority toward a structure based on global functions, according to insiders. The power is likely to be distributed from regional chiefs to global leaders in areas like marketing, purchasing and product development.

The sources said that the details haven’t been determined yet but GM is upgrading its accounting system to be able to support the new organization. The reorganization won’t be a formidable challenge for GM. Basically, the idea is that GM could be made more nimble and efficient with the presence of global chiefs.

Dennis Virag, president of Automotive Consulting Group Inc., said that three years after GM restructured in a bankruptcy that was supported by the government, Akerson is dealing with something that has baffled his predecessors for many decades. He added that everybody realizes that there’s a need for the changes. Virag added that Akerson's efforts are hindered by GM’s size, history, complexity and his own inexperience when it comes to manufacturing.

Akerson’s career has been mostly in the telecommunications and private equity. GM has fallen by 35% since it had its initial public offering in November 2010.

Akerson has become highly frustrated about the fractured fiefdoms and culture of sluggish-moving consensus. GM reported losses in Europe and its market share in the U.S. has fallen by 2 percentage points. In the first six months of 2012, its net income had fallen by 50%. GM was able to get back its top sales crown in 2012 while it earned a record-breaking $9.19 billion. But six months into 2012, Toyota Motor Corp. had led sales. [source: Bloomberg]

Topics: gm, ceo, dan akerson

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