General Motors‘ incoming chairman, Tim Solso, will begin his tenure on Jan. 15 along with new CEO Mary Barra and CFO Dan Amman. It;’s a demanding administrative position, and based off his recent past, the former Cummins Inc. CEO isn’t afraid to make tough decisions. Outgoing CEO Dan Akerson currently holds the chairman title, while Steve Girsky is vice chairman. Both executives are on their way out.
According to the Automotive News, about one year after beginning his position as CEO of then struggling engine maker Cummins, Solso killed off one of the two U.S. heavy-duty engine platforms currently under development, one in which the company had already invested tens of millions of dollars in.
“To kill an engine platform at Cummins back then, it was like a sacred cow,” Jean Blackwell, who was then a vice president at the diesel engine maker, told Auto News. “Tim’s message was: ‘We need the right cost structure, and the customers have to want it.’ People weren’t used to hearing that.”
Cummins shares rose from $7 in early 2000 to $85 in 2011, towards the end of Solso’s tenure as CEO. He transformed Cummins from a struggling company on thin ice, to a strong player in the industry.
When Solso took over, Cummins was losing market share, down to 20 percent from nearly 60 percent in the 1980’s. Cummins was losing money from debt acquisitions and international expansion investments that weren’t paying off.
Solso cut costs, closing or consolidating 14 plants, in addition to nixing the engine platform. He then made another drastic decision, closing an assembly line at Cummins’ main assembly plant in its hometown of Columbus, Ind.
“Those two moves just shook everybody,” Current Cummins CEO Tim Linebarger, who worked for Solso for over a decade, told Auto News. “The message was: No, I’m serious. Things need to change.”
From early 2000 when Solso began his tenure, to 2012 when it ended, Cummins nearly tripled its annual revenue to 18.1 billion. MarketWatch named him as one of the five best CEO’s of the decade, along with the leaders of Apple, Starbucks and Google.
“Solso came in and said he was going to size the company appropriately, focus on R&D, take on the emissions challenge and listen to his customers,” Eli Lustgarten, an analyst an equity research firm Longbow said. “He did what he said he was going to do.”
Comments
It sounds like he has proven to have the common sense to realize what needs to be done, then the guts to do it. Time will tell, but this sure sounds like what GM needs.
His plans were hunky dori for Cummins, but what are his plans for GM?… Bean counter on steroids?
We’ve already been down that road.
Listening to customers and being a bean counter are entirely different approaches. Seems like he values the former, while being focused on the latter.
If I was a GMC Buick dealer right now I would be worried with another cost cutter in there.
Buick is really not setting the world on fire and GMC is really just a dressed up Chevrolet truck. Ford got rid of the “middle” line of cars and now with just the Ford and Lincoln line , they seem to be doing very well. With the next go around of cuts GM may end up like Ford with a high end (Cadillac ) and a low end (Chevrolet ) line of vehicles.
I’d challenge the notion that Buick “is really not setting the world on fire”.
With 2013 sales (through November) up 16 percent, it’s difficult to give that line any credibility:
http://gmauthority.com/blog/2013/12/general-motors-u-s-sales-up-14-to-212060-units-in-november-2013-by-the-numbers/
Ok . put the round tale lights back in the corvette . What has been done is like taking the stars out of are flag
“What has been done is like taking the stars out of are flag”
Really now? The stars? Were you just as careless with your analysis when the Corvette stopped having pop-up headlights?
Have you seen how awful the C7 looks when round taillights are photoshopped onto the car?
I think Mary and Tom need to focus on better looking cars and trucks. There’s a lot of talk about Mary’s success at product development, but I am not sure how Ed Welburn has survived as Chief of Design from 2003, but I think we need change. I am confident Mark will have some great ideas, but he’s an engineer not a car designer. I think there’s been some big success at Cadillac and I like the GMC styling too. Chevy has had some success with Camaro, Impala and Traverse, (especially the front-end) but the entire portfolio has no single unified look and that large chrome and gold Chevy bow tie is not attractive. Interiors are still an issue too. Buick has achieved a unified look, but I don’t think it’s a look that appeals to their target of younger, foreign luxury car buyers.
GM is spending a fortune on advertising, and if they had better looking cars, they wouldn’t need to advertise as much. Style is everything and Ed has had his chance, we need someone new and from the outside.
Before asking for change, I think it’s important to take a step back and understand what purpose automotive design serves in the first place.
From a general perspective, I believe it serves the following purposes:
1. Be “stylish” to attract attention from current and potential buyers, as appropriate in a segment
2. Be functional (aerodynamically, ergonomically, etc.), as appropriate in a segment
3. Communicate the brand’s values and image
Keeping in mind that these will be different depending on body style and vehicle segment, do GM’s current and future designs meet this criteria? I think that the general answer is ‘yes’. You might not like the “gold Chevy bow tie”, but is it resonating well with the market? You can ask the same about the design of the new trucks, or that of Buicks.
Speaking of Buick: it’s doing just fine in attracting all kinds of valued buyers:
1. It was the only brand to lower the average age of its buyers between 2007 and 2011:
http://gmauthority.com/blog/2013/10/buick-was-the-only-brand-between-2007-and-2011-to-lower-its-buying-demographic/
2. An overwhelming ratio of Buick buyers are new to the brand:
http://gmauthority.com/blog/2012/05/41-percent-of-buick-buyers-new-to-brand/
Does GM meet your criteria? I think not. GM has and continues to produce too many ugly cars and a handful of attractive cars. Ed needs to retire.
The combination of Buick and GMC is what is what makes Buick viable. It also points out GM’s reliance on large trucks and SUVs for profitability. GM has to be making a lot more on GMC than Buick.