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~ USA Headed for a 5th Revolution! Why?

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Category Archives: Personal Stories

Every story is influenced by personal issues. These stories add another dimension to the characters. Besides, the stories are a good break from the serious issues associated with the revolution.

#385. Is a Rational Conversation about Racial Injustice Possible? (#8 re US Post COVID-19)

12 Friday Jun 2020

Posted by Jordan Abel in Gov't Policy, Personal Stories, Rebranding Black Community, Societal Issues, Uncategorized

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Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #365.  

Some of the entries are part of a series.  Several series are available as easy-to-read booklets for download:

  • Working with Lee Iacocca after he left Chrysler, 2019Q3 Iacocca Personal Observations. 
  • GM EV1 — behind-the-scenes events affecting development and introduction of the GM EV1, the first modern electric vehicle. 2020Q1 GM EV-1 Story Behind the Story Booklet
  • Coming technology tsunami and the implications for the US, Tech Tsunami Booklet with Supplement
  • Trump Supporters Brainwashed? A series discussing why Republics have abandoned basic principals, Are Trump Republicans Brainwashed 2020Q1
  • Who took out the Donald?  Who/what groups are most likely to “take out” Trump? Who Took Out the Donald Entries with Update
  • Revenge Revolution — description of what form the revolution might take, 20 01 07 Start of Revolution

Prelude: I’ve concluded Trump is a lunatic and the administration filled with lapdogs save a couple of people at CDC.  Instead of wasting time commenting on actions by Trump, I thought it more productive to begin discussing what happens in the US once the coronavirus is more under control.  #378 began the series. At this point not sure how many entries.  Comments and suggestions welcome.

ENTRY #385: An unexpected addition to the post-COVID-19 conversation is whether widespread racism exists in the United States. While such a discussion comes to the fore periodically, the current discussion seems to be more intense and have garnered a broader audience.

As usual in this administration, comments from Trump have created frustration and anger among most blacks and many whites. The event that precipitated the current conversation was not Trump but the gross misconduct of the Minneapolis Police in the death of George Floyd.

Although Mr. Floyd had a minor rap sheet, by all accounts from bystanders, Floyd’s behavior did not justify actions taken by the police – a knee to the neck for nearly nine minutes, with the cop apparently unconcerned about a possible video from a bystander.

The protest against the police following Floyd’s death started with the release of the video.  The protests started in Minneapolis-St. Paul then spread quickly throughout the country. Protests have continued for more than two weeks, and as of today, still continue.

Actions taken by the Trump administration have created more anger and frustration. The most egregious action seemed to be when Trump, using a loophole in the law that allowed military troops deployed in Washington DC to bring protests “under control.”   Some of the protests included looting.

Last weekend (06/06-07/2020) Trump ordered Attorney General William Barr to have the military troops disperse peaceful protesters away from Lafayette Park. Protesters were met with “chemical” smoke (likely pepper spray or teargas), rubber bullets and low-hovering helicopters.

Why such drastic action? Was the White House in danger of being overrun?  Was there extensive looting?  No and no.  The protesters were cleared by military troops so Trump could walk across the street for a photo op at Saint John’s Episcopal church, often referred to as the “President’s Church.”  Trump, the paragon of Christianity, stood in front of the church holding a Bible.  What more could his hard-core base want than a picture of Trump in front of a church holding a Bible?

As the second week of protests progressed, conversations started to include demands for reducing funding for police departments, and in some cases, eliminating police departments. Other demands focused on improved healthcare, better education, improved housing and some discussions about reparations for blacks.

I’ve tried to listen and understand. Over the last week or so, I’ve also spent 4-5 hours on Skype with a long-time friend whom we met in our early days in Charlotte.  While we have great respect for one another, our ethnicity and backgrounds are vastly different. He grew up in eastern North Carolina.  His parents were sharecroppers with limited education, probably 8th grade. Interestingly, all six children of the sharecropper parents went to college.

My friend’s wife, whom he met in Charlotte. as did we, is a high-energy go-getter who’s had a very successful career in the insurance industry. One assignment was managing an insurance company’s operation in a very large developing country.  The couple has two children – one in college in California and the other finishing high school.

Our recent Skype conversations have included him describing the experiences of an educated, affluent black family with different police departments. Over the years I’ve heard bits and pieces of some of the stories.  However, until this series of calls and then when I read his detailed accounts, which I encouraged him to write, I never realized the entire story. Not pretty.

The Skype discussions also included what he viewed as ideas to address inequities between the races. Before we started that conversation, he said “Some of what I’m going to tell you will make you uncomfortable.”  He was right.

Every now and then I asked a question.  One question was, “How can some members of the black community seemingly justify looting?  How can one justify stealing, especially stealing from a neighborhood store?”  (His response paraphrased), “Whites have stolen from blacks forever. Some blacks feel the only way to get the white man’s attention is to steal from him.”  I found that rationale incredibly disturbing and still have not processed the idea.

Another suggestion was blacks should receive reparations from whites. The rationale, he explained, was if Republicans in the Senate were willing to spend $4,000,000,000,000 for a coronavirus stimulus package, they obviously didn’t care about deficits. Therefore, why not spend another $4,000,000,000,000 as reparations for blacks? Besides, he continued, the $100,000 per person (black population 45+ million so a bit high) reparation would flow back into the economy as recipients bought new cars, bought new houses, took vacations, etc.

At the end of that Skype call, the most recent, I indicated, yes some demands during the call made me feel uncomfortable. I also reminded him that I had listened carefully and didn’t challenge any of his statements. But the next call would be my turn. During that call, I might make some comments that made him uncomfortable.

What are we going to talk about the next call? First, I don’t believe the conversation about racism across the US should be viewed as a zero-sum game. If the parties involved will listen, and be willing to accept reasonable solutions, then everyone can come out ahead.  If one of the sides insists on their “solution” or none at all, then likely no progress will be made.

To me, the only issue that does not need a lot of debate is whether most organizations have some employees who are not performing appropriately and need to leave. Such organizations include police departments.  That conversation needs to include the police unions.  I understand the purpose and value of police unions. But the unions need to quit overprotecting the bad cops. Overprotecting is not good for the entire police force, not good for the union and not good for the community.

As far as the rest of the demands, I have attempted to frame the questions to allow more than one view to be discussed and evaluated.  The questions are:

  1. If every other ethnic group, many of which experienced extreme and overt discrimination, has been able to get off the bottom rung of the economic ladder and migrate toward the middle class, even though the journey often has taken several generations, then should blacks study these ethnic groups and consider a similar path? What’s preventing blacks from doing the same things as these other ethnic groups did?  While the situation for each ethnic group was somewhat different, the path followed seems somewhat similar.
  2. If there are reparations, is it fair to deduct certain amounts to compensate or repay taxpayers for the extra cost of education, the extra cost of welfare, the extra cost of incarceration, etc.?
  3. Wouldn’t money allocated for reparations be better spent on education, healthcare and housing? What happened to teaching someone to fish?
  4. If the percentage of blacks incarcerated is disproportionately high compared to the population, what percentage of crimes are committed by blacks? One can argue about the fairness of sentences for certain crimes, but that is a different issue than the percentage of crimes committed by blacks.  (And eliminate most traffic violations from the calculation.) Is there a reason beyond just “police harassment”?
  5. What percentage of businesses in predominantly black communities are owned by blacks? If the percentage is low, then why aren’t there programs by wealthy blacks to encourage and support such businesses?  Rebuilding black-owned businesses may be even more important post COVID-19.  A report by CBS News (06/12/2020) indicated that when restrictions are lifted, up to 40% of the black-owned businesses may not reopen compared to less than 20% of white-owned businesses. The higher closure rate was attributed in part to lack of available financing.
  6. Is it fair to demand quotas for white players in the NFL and the NBA? (Yes, that’s a joke.)

More to come.

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Remembering a Friend from My Early Days

25 Wednesday Dec 2019

Posted by Jordan Abel in Personal Stories

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This entry is a complete switch from the usual content.  For a few days I’ll keep as a post, then transfer to one of the pages.  Thought it might be a good break.

A few days ago while thinking about an upcoming blog entry, the idea of writing about dogs in my life popped into my head. Most everyone has a dog story from childhood so this will likely be no different.

My childhood dog was named Frosty. Frosty arrived in early to mid-December. I was about 8 years old.

Her name came from the snow outside and her sort of whitish fur. Her Heritage? Mixed to say the least, and certainly no discernible breed. Medium size with a disproportionately large body and disproportionately small head, which made keeping a collar on her next to impossible. A couple of paw swipes and the collar was off.

