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GM to Change Culture: Will Make Cars, Chase Profit

— February 20, 2016

One reads with grim amusement that General Motors is on a quest for a new “culture.” No sooner has the corporation demonstrated to stockholders its religious devotion to profits, complete with ritual human sacrifice, than it decides it’s time for a makeover.

Of course, with the bad press that came from willfully killing perhaps hundreds of people, GM may have deduced that its brand image was tarnished in the eyes of some and in need of a polishing. Not that anyone who contributed to the deaths caused by the notorious faulty ignition switches would be losing his or her job. But with a seminar here and a retreat there, rest assured that everything will indeed be different in the offices on the Detroit River, going forward.

Just what will this change look like? According to CEO Mary Barra, who went before a U.S. House committee in 2014, existential change had already taken place at the automaker even as evidence was coming out to the effect that it had opted to save 90 cents per part rather than protect its customers’ lives. The then-new CEO told the committee she found the facts about her company “very disturbing,” adding “That is not the way we do business at the new GM.” Convenient for Barra that the corporation responsible for at least 142 deaths suddenly vanished when she took the reins in January of 2014, and a guiltless “new GM” appeared in its place. One wonders whether those who owed car payments to the old GM became free of debt when that entity disappeared.

As a corporate move in response to the ignition switch disgrace, in 2014 Barra created a “product integrity team.” Said Barra, “This new way of developing vehicles will provide the highest levels of safety, quality and customer service.” We are perhaps to conclude that the “old way” of making cars had no protocols in place to evaluate product safety, no employees tasked with monitoring compliance with federal safety regulations. But of course, such protocols and such job descriptions always nominally exist.

It is possible that CEO Barra means well. It is possible that she personally was surprised and “disturbed” to learn of the cold and ultimately murderous decisions that for years were made in middle management offices at her company. It is impossible, though, that she intends to change anything fundamental at General Motors. Because the corporation’s first legal duty is to its stockholders, and that will be the case no matter what superficial “cultural” raiment the corporation dons. Let us look at the changes in culture Barra has effected.

The ostensible focus of these changes is on leadership. Executives who show particular promise are enrolled in a year-long “Transformational Leadership” program run by Stanford University, the California school where Barra earned an MBA while on leave from GM and where she is a member of the board of trustees. The theory of transformational leadership has been around at least since the 1990’s, when it was especially associated with the U.S. Army, but it has enjoyed particular cache in recent years. The main idea is that would-be leaders identify their own values and then live by those values in an irresistible nova of self-actualization bound to inspire and, literally, enthrall subordinates. I suspect that the most promising executives, the ones chosen for the program, are those whose personal values have proven to align with the success of General Motors.

“The mindset behind this program,” says Michael Arena, GM’s global director of talent and development, “is very much around how can we start to challenge ourselves to think like a startup but leverage the global scale of the footprint of the company we have.” This corpspeak would seem to mean that GM is looking for innovation from its executives. This would make sense, as, along with “leadership,” “innovation” is a current staple of corporate messages, from conference topics to in-service themes. This emphasis on innovation also makes sense, since the deepening crisis of global capitalism has corporations and investors seeking out the world’s remaining natural resources in methods such as fracking, seeking out the few remaining untapped sources of capital by privatizing education and absconding with workers’ pensions, and seeking out markets in a world where income inequality is reaching historic levels.

Despite posting its most profitable year ever in 2015—$9.7 billion net income—GM’s stocks are down. Investors are wary of a coming economic downturn. In response, Barra has said she plans to cut operating costs by $5.5 billion by 2018 while increasing dividends on shares. And that is the goal of any “cultural change” the corporation touts. It is hard to see how a company-wide dictate to cut costs is going to create the incentive, in those middle-management offices, to put safety first, especially when the engineers and “leaders” making decisions on parts and processes realize full well that their salaries are among the costs that can be cut.

Meet the new culture, same as the old culture.

Sources: GM works with Stanford to train execs, change culture GM posts record profit in fourth quarter and 2015, but shares skid CEO Mary Barra is Driving Culture Change at General Motors GM avoided defective switch redesign in 2005 to save a dollar each Transformational leadership: industrial, military and educational impact

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