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Maybe finance guys can run car companies after all.

7Feb

In Detroit’s long-running feud between car guys and finance guys, the finance guys are seemingly winning at General Motors. CEO Daniel Akerson’s previous job was at The Carlyle Group, a private-equity firm, and he was once CFO of MCI. He has no prior auto-industry experience (though he has run telecom companies). Nor does CFO Daniel Ammann, although he was deeply involved with GM as an investment banker at Morgan Stanley (see “In the Fast Lane at GM”). Excepting Akerson and vice chairman Stephen Girsky, GM’s directors come from outside the industry.

Is this a bad thing?

Car guys, of course, would say yes. They would point to past GM CEOs like Roger Smith and Rick Wagoner, both finance guys and both ultimately unsuccessful. They would agree with former GM vice chairman and famous car guy Bob Lutz, who argued in his book Car Guys vs. Bean Counters: The Battle for the Soul of American Business that in any company, the “final word” should go to “those who live and breathe the customer experience.”

But Lutz also acknowledged that automakers are complex entities that require considerable organizational and analytical skills to run. (It was the managerial genius of engineer Alfred P. Sloan Jr., after all, that created the modern GM.) He praised Jack Smith, a finance guy and GM CEO in the 1990s, for undertaking a difficult and much-needed reorganization of the company.

Lutz also told a reporter that it was a good thing Akerson and Ammann were outsiders, since they haven’t been “trained to run the automobile industry in the United States the wrong way.” So maybe finance guys can successfully run auto companies after all, although GM’s board could probably use one or two more car guys.

Even a car guy would have to respect Dan Ammann’s passion for the product. He tells CFO that he considers himself “a closet gearhead” with an abiding interest in cars and the people who design and engineer them. But as a true finance guy, Ammann is giving the car guys the financial tools they need to figure out whether their projects will actually make money.

Of course, whether he and Akerson can make GM world-class in efficiency and profitability — and put to rest the “Government Motors” moniker — remains to be seen.

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