Previous home? The dog pound. And like most pound dogs, Frosty was eternally grateful for her new home. I know that feeling.

Of all the dogs I’ve ever met, she might be the smartest. No, it’s not because she was my dog and my colleague for many years. She earned her reputation for being smart.

She’d walk anywhere without a leash and obey a variety of commands. She was also very sneaky and would go into stealth mode moving around the house. When outside she met her obligation as a dog by pretending to chase squirrels and rabbits. These efforts seemed more for show than anything serious.

She was great at keeping secrets. I would tell her my innermost thoughts and she never disclosed them to anyone. A couple of traits I remember most.

She was great at warming the bed.  My room was a dormer with no separate heat duct. My father liked to turn down the heat at night – and I mean way down – so my room was always chilly in the winter. Frosty would come to the rescue, sleeping at the foot of the bed and serving as a wonderful second blanket.

Feeding time was also a memorable experience. The kitchen was perpendicular to a hallway with a wooden floor. Her food came from a can – I mean, who knew then about gourmet dog food?

With the sound of the electric can opener, Frosty would race down the hall. She’d try to turn into the kitchen but always slid past the opening. Then, she’d turn around and would race into the kitchen. The routine was always the same and always fun to watch.

Frosty lived 15 or so years. I was out of college and married when she finally succumbed to cancer. I suppose in terms of dog stories, Frosty was nothing special. She was a mutt who hung around some kid and then became a companion to the kid’s father when the kid went off to college.

There’ve been other dogs in our life after Frosty. Ralph, a St. Bernard, was our fraternity mascot in undergrad. In Michigan, our neighbor’s dog, Mitzi, was crazy about broccoli. In California, Jeanie was a wonderful neighbor. In Charlotte we’ve been fortunate to be occasional caretakers for two Havanese – first Max, then Rocket. All the dogs have been fun.

But to me, Frosty was special. More than just a dog. Frosty was a friend. Frosty was someone I could talk to. Someone whose situation I could relate to. I miss her dearly. Thanks for everything Frosty.

#349 GM EV-1: Story Behind the Story. Inside Conspiracy? (Part 4)

08 Sunday Sep 2019

Posted by Jordan Abel in Corporate Policy, General Motors, Personal Stories, Uncategorized

≈ 1 Comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.  

The past few entries have been a break from the craziness in Washington.  In Entries #343-#345 I included some observations about my time working with Lee Iacocca, who died July 2.  Entry #346 started discussing another project that continues to generate considerable interest — the GM EV1, the first modern electric vehicle, which was introduced more than 25 years ago.

There are two sides to the EV1 story — product and non-product.  The product side has been reasonably well documented.  In my view, the non-product side of the story is far from complete, and what’s been told so far is misleading.  The series of entries — I actually do not know how many — will attempt to provide addition insight.  The series will be a good diversion from the madness in Washington and offer a good lesson or two, I hope. (If you have not read Entries #346-#348, suggest you do so before reading this entry.)

As described in previous entries, there was a dichotomy on the GM EV-1 program. The public, the media and most government organizations were interested and viewed very positively GM’s efforts to develop and introduce an electric vehicle. Inside GM, the view was just the opposite. Many GM executives intensely disliked the EV-1 program and considered it a waste of scarce funds.

An example of the public support was the number of people who contacted the program seeking information. When the program kicked off, there was no internet. Hard to imagine now but true, no internet. The primary contact was via an 800# and some contact by snail mail. The 800# was staffed by a firm which I had used at Buick.

The firm kept a record of every contact. If you were a first-time caller, you also received a response letter written on executive stationery, which I hand signed with a fountain pen. If I knew anything about the location or something else that might be of interest to the recipient, I would write a short note in the margin.

Over roughly a two-year period, I signed about 25,000 letters. It was not uncommon to return from a week-long business trip and have a stack of 300-400 letters delivered to the house waiting for me to sign.

Did this letter writing effort have an impact? For maybe 10 years after the program, I would be introduced to someone who would say, “Oh, I know you.” I would ask how they knew me since we were just introduced. “You wrote me a letter.” Then often as not the person would reach into the desk and retrieve the letter.

Most people seemed to retain the EV-1 brochure, which was sent along with the letter. Like many efforts on the program, we broke the mold for what was considered a standard car brochure. The advertising manager on EV-1 was Amy Rader, a history major from Princeton. Amy thought we should have a different kind of brochure. She managed to convince the Robert Frost Foundation to allow EV-1 to be the first commercial use of his works. The EV-1 catalog, of course, was on recycled paper.

Contact with the EV-1 group was not limited to the United States. One day we received a package from a group of high school students in Bulgaria. Somehow they’d heard about the program (remember pre-internet) and completed a class assignment centered on the EV-1. When finished with the assignment they sent us a copy.

Unfortunately, the widespread interest in EV-1 fell on deaf ears inside GM. Part of the cause was frustration among many GM executives with 1980’s chairman Roger Smith diversion of cash from product development and marketing programs. As noted in an earlier entry, during the 1980’s Smith purchased Hughes Electronics, Electronic Data Systems, stock held by Ross Perot associated with EDS purchase. Also, Smith diverted a huge amount of cash to start Saturn. GM EV-1 was also tainted because Smith had it developed in secret by a company in California. He then held a surprise introduction at the LA Auto Show, including the statement that GM would produce EV-1.

While Roger Smith’s follies festered frustration and anger toward EV-1, some of us on the program could have done a better job trying to convey the value of EV-1 to executives inside GM. We did not spend enough time making sure our colleagues at the GM operating divisions understood how the EV-1 program could benefit GM and benefit the operating divisions.

However, even that effort might not have overcome what seems to have emerged over time as the death knell of the EV-1 program. The cause of death was the view by the financial staff that EV-1 was nothing more than a cost center. As someone who cut his teeth on the GM financial staff, I can sort of understand that view, although I do find baffling the lack of enlightenment about the non-product value that EV-1 generated for GM.

The “cost-center” view may have been a cover for at least two other actions. The first was that GM kept claiming most, if not all development cost associated with EV-1 had no other application. Yet, as EV-1 was being developed, elsewhere in GM there were efforts to incorporate many features of EV-1 into regular production vehicles. If one were to track incorporation of electronics into regular production cars/trucks, there was a huge jump after EV-1. I like to remind people that even though GM eventually cancelled EV-1, one the major benefits of the program was accelerating the use of electronics in vehicles.

The acceleration of electronics should have been fully supported by the financial staff…but it wasn’t. At the time of EV-1, many electronic features carried a price premium. Yet, the incremental cost to produce many electronic features was almost nothing. With the opportunity to use electronics to increase profit margins on most every car and truck, why was the financial staff so emphatic that EV-1 was a cost center?

The second reason for the “cost-center” claim is more sinister and one I’ve never heard discussed publicly. I reached the more sinister conclusion based on: (i) early training to be an actuary, which includes trying to find patterns out of seemingly random events; (ii) studying the history of General Motors; (iii) having worked with most of the financial executives involved.

My sinister view is the EV-1 happened to be a convenient mechanism for implementing a conspiracy by the financial staff. A conspiracy by the financial staff is unlike the conspiracy implied in the movie “Who Killed the Electric Car?” The movie suggests a conspiracy among various car companies and other organizations associated with electric vehicles. As noted in an earlier entry, I think the multi-organization conspiracy theory presented in the movie is simply not true.

Ok, then what was the conspiracy inside GM led by the financial staff? And why?

Higher-level finance executives knew that actions during Roger Smith’s reign had seriously eroded GM’s earning power. Some of this erosion had been hidden by a number of accounting changes. With that understanding, these executives knew the next chairman of GM would have a very rough time trying to stabilize the company and trying to rebuild earnings.

GM had a long tradition of the chairman coming from the financial staff and the president coming from operations. So here are my questions. Who was chosen to succeed Roger B. Smith as chairman? A financial guy? No, a guy from the operating side. Who was chosen to be president? An operating guy? No, a financial guy. Seems a bit odd, huh? Maybe a bit Machiavellian?

Robert Stempel, who was chosen as chairman to replace Roger Smith, was the quintessential engineer. Stempel had a stellar track record in operating roles at Pontiac and Chevrolet but no in-depth exposure to or understanding of finance. No surprise that Stempel was a big supporter of EV-1 since much of his career involved new product development.

The new president, Jack Smith (no relation to Roger Smith) was the quintessential finance guy with almost no experience in US operations that would help him understand how the operating divisions and the supporting dealer organization worked. An example – during a meeting I mentioned EV-1 was generating a high level of interest among teenagers. Smith replied, “15 year-olds don’t buy cars!” True, but just from a pure economic standpoint that 15 year-old will likely purchase at least 10 cars/trucks in his or her lifetime, and probably more. And who doesn’t remember which brand cars/trucks were “cool” when they were 15 years old?

So, was there really a conspiracy? Was there really a coup d’état at GM? Did the senior financial executives setup Stempel, knowing GM earnings would be rocky the first few years post Roger Smith? If Stempel demonstrated he was unable to stabilize GM, would the financial staff be justified asking the Board to replace Stempel with a traditional finance guy in order to “save” the company?

Stempel faced another problem, which was not unexpected. In the early 1990’s, the US economy slid into a recession. As GDP and personal income declined, predictably so did car sales. GM profits also fell. While Stempel continued support for the EV-1, the recession forced GM into a difficult choice. The loss of market share during Roger Smith’s reign meant fewer vehicles to cover fix cost. Plus, the diversion of cash for Smith’s various projects, especially Saturn, meant GM had no cash reserve.

GM needed to cut costs and few alternatives were available. Product programs and marketing programs at the car divisions had already been raided to fund Roger Smith’s various projects. Closing Saturn, even though it was bleeding cash, would have been a PR disaster.

What was on the table for cutting, at least from the financial staff’s perspective, was EV-1. I agree and understand that sometimes immediate needs for cash overtake future considerations, even if the long-term consequence may be negative. However, cutting EV-1 made little economic sense. The cash burn rate was not that great. Much of the development could be applied to and increase profits of other GM cars/trucks. Plus, EV-1 was GM’s only bright spot. Even with all the other problems inside the company, GM’s public image continued to improve because of EV-1.

But did that matter? Stay tuned. My apologies. In Entry #347 I promised to talk about the dynamics of the meeting the day the music died. I’ll do that in the next entry.

#348 More about EV1 (Electric Vehicles): Story Behind the Story (Part 3)

26 Monday Aug 2019

Posted by Jordan Abel in Diversions, General Motors, Personal Stories, Uncategorized

≈ Leave a comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.  

The past few entries have been a break from the craziness in Washington.  In Entries #343-#345 I included some observations about my time working with Lee Iacocca, who died July 2.  Entry #346 started discussing another project that continues to generate considerable interest — the GM EV1, the first modern electric vehicle, which was introduced more than 25 years ago.

There are two sides to the EV1 story — product and non-product.  The product side has been reasonably well documented.  In my view, the non-product side of the story is far from complete, and what’s been told so far is misleading.  The next few entries — I actually do not know how many — will attempt to provide addition insight.  Stick around.  The series will be a good diversion from the madness in Washington and offer a good lesson or two, I hope. (If you have not read Entries #346 and #347, suggest you do so before reading this entry.)

In-house development of GM EV-1 begins. At the 1990 Los Angeles Auto Show Roger Smith, then GM chairman, introduced the first modern electric vehicle (EV-1) and proclaimed GM would produce it. As described in Entry #347, the concept car introduced in LA had been developed in secret by a company with no affiliation to GM. Formal development and production were to be inside GM.

Soon after the announcement in LA, the program kicked-off inside GM. The program manager was selected and then initial staff members recruited from different divisions. Additional staff was added as the program progressed. The EV-1 program was headquartered in the Advanced Engineering Building at the GM Tech Center. Being housed in the Advanced Engineering Building reinforced the impression, both inside and outside GM, that an Innovative product was being developed.

Another decision was to not assign the EV-1 to an operating division — Chevrolet, Oldsmobile, etc. On the plus side, not selecting the operating division helped avoid the EV1 being pushed aside by the designated division and having EV1 resources diverted for near-term marketing activities. On the negative side, not selecting a “division home” for EV1 reinforced the perception among many operating division executives that the EV-1 was part of Smith’s portfolio of projects that diverted cash from critical product development and marketing programs, which in turn, caused GM to lose market share.

One of the benefits of hindsight is the opportunity to ask, “What went wrong during the EV-1 program?” And then ask, “What did I do or not do that might have contributed to what went wrong?”

Over the past 20 years or so, I’ve been asked to discuss various aspects of the EV1 in different forums — public presentations, media interviews, guest lecturer at a university, even a movie. With each one of these “events,” I’ve tried to assess how different decisions might have affected the outcome of the program, both positively and negatively.

This series of entries, of which this is the third, attempts to analyze the “non-product” side of different activities. I have stated repeatedly in the various forums that I believe the technical limitations of the EV-1– limited range, 2-passenger seating capacity, e.g. — were not the underlying causes for GM pulling the plug on the EV1. Some of the technical limitations have been used as excuses, but were not really the causes.

What were the causes?  Before pointing fingers at others, it’s always a good idea to first look in the mirror. Most of my role at EV-1 the project was to help manage a team that focused on educating groups outside GM. The groups ranged from utilities to fire-and-rescue organizations to Federal and state-government officials to the media to the general public. While most of the efforts were in the US, we also met with officials in Europe.

The efforts of the team were incredibly successful. Even though our marketing and promotion budget was a mere fraction of the budget for the operating divisions, the team’s efforts, as measured by the amount of media coverage, resulted in a significant increase in the public’s awareness of electric vehicles and a significant increase in positive perception of General Motors.

If memory serves correctly, over a roughly three-year period, the EV-1 program generated more positive publicity for GM than the rest of the company combined. (As we’ll discuss in a future entry, all that goodwill and more was lost when GM decided to kill the program and crush all but a few EV-1’s.)

So with such a positive track record, what could have been done differently? Frankly, what did not occur to me at the time, and I don’t recall anyone else discussing this either, was the need to present to the operating divisions — Chevrolet, Buick, etc. — the same type of educational program about the EV-1 as we presented to outside groups.

While many staffers on the EV-1 program had been in the divisions that suffered because of cash diversions to fund Smith’s projects, I’m not sure any of us fully appreciated how negatively our former colleagues at the operating divisions viewed the EV-1 program. We were all enamored with the idea of an electric vehicle and assumed everyone else inside GM was equally excited.

Clearly not everyone was. An example was a return to my former division, Buick. After working many years helping position Buick for the future, I thought the EV-1 would be a perfect fit for Buick and its dealers, many of whom I knew personally. My thinking was the EV-1 could attract younger buyers to Buick, give dealers a sporty model in the showroom to attract new floor traffic and allow Buick to leverage interest in EV-1 among younger people to help build long-term brand loyalty. My rationale, however, when presented to the Buick general manager, fell on deaf ears. Buick was not interested in any association with the EV-1.

Buick and the other operating divisions were not alone in poo-pooing the EV-1. Somehow, we managed to get on the “Do Not Call List” for a number of staffs. Part of the conflict stemmed from assigned responsibilities. For example, EV-1 was the only group outside of the corporate staff whose responsibility included “government relations”. While our dealings with the government were restricted to topics associated with electric vehicles, we were allowed to approach legislators, government agencies and staff without first seeking approval of the corporate “government-relations” staff.

To me the limited scope of our government-relations activities made perfect sense. If a goal of the EV-1 program was for those in government to understand requirements for a successful introduction of electric vehicles, then the group charged with the introduction should be making contacts with various government entities. In my view we were judicious in our approach and diligent about keeping the corporate staff informed of our activities.

Were we successful? Like the group’s efforts in educating the public about electric vehicles, I think we did a good job educating legislators, legislative staff and a number of agencies. We also worked with other auto companies to ensure there was a consistent message to government about how it could help support the development and introduction of electric vehicles.

So what could go wrong? Let’s start with the relationship with the corporate government relations staff. I can state categorically there was no intent on our part to have the relationship go sideways…but it did.

Scene: Executive dining room at the GM Tech Center. Table for two. At the table are GM’s chief environmental lobbyist and me. Part way through lunch the other GM executive (I’m withholding the name intentionally) leans over the table and says, “Dabels, you’re my worst enemy.” My response, “How can that be? We work for the same company.” His retort, “You’re my worst enemy because my job is to convince Federal and state legislators there’s no demand for electric vehicles and you’re out there proving me wrong.”

The conversation continued, rather politely, but without resolution. The lack of resolution stemmed from our instructions. He was to promote a corporate policy that was in direct conflict with the policy the GM EV-1 group was to promote. We finished lunch and then left to carry out our respective instructions.

Inconsistent internal policies within GM were not uncommon. Another rift, which will be discussed in the next entry, was how the financial staff viewed the EV-1 as a cost center, and not a marketing opportunity. Focusing only on cost created an environment where the financial staff placed no value on improved corporate image, no value on increased future buyer potential, no value on brand loyalty, and no value on myriad other non-product attributes that often differentiate one brand from another and can lead to higher market share and earnings.

My view?  Supporters of the cost-center perspective ended up killing the program. The next entry will also provide some insight about what happened during the meeting the day the EV-1 music really died.

#347 GM EV1 (Electric Vehicle): Story Behind the Story (Part 2)

14 Wednesday Aug 2019

Posted by Jordan Abel in General Motors, Personal Stories, Stupid Is as Stupid Does

≈ Leave a comment

[Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.]  

The past few entries have been a break from the craziness in Washington.  In Entries #343-#345 I included some observations about my time working with Lee Iacocca, who died July 2.  Entry #346 started discussing another project that continues to generate considerable interest — the GM EV1, the first modern electric vehicle, which was introduced more than 25 years ago.

There are two sides to the EV1 story — product and non-product.  The product side is reasonably well documented.  The non-product side story is far from complete, and what’s been told so far I think is misleading.  The next few entries — I actually do not know how many — will attempt to provide addition insight.  Stick around.  The series will be a good diversion from DC madness and offer a good lesson or two, I hope.

(If you have not read Entry #346, suggest you do so before reading this entry.)  On top of the array of his decisions to divert cash from developing and marketing new products, Roger Smith (GM CEO) hired McKinsey & Company (consulting company) to study and determine if GM should be reorganized, allegedly to streamline operations.

As someone trained in finance, I agree that some improvements in operations likely were needed.  At the same time, those improvements could have been accomplished without a reorganization. Just for some perspective on relative size of GM at the time, Buick Motor Division generated more revenue than the worldwide operations of the entire Goodyear Tire & Rubber Co. Chevrolet Division was more than two times the size of Buick. In addition, under the then current organization structure, GM had been extremely profitable for decades. So why would anyone want to reorganize?

When I was interviewed by McKinsey for the study, it was clear from the questions that Smith had already decided to reorganize the corporation. The study was a sham and used as a front to justify the decision. The reorganization, or so we were told, would streamline product development and eliminate redundant cost.

Not part of the study was the value of “organizational loyalty.” Smith never spent time on the revenue side with a US operating division — Chevrolet, Cadillac, etc. If he had spent time, he might have understood how most employees felt about “their” division. Many people at Buick, for example, whether in field sales or on the assembly line, considered themselves part of the “Buick family.”   At the time of the “study” Buick had been operating in Flint, MI for more than 75 years. Many workers were 3rd, even 4th generation. Same type of history existed with many hourly and salaried employees at Chevrolet, Pontiac, Oldsmobile, Cadillac and GMC Truck.

For many of the same workers, even though their respective operating division was part of General Motors, the other GM divisions often were viewed as competitors.  Oldsmobile was considered a competitor by many people at Buick and vice versa.   While this might seem a bit unusual to many outside GM, I personally believe the sense of loyalty to a particular operating division was one of GM’s strengths.

The reorganization ignored the “emotional bond to the division” of the various employees. The reorganization created two major operating groups – CPC, which consisted of Chevrolet, Pontiac and GM of Canada – and BOC, which consisted of Buick, Oldsmobile and Cadillac. In addition to now being grouped with a former competitor – Buick and Oldsmobile, e.g. — the name of the group, “BOC” changed the alignment of the position in the marketplace of two divisions.

Since the 1920’s, Buick had been positioned higher than Oldsmobile in the GM hierarchy and higher in the car-market pecking order. Yet, the BOC name implied Buick as being lower on the pecking order than Oldsmobile.

Another example of the people driving the reorganization being incredibly tone-deaf was the names initially assigned to the “manufacturing-related” groups within BOC.  Names for these groups were apparently chosen by people who never worked in communications or marketing. Or, if they had worked in these areas, the names assigned were to thumb their nose at those responsible for the reorganization.

The initial names for the groups were etched on large metal signs and installed at the HQ buildings. The morning after the installation I saw the sign driving into Buick’s office.  The sign noted the Flint Automotive Group would be co-located in the Buick HQ building. At Oldsmobile, I assume there was a sign indicating the Lansing Automotive Group would be co-located at Oldsmobile’s HQ.

After a quick chuckle and a head shake, I asked someone in the Flint Automotive Group if anyone had considered the initials of the group — “FAG”.  The Lansing Automotive Group initials were “LAG”. Apparently no one had considered the initials.

After the inquiry, the names were quickly changed but another example of someone making decisions but not paying attention to anything other than what was considered a possible cost savings. The inept “non-financial”-related decisions — group alignment, group names, sub-group names, etc. – never set well with most employees and the ill-will towards Smith continued at least into the 1990’s, past the announcement of the EV1.

As if it were not bad enough that Smith diverted huge amounts of cash to non-core projects that diminished GM’s competitive position and earnings power, Smith was a control freak. Smith seemed to have to make all key decisions, even if he knew little or nothing about the topic. An example was when Buick sought approval for the introductory MSRP of the Reatta, a 2-passenger near-luxury car.

Buick had completed extensive research about consumer expectations for the MSRP. Two different research methodologies were used and results of each method suggested a price of less than $20,000 ($1985). Research also indicated a price above $20,000 was a psychological barrier and would reduce sales potential significantly.

Buick presented the research findings and the ~$19,950 MSRP to the Price Review Group, whose members consisted of various GM executives. While we were making the presentation and discussing the findings of the research, Smith interrupted the presentation and stated, “The MSRP is going to be $25,000. Next item on the agenda.”

So the Reatta was introduced with about a $25,000 MSRP. What happened? The Reatta had great visual appeal and consumer interest, but sales never achieved potential. Why? Rather than argue about the correct MSRP, a better indicator of value is to look at what happened in the used-car market.

The used-car market sets prices on what customers will pay, not what a manufacturer claims the price should be. A year or so after introduction, if one applied the traditional depreciation schedule to the Reatta, the introductory MSRP should have been about $20,000 (just what the research indicated and what Buick proposed), and not Smith’s demand of $25,000. The result? Smith’s arbitrary “seat-of-the-pants” 25% premium on the Reatta basically killed the program…and with it GM lost another opportunity to build market share and make money.

Buick was not alone in being subjected to Smith’s arbitrary decisions. All divisions suffered. I’m just not as familiar with some of the details since I was focused on activities at Buick.

With no love lost for Smith among a wide swath of GM executives, along comes the GM electric vehicle, the EV1. To add a little salt to wounds inflicted by Smith, how did the EV1 concept car get developed? Through GM Design Staff? Developed in conjunction with an operating division? No, the EV1 was developed in secret by a company located in southern California, called AeroVironment.

How are GM executive introduced to the EV1 concept car? Showings at the GM Tech Center? An in-house video?  No. The executives found out when the EV1 (called the Impact at the time) was introduced at the 1990 Los Angeles Auto Show. The introduction in Los Angeles also included Smith’s surprise proclamation that GM would put the EV1 in production.

Just think about what’s happened the decade preceding the surprise introduction of the EV1. Smith’s decisions included diverting cash to: (i) buy Hughes Electronics; (ii) buy Electronic Data Systems (EDS); (iii) buy back all the stock owned by Ross Perot as part of the EDS purchase, (iv) start yet another GM division, Saturn, which then never made money; (v) reorganize a company that had essentially printed money since the early 1920’s; (vi) arbitrarily price vehicles (I’ve spared you other stories about how Smith put the kibosh on breakthrough advertising and marketing ideas at Buick); (vii) focus on profit per car rather than market share.

The effect of these decisions was hugely negative. During Smith’s reign in the 1980’s, GM lost of 10 points of market share – equal to five (5) assembly plants.  Plus, GM laid off tens of thousands of employees.  Some of the supposed cost savings from these plant closings were never realized as many hourly employees continued to receive full pay even though not working.  The net result of Smith’s actions was a loss of tens of billions of dollars profit and a drain of cash for future product development and marketing. And now Smith develops an electric car in secret and the first time most executives became aware of the EV1 and the commitment to produce was the media coverage of the LA Auto Show.

So if anyone wonders what attitude executives in the operating divisions had toward the EV1, now you know why there was little, if any support at the beginning of the program. The lack of support eroded as the program continued and GM continued to lose share and cash.

The next entry will begin to discuss conflicts that emerged inside GM after the program started and Smith retired. For example, one GM executive told me over lunch, “Dabels, you’re my worst enemy.” Stay tuned.

#345 Personal Observations. Iacocca’s Genius. Leveraging What’s at Hand. (Part 3 of 3)

28 Sunday Jul 2019

Posted by Jordan Abel in Personal Stories

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[Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.]  

As noted in last week’s entry, I thought it might be interesting to present information about Lee Iacocca that has been overlooked or generally not discussed in the media. None of the stories are too personal, embarrassing or disclose confidential information. However, these stories are what I remember most about Lee Iacocca. I hope you find them interesting. [If you missed entry #343, which includes how I met Lee and our working relationship, you might want to read before proceeding. #344 in Part 2. ]

When writing the personal observations about Iacocca, I asked myself, what was his genius? Why was Iacocca so good at certain things?

As noted earlier, his lifestyle did not rival Mother Teresa’s. He also was not an intellectual giant. So what was his genius?

I think he excelled at taking whatever was at hand, making something useful, then finding a way to convince people to buy it. That seems odd for someone trained as an engineer. But, think about his success in the automobile business. The Mustang was developed in response to the Chevrolet Corvair Monza Spyder, for which Ford had no corresponding entry. Iacocca filled that hole by putting new sheet metal on a Ford Falcon chassis. The Mustang was wildly successful even though initial models were underpowered and built on a so-so chassis.

When he became CEO at Chrysler, what did he have to work with? A company with no cash, a product line essentially built on one chassis — the “K” platform — huge unsold inventory (some cars had been stored for so long at the Michigan Fairgrounds in Detroit) that weeds had grown higher than the bumpers) and, as I understand, an automatic transmission that nearly always failed.

Having any one of those problems might be enough to make a normal executive cry. But not Iacocca. Within a few years, Chrysler got back on its feet, started generating cash, paid back early the government-guaranteed loan and introduced a vehicle concept that revolutionized the industry the minivan. Pretty successful lemonade out of all those lemons.

And here’s a story you probably haven’t heard before. When he relocated to California after Chrysler, he bought a house in Bel Air. The house was vacant and had been caught up in the Savings and Loan quagmire of the early 1990’s. Yet, he converted the empty house into a beautiful, very comfortable home with exquisite landscaping. Another example of taking what’s available and making it much better.

Back to Chrysler. Situation #1 — Chrysler had no cash. The piggy bank was empty. The choice he faced was either secure a loan or declare bankruptcy. Moreover, the bankruptcy probably would not have been a reorganization of Chrysler but very likely a liquidation of the company – the end of Chrysler.

No bank would lend Chrysler the money without some guarantee of repayment. So Chrysler took a highly unusual step and asked the Federal government to guarantee the loan. In order to secure the loan guarantee, Chrysler had to reduce costs, including labor costs, both salaried and hourly. Yet, as late as the night before Iacocca was to fly to Washington and try to secure the loan guarantee, the UAW had not agreed to take a cut in wage rates.

I’m not sure of the exact location of the meeting, but apparently Lee asked Doug Fraser, president of the UAW at the time, to go for a walk. Iacocca offered Fraser a choice. Agree to lower wage rates and gain rights to buy 1,000,000 shares of Chrysler stock at a very attractive price, or Chrysler files for bankruptcy and 30,000 UAW members are out of a job. Fraser agreed to the wage cuts and supported the loan guarantee. The next day Iacocca went to Washington and secured the government guarantee.

Situation #2 — the “K-car.” For those old enough to remember, virtually every Chrysler model in the early 1980’s was built on a “K” platform. (In internal communiques, auto companies often use letters to designate different chassis since a number of models may be built using the same chassis.) K-car variants included coupes, sedans, a convertible and even a goofy looking stretch limousine.

The quality of the K-cars was marginal at best. To address the quality problems and build customer confidence, Iacocca began a series of TV commercials where he boasted, “If you can find a better car, buy it!” The commercials were audacious to say the least since finding a better car was easy. Yet, sales at Chrysler increased as people responded to Lee’s challenge.

Whether Lee or anyone at Chrysler knew about the following, I don’t know, but they certainly benefitted from it. A seemingly unexplainable phenomenon with building customer satisfaction — people are often more loyal and supportive of the company after a product they own has failed, as long as the failure was handled properly.

For owners of K-cars, Chrysler had such an opportunity since virtually every automatic transmission was destined to fail. Chrysler’s response to the failure was to provide the customer a rental car at no charge and deliver that rental car to the customer’s home or office. With that effort, Chrysler began to build positive word of mouth. The combination of Chrysler owners telling friends about their ownership experience and Iacocca on TV challenging people to buy a better car if you can find it, helped begin building a positive reputation for Chrysler.

Situation #3 –the Minivan. How did that happen? The minivan concept was a “hand-me-down.” The concept was developed originally while Iacocca was at Ford. For some reason, Henry Ford II did not support the concept. When Iacocca was fired from Ford, he asked for the design and HFII agreed. Iacocca joined Chrysler and then hired Hal Sperlich from Ford to implement the design at Chrysler.

The minivan was introduced as a 1984 model. However, given the lead times for development, certain key decisions needed to be made in 1982, if not earlier. I don’t know for sure but my guess is for the minivan, because Chrysler was still so short of cash in 1982, they were forced to upgrade the K-car chassis as marginal as it was. To minimize any negative publicity from the automotive press, Chrysler probably assigned a new letter designation to the chassis, with a letter far away from “K.”

Another early decision was whether the instrument panel should be offered in two versions, one with an airbag, and one without. At the time auto companies were offering airbags as an option since it was not clear the public would accept airbags.

Chrysler, again because of the cash shortage, could only afford to tool one instrument panel. In a huge leap of faith, Chrysler chose all airbags. Doing so was contrary to Iacocca’s previous position that argued against airbags. In classic Iacocca style, Lee cut another TV commercial promoting airbags as being standard on the minivan and implying that Chrysler was taking the lead in auto industry in trying to increase safety for the driver and the passenger.

What can we learn from these stories? The main theme seems to be take what you’ve been given and make the most of it.

In many ways Iacocca’s story is that of many Americans. The son of immigrant parents growing up in an area where there are few others like him — an Italian in Pennsylvania Dutch Country. Yet he survives and graduates from Lehigh University, then goes to Ford engineering. When he sees a long path to success in engineering at Ford, he switches to the sales department. Despite wild success and becoming head of Ford Division, then president of Ford, he gets fired. Then he moves to Chrysler, which is out of cash, teetering on bankruptcy and where product is abysmal.

But what does he do at Chrysler? He takes what little is on the table, leverages it and initiates an incredibly remarkable turnaround. Was that turnaround based on some wild innovation, some technological breakthrough? No. All the success came from looking at what was in front of him and making something out of it, and then rather audaciously promoting it with the public.

Originally I thought Iacocca’s lesson might be the oft-cited lesson of making lemonade out of lemons. But in retrospect, I think his genius and the lesson is much broader and deeper. The financial turnaround at Chrysler was impressive. But even more impressive was the incredible loyalty and support he built with people inside and outside Chrysler.

One incident in particular sticks in my mind. We were in Newport Beach (CA) having breakfast at a hotel prior to attending some meeting or conference. I should say we were trying to have breakfast since we were interrupted constantly by an array of people who came to meet Lee. They stopped at the table not for an autograph or to take a picture. They stopped to thank him sincerely for what he had done to help save Chrysler and to help restore the Statue of Liberty and Ellis Island. While I remember that day in particular, such interaction with everyday people was not unusual.

This entry is the end of the series of my personal thoughts and perspectives about Lee Iacocca. I’m grateful for the opportunity to have worked closely with Lee and thankful for the opportunity to share the experiences and lessons learned.  He was quite a guy.

 

#344 Lee Iacocca: a Personal Perspective (Part 2)

21 Sunday Jul 2019

Posted by Jordan Abel in Personal Stories

≈ 1 Comment

[Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.]  

As noted in last week’s entry, I thought it might be interesting to present information about Lee Iacocca that has been overlooked or generally not discussed in the media. None of the stories will be too personal, embarrassing or disclose confidential information. However, these stories are what I remember most about Lee Iacocca. I hope you find them interesting. [If you missed entry #343, which includes how I met Lee and our working relationship, you might want to read before proceeding.]

One characteristic rarely mentioned was Lee’s voice. You know how some people have voices that are just naturally loud? He fell into that category, big time.

Following are a few examples that come to mind. #1 — Was that an ass chewing?  The office location for EV Global Motors (electric bike company post Chrysler), as you might expect, was in a fairly high-end building in Los Angeles — corner of Wilshire and Westwood. A few of the individual offices had tall, heavy, solid wood doors.

When Lee and I had conversations about personnel, legal or financial matters, the door would be closed. I always thought the wood doors were pretty soundproof. That idea was shattered after one meeting when the staff asked me, “Did you just get your ass chewed?” My befuddled response was “No, why do you ask?” Staff responded, “Because his voice was so loud we heard it out here.”

As a sidebar, the only time I saw him really get mad was discussing legal bills. I remember one invoice in particular that was on the high side. He was furious at the amount and my assignment, which he described in very explicit terms, was to renegotiate the amount with the lawyer.

The subject set of legal bills was associated with what I would characterize as a frivolous lawsuit. An executive of the company had been offered what most would consider a very generous buyout. After presenting the offer, I suggested he review with counsel. Rather than taking the offer, which included a guaranteed payment even if he had another job in hand, which he had, the executive hired a well-known litigator in LA who took the case on contingency — I think only because of Lee’s association with company.

The case ultimately was dismissed and the employee and the hired gun got zero. However, the company spent a considerable amount of time and money on the case before it was dismissed.

Conversations with Lee about the case were unpleasant and because of his frustration, often loud. The conversations with counsel trying to renegotiate the invoice were equally unpleasant and often loud. On a positive note, I maintained a close friendship with counsel until his death a few years ago.

Voice Incident #2 was actually funny, even at the time. Lee and I were to visit a company near Palm Springs that made upscale golf carts. The purpose of the visit was to determine if the company was qualified to make neighborhood electric vehicles (NEV) for EV Global Motors. NEV’s were part of the long-term strategy to expand the product line beyond electric bicycles.

I was to meet Lee at his house in Palm Springs. Murphy’s Law took over that day and I was late. As I stopped at the guard house at the entrance to the development, I heard a voice that sounded as if the person were standing next to me shouting in my ear. But instead of next to me, there was Lee, probably 50-75′ away leaning out of the driver’s side of a minivan yelling, “Dabels, where have you been? Follow me!”

Voice Incident #3 I still find humorous as well. It occurred during one of our regular Sunday evening calls to discuss pending business issues. Over the previous few weeks, the company had experienced a problem with a key component of the electric bicycle. The president of the firm suppling the part was also to call me Sunday night and provide an update on fixing the problem.

Although Taiwanese-based, the supplier had an office in LA and with the same area code as Lee’s home. When the phone rang, I saw the area code 203. Before I could say “hello” there was a “hello” on the other end, to which I responded “Percy?” (name of supplier contact). My question led to a response in a rather loud voice, “Do I sound like Percy? Dabels, (expletive) do I sound like Percy?”

After a quick apology from me, the conversation turned to business at hand. However, whenever I hear the name Percy, my mind flips back to the phone call and the question, “Do I sound like Percy?”

#4, The Buzzer. Iacocca’s office in LA included the desk and the phone from his office at Chrysler. The phone was typical style for that era — touch dial pad and buttons at the bottom for incoming phone lines. On the far right at the bottom was a buzzer, which when pressed while Lee was at Chrysler, would alert the administrative assistant in the outer office.

One day over coffee, he asked me, “See that buzzer? After I nodded, he continued, “When I was a Chrysler, I could press that buzzer and in 15 minutes someone would be in here telling me about the economy in Kazakhstan or some other country. “You know what happens now when I press that buzzer?” I shook my head. “I’ll tell you what happens. Absolutely nothing.”

#5, The Tone of Voice. The final voice observation in this entry is how the tone of his voice changed when talking about family, especially the topic of growing up as maybe the only Italian in Pennsylvania Dutch country. Although he never said it directly, at least to me anyway, the tone of voice conveyed a certain loneliness about not being accepted. Like most of us, our childhood experiences have a profound impact on our behavior as adults.

For Lee, the childhood experiences were a great motivator to become successful, which he clearly accomplished. But even with all that success and glory, what never left him, as probably never leave any of us, were the childhood experiences and that little voice that kept asking to be accepted.

All for now. More next week.

#343 Lee Iacocca: a Personal Perspective (Part 1)

14 Sunday Jul 2019

Posted by Jordan Abel in Personal Stories

≈ 2 Comments

[Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution, a list of earlier revolutions and the author, Entry #1.

Periodically I write a “sense check” to assess whether in the next few years, a revolution in the US is still possible or whether the entire exercise is based on a statistical aberration — i.e., a roughly 50-year cycle between major upheavals in the US.  Most recent sense check, Entry #332.]  

Thought I would take a break for the second week in a row and write about something not linked to the Revenge Revolution. The topic for this entry, and likely a couple more, was prompted by the death of Lee Iacocca on July 2nd.

Without question, Iacocca was one of the greatest business people of the 20th century. When people talk about Iacocca’s accomplishments, two are usually mentioned: (i) being the father of the Mustang; (ii) leading the turnaround of Chrysler Corporation in the 1980’s. While each is a great accomplishment, there’s more to the story.

From my perspective, two often overlooked major accomplishments are: (i) leading the funding campaign for the restoration of the Statue of Liberty and Ellis Island. Restoring the Statue of Liberty/Ellis Island was of great personal interest to him. Iacocca’s parents passed through Ellis Island as immigrants from Italy; (ii) accelerating the implementation of airbags in cars/vans. Most comments about Iacocca and airbags center on his initial efforts to thwart the use of airbags. But he later switched and promoted the use of airbags.

Before going too far with the Iacocca story, I need to explain my relationship with him. We met in his post Chrysler days. He had moved from Michigan to Los Angeles and purchased the rights to an electric bicycle company. Longer term he wanted to expand the bicycle product line to include smallish electric neighborhood vehicles.

The electric bicycle needed a new brand name. He wanted to use “ebike.” The “ebike” name, however, was owned by a company that made electric motorcycles. I happened to be on the board of that company and an investor.

The president of the company, Scott Cronk, and I met to negotiate the rights. After the negotiations, Lee asked if I had a resume. Surprisingly I did, having just left the company that resulted in the move to Charlotte. When reviewing the resume, he ignored my career at GM, or at least never probed about it. What he did comment on was: (i) graduating from MIT, noting that “At least I know you can think,” and (ii) having been an adjunct professor at University of Michigan with the comment, “I like people who teach.”

Then he asked if I would spend two weeks at the company (EV Global Motors), analyze operations and give him an assessment. I thought it might be a fun gig, and if nothing else, great cocktail conversation.

Two weeks later we met in his office. My assessment started with a series of questions, “Why does the company do this? Why does a company own that?” At the end of the third or fourth question, I don’t remember which…and none of which he answered…he asked, “Want to be my CFO?” I said “Yes” and thus started my relationship with a truly interesting man.

There’s no question that Lee’s reputation in the business world for being hard-charging, demanding and disciplined is well-known and well-deserved. But underneath all that bluster and boisterousness — and yes the voice was very loud at times, even in casual conversation — there was the son of immigrant parents who had a rough childhood. Think about growing up as son of Italian immigrant parents in Pennsylvania Dutch country.

Just to be clear, let’s not go overboard and start thinking his personal life was like Mother Teresa’s. But we are talking about is an American hero, who like the rest of us, had a real desire for friends and loving relationships.

Fortunately for me, I was working with Lee at an early-stage company. EV Global Motors was not Ford and not Chrysler with large support staffs. As a result, I spent many hours in his office discussing and trying to solve a range of problems. Some of those discussions continued at the house over dinner, wine and, of course, a cigar.

If you want to get an idea what those conversations were like, pick up one of his books. Lee dictated most of the material for the books, which was then edited. My compliments to the editors, who did an excellent job of capturing the tone and rhythm of his comments, although a few likely expletives never made it to print.

At some point in our relationship, I asked Lee why did he think he was so successful. He became head of Ford Division at about age 35, which is a remarkable achievement in the auto industry. His answer was simple, “I made a plan for the week, the month and the calendar quarter. And then I stuck to the plan. Most guys didn’t have a plan and those who did have a plan didn’t necessarily stick with it.”

We used that approach for operating the company. Every Sunday evening we’d chat for maybe 15 minutes and outline issues for the coming week. On Mondays, after I formalized the “assignments” list, we’d have coffee and go over the plan in detail. We also had a rule. If the plan included an assignment that I or someone on the staff was supposed to complete the prior week but hadn’t, then Lee could question me. If he had an assignment that was not completed, then I could question him.

The discussions always included why the assignment hadn’t been completed and what was required to complete it successfully. A task on the list for 3 weeks with no meaningful progress toward completion was likely to be considered irrelevant and scrubbed. This method was simple but highly effective in keeping both of us and the staff on task.

A more interesting story is why Iacocca switched from engineering to the sales department. In the auto industry, that type transfer was unusual at the time, and probably still is. I also made an unusual transfer, moving from corporate finance staff in New York to marketing director at Buick HQ, Flint, MI.

The seminal “career moment” for Iacocca apparently occurred at a drafting table, probably at the River Rouge plant but I’m not certain. Imagine a very large area with a sea of drafting tables. At the very back of this sea of tables is a young Lee Iacocca. Behind his table is a walkway. If you’ve ever been in a Kahn-designed auto plant — vast open areas with large concrete support pillars — you’ll get the picture.

In the walkway behind Lee two men approached and then stopped at his table. One was Henry Ford I and the other was Harvey Firestone. Yes that Ford and that Firestone. After they left, apparently Lee looked at the number of draftsmen ahead of him and who he would have to pass to get promoted. That sea of people convinced him there was a better way to the top of Ford Motor Company. And that better way was joining the field sales staff.

So the Lehigh/Princeton-trained engineer heads off to the sales department and, voila, turns into one of the best automotive sales and marketing guys ever…and head of Ford Division at about age 35. In the next entry or two, I’ll write more about some untold or under-publicized stories. For example, stories about: (i) how Chrysler obtained the base design for the minivan; (ii) how Chrysler had so many unsold K-Cars for so long that in one major storage lot weeds had grown taller than the bumpers; (iii) the red phone on his desk; and the voice. And, oh, that voice. Could it ever carry.

#322 Artificial Intelligence Applied at the Micro Level – Personality Profiles

21 Monday Jan 2019

Posted by Jordan Abel in Personal Stories, Societal Issues, Tech Tsunami

≈ Leave a comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution and author, How the 5th US Revolution Begins and About the Author.  Many entries are formatted as conversations. Characters appear in a number of entries, with many entries building on previous conversations.  

Occasionally I do a “sense check” about the likelihood of a Revenge Revolution.  Entry #318 is the most recent “sense check.”  One more note — sometimes I write about another topic that does not quite fit the theme of the blog.  Those comments are available on the page titled “JRD Thoughts and Comments.” 

This entry is part of a series is about the coming “Technology Tsunami.”  The series addresses what might be involved and some suggestions for mitigating and even capitalizing on the opportunity.  Entries #321 and #322 are intended to describe AI in more understandable terms, using personal experiences as examples.  

The examples in Entries #321 and #322 are “early stage” uses of AI and selected to demonstrate: (i) applications that are easy to understand: (ii) AI-based applications have been around for a number of years; (iii) how AI can be used to increase the effectiveness of “gut-feel” profiling.

Entry #321 addresses how artificial intelligence (AI) could be helpful in certain business decisions – e.g., introducing new products and setting production schedules. Much of Entry #321 discusses an AI application to create clusters of people with certain tendencies — i.e., “birds of a feather flock together.” A cluster includes people more likely to buy a specific type or brand of product. The entry also discusses how over the years the size of clusters has shrunk from zip codes to neighborhoods to households.

Yet, even as the size of clusters has decreased over time, the focus has been on behavior of the group without regard to say behavior of person X or person Y. For reference, think of ads in Facebook or Google…or efforts to sway voters. All those efforts focus on behavior of groups, not individuals. In the bluntness of terms, the advertisers do not care about you as a person as long as their message persuades a certain percentage of the group.

Even though social media platforms and on-line retailers have lots of data about your purchases, the ads are still a game of percentages. Think of these efforts as macro-economics – focus on the behavior of groups and not individuals.

What about behavior of individuals? What about micro-group behavior. When focusing on the behavior of a specifically identified individual, can AI programs be useful…or harmful? The short answer is “Yes” to both.

As I noted a few entries ago and as a reminder, these write-ups are designed for general discussion and not an academic journal or graduate thesis at a university. So please read the entries accordingly. If you cannot let go of your academic bent, then stop reading and go do something else. You can rest assured the data are credible and the approach sound.

Stating the obvious – to have a successful relationship in business or personal life, the relationship must be positive. A positive personal relationship in business does not need to extend to personal life.   In fact, one can argue that it is better to keep business and personal relationships separate.

So how does one develop a positive relationship? A simple first step is trying to understand what makes the other person tick. How does he or she approach issues? How does he or she interact with other people? How does he or she determine what’s important?

At the end of Entry #321, there was a lead-in to this entry. In the lead-in I noted that, in general, women seemed much better than men at understanding what’s important/unimportant to another person. With age, many men begin to realize they’ve been “manipulated” by women for many years. If you’re a man…and don’t believe women have “manipulated” you…at some point you will probably realize what’s been happening for many years. Just accept the fact and move on. Just so there is no misunderstanding, most of the “manipulation” I’ve experienced has been positive.

So how do we better understand someone else? Can AI-based programs help?

An AI-based program that I’ve found extremely useful in helping me understand others is Myers-Briggs. A person’s Myers-Briggs personality profile is developed by the respondent answering a number of seemingly simple, but quite insightful questions. Based on my understanding, the answers are then subjected to a series of regressions, which create a personality profile consisting of four (4) categories, or general attributes. The degree or amount of a category trait is noted on a continuum.

For example, one category describes an individual’s preference to be around other people. At one end of the continuum is someone who absolutely loves to be around others (and dislikes being alone) – an “Extrovert.” At the other end of the continuum is someone who strongly prefers being alone and finds being around others discomforting at best – “Introvert.”

The continuum has a mid-point. Those on the say left side of the mid-point are labeled “E” for extrovert. Those on the right side of the mid-point are labeled “I” for introvert. The scale is not binary but relative so some people are more introverted/extroverted than others. While all category scales are relative, in some categories people tend to fall toward one of the extremes. General categories are:

  • How people interact with others – Extrovert: Introvert
  • How people gather information – Sensing (more analytical approach); Intuitive (more abstract approach)
  • How people make decisions – Thinking (fact-based, analytical): Feeling (more emotion based decisions)
  • How people tend to deal with the outside world — Judging (prefer structure and firm decisions); Perceiving (more open and flexible environment)

An individual’s profile is described by using one of the pair of underlined letters noted above. For example, one person’s profile might be INTP; another’s profile might be ESFJ. (If you want to learn more about Myers-Briggs and/or see what your profile is, lots of information on the web. Good start is https://www.verywellmind.com/the-myers-briggs-type-indicator-2795583. More on the history at the Myers-Briggs Foundation.)

If my experience is representative, one’s profile can change a bit over time or in different situations. For example, in assignments where I’ve been responsible for “blank-sheet-of-paper” kind of projects, I’ve tended to view topics/problems as a set of possibilities. In assignments where I’ve been trying to provide more structure and discipline to organizations, my profile leaned more toward yes/no decisions.

How does one use Myers-Briggs profiles in real-world? A couple of examples.

#1. 1980’s, Buick Motor Division, GM. Soon after being introduced to Myers-Briggs, another manager left and I inherited his department. While I was familiar with most of the members of the staff, I had never been responsible for direct assignments to those staff members.

One staff member had undergraduate and graduate degrees from Ivy League schools. After completing an assignment the person presented a report with recommendations that were about 180o from what I expected.

My first thought was how someone that well educated could have missed the mark so much. While going through the recommendations we were trying to figure out what went wrong. Rather than pointing fingers, the other person asked, “By the way, what’s your (Myers-Briggs) profile?”

When we compared profiles the answer to what went wrong became clearer. In that job, I was prone to paint the general picture for an assignment and not provide much detail. I was especially careful with this person given the educational background. Too much detail, or so I thought, would be an insult to the person’s intelligence.

When I conveyed my concern about too much detail as an insult, the response was, “Oh, no, I like detail.” Then the person proposed the following solution. When discussing an assignment, I would continue to provide detail until she (which you probably guessed by now) raised her hand, which meant, “I’ve got it. Stop.” We implemented the hand-raising system and it worked wonderfully.

#2. 2015, Energy company based in Houston. In the intervening 25+ years from Example #1, I’d been involved with a range of differing and challenging assignments – large companies, research organizations and start-ups. The Houston assignment was in an industry where I was familiar with the end product but not the production process.

The management team had extensive experience on the field-operations side but needed someone to help set up the financial structure and reporting systems to help the business operate without a large overhead staff. After a few weeks of learning the very basics, I suggested everyone on the management team complete a Myers-Briggs profile. To give you an idea of what I didn’t know about the industry, have you ever known a petrophysicist, let alone know what one does? Well, neither did I. But check YouTube. There’s a video titled “Petrophysics for Dummies”…and it’s very informative.

As usual, some members of the group supported the idea of comparing personality profiles, others grumbled but went along and a few refused. The CEO was probably the most supportive.

As a reminder, we you start comparing personality profiles with others, remember a different profile does not make one person superior to the other. The profile points out differences in the categories described earlier, not skill levels.

When the CEO and I compared profiles, there were marked differences in a couple of key areas. Understanding those differences helped me frame and propose solutions in a way consistent with his profile. While I continued to approach and solve problems in a way I was most comfortable, I understood that to be more effective when presenting to him, I needed to frame the recommendations in a way consistent with his profile. It worked.

These are but two examples of using Myers-Briggs. I have many others. Why Myers Briggs? Aren’t there other approaches to creating a personality profile? Yes. I used Myers-Briggs because it was the first approach I learned and one with the widest range of personal examples.

Is there a downside of knowing an individual’s profile? Yes. “Manipulation” can be either positive or negative. A widely discussed example how profiling a specific individual might be used negatively is Donald Trump. The question raised by many, “Has Donald Trump been manipulated by the Russians as well as some conservative media talking heads?” Whether one leans left or right politically, president Trump’s favorable behavior toward the Russians seems at odds with 70+ years of the post-WWII relationship between Washington and Moscow. Let’s hope the Mueller investigation makes the issue more clear.

But we should not think that Trump is the only person subject to manipulation. Over time, all of us may be targeted individually. As AI programs become more sophisticated and as people convey more answers to personality-profile like questions on their social media posts and/or continue to buy more goods on-line through say Amazon, it will become easier for AI-programs to migrate from targeting a certain percentage of a group to targeting specific individuals.

Minimizing the influence of such targeting will require considerable diligence on everyone’s part. More ideas developing such an approach in an upcoming entry.

Back to personality profiles. If you’ve never completed a Myers-Briggs (or similar) personality profile…or if it’s been a few years…I suggest you get on the web and complete one (see links earlier in this entry). If nothing else, comparing profiles is great cocktail conversation. But I think you’ll find your profile far more useful.

As far as the next AI-related blog entry? Not sure. I need to do some research before deciding. Thanks for your time.

#304 Republicans Supporting Trump Brainwashed? How One Supporter Was Cured. (Part 3)

19 Sunday Aug 2018

Posted by Jordan Abel in Back Asswards Thinking, Causes of the Revolution, Personal Stories

≈ Leave a comment

Readers: this blog is set in the future (sometime after the year 2020). Each entry assumes there has been a 5th revolution in the US — the Revenge Revolution. More about the Revenge Revolution and author, Entry #1.  Most entries are formatted as conversations. Characters appear in a number of entries, with many entries building on previous conversations.

Occasionally I break from the normal formatting and do a “sense check.”  Auditing one’s own work is problematic but I try to be objective.  Entries #300 and #301 are the most recent “sense checks.”  Your thoughts are welcomed and appreciated.  Thanks for your time and interest…and comments, please.

Scene: Jordan’s office, Washington, DC.  Jordan having coffee with Walt, a friend from college days.  Conversation begins entry #302.

(Last comment, previous entry.  Jordan:  “Walt, have you ever studied how people think after they’ve been brainwashed?”)

Walt:  “Are you implying that I’ve been brainwashed?”

BrainwashedJordan:  “Just asking a question if you knew the logic stream of people who have been brainwashed.”

Walt:  “Who else is in the office? Gelly still here?”

Jordan:  “No, she’s got a meeting in another building and will be out for at least an hour.  Why do you ask?”

Walt:  “Because I’ve never told anyone…well other than the psychiatrist.  Sure Gelly’s not here?  And you’re not taping this conversation, right?”

Jordan:  “She’s not here.  I saw here leave.  And, no, the conversation is not being taped.  What’s the big deal?”

Baldheaded ManWalt:  “OK, you’re right.  I was brainwashed by Trump.  It’s embarrassing to talk about it.”

Jordan:  “I can understand that.  How’d you figure it out?”

Walt:  “I don’t remember exactly.  It’s not like I woke up one morning and said, ‘Gee, I’ve been brainwashed.’”

Jordan:  “Well, what did happen?”

Walt:  “The realization was gradual at first, almost like baby steps.  I do remember being taken aback in late summer 2018 when Trump started to yank security clearances from former high-ranking people who’d been in the FBI, CIA and NSA.”

Trump KingJordan:  “What about Trump yanking the security clearances made you take pause?”

Walt:  “I remember seeing an interview with John Brennan…might have been Clapper but I think it was Brennan.  Anyway, the guy said a security clearance was not for the benefit of the individual but for the benefit of the country.  I’d never really thought of it that way.  And here goes Trump acting like a king and taking away security clearances from people who know more about threats to national security than he does.”

Jordan:  “And…”

Walt:  “…and I kept asking myself ‘Why take away the clearances?’  Then I began to think it was his fragile ego was hurt when some of these guys raised questions about the Trump Administration’s policies. It began to bother me that Trump’s actions to satisfy his ego could really hurt the country.”

Jordan:  “After that revelation, did you change your mind about a conspiracy among the US national security agencies to get rid of Trump?”

Ping PongWalt:  “Not all at once.  I bounced back and forth.  It was as if I was playing ping-pong by myself.  One day a conspiracy theory; the next day no conspiracy.”

Jordan:  “But each day you were less and less supportive?”

Walt:  “Gradually I became convinced there was no conspiracy.  One day I said to myself, ’Self, Trump is the problem, not the FBI or CIA.”

Jordan:  “Then what”

Walt:  “When I started to put claims of a conspiracy theory into a different context, then a lot of other claims Trump was making started to fall apart.”

Jordan:  “How long did it take you to change your mind?”

Humpty DumptyWalt:  “Once I got though the conspiracy analysis, then like the baby who now knows how to walk, the pace picked up considerably.  And finally, Trump became more like Humpty Dumpty.”

Jordan:  “Did you talk to anyone about your change of support for Trump?”

Walt:  “How could I?  For three plus years…during the campaign and then when he was in the White House…I’d tweeted about why Trump was so, so right.  To admit I’d changed my mind would have been embarrassing to say the least.  In fact, I still can’t talk about it.  You’re the first one who knows.”

Jordan:  “Well, I’m glad we’re talking about it.  But go back to the time you really started to change.  How’d the psychiatrist get involved?”

mirror-clipart_jpgWalt:  “As I looked in the mirror, I just couldn’t believe what I’d been doing.  I needed to find out why.  What had made me act that way?”

Jordan:  “So you found a psychiatrist?”

Walt:  “I first did some research.  In fact one of the experts on behavior modification was a professor who I think you took a class from at MIT.  Ed somebody.”

Jordan:  “Ed’s class was a seminal event for me.  Very insightful and frankly, changed my life.”

PsychaitristWalt:  “Well, I poured through a couple of his books.  Then I decided to see a psychiatrist.”

Jordan:  “Good for you.  How’d you find the right one?”

Walt:  “Looked through their stated specialties and a lot about what they had studied and where they studied.  Narrowed in down to a couple and then chose the one who was more familiar with Ed’s work…and who knew him professionally.”

TurtleneckJordan:  “Walk me through how you guys worked together.”

Walt:  “First couple of sessions were really me laying out: (i) what attracted me to Trump, sources of information I used, what actions I took, etc.; (ii) how I felt when Trump took certain actions or made certain statements.  Did I always support him?  Did I have any doubts?  The sessions were background information.”

Jordan:  “Then what?”

Walt:  “Next few sessions were trying to understand how I thought I had changed.  Content was much like you and I have talked about but a lot more detail.”

Jordan:  “After you laid out all the history, what was next?”

Walt:  “The next sessions were fascinating, frustrating and embarrassing.  Some of the time we talked about how people become brainwashed.”

Case StudyJordan:  “You became your own case study.”

Walt:  “I was a case study in a course I didn’t want to take.  Anyway I really had no idea I was being brainwashed.  For a long time, all Trump’s ideas seemed to make sense.  Trump seemed so right…and everyone who didn’t support him seemed so wrong.  The world was black and white.”

Jordan:  “But somehow you managed to break out of the brainwashing.  How did that happen?”

Wall BrickWalt:  “Look, I’m no brainwashing expert but as was explained to me, there are ‘holes’ in most brainwashing caps.  If reaction to an event or an idea goes through one of those holes, it accesses the pre-brainwashed mind.  Think of it as a being on either side of a wall or maybe as separate partitions on a computer hard drive.”

Jordan:  “For you the idea of Trump using security clearances for political reasons slipped through one of those holes.”

Walt:  “Yep, and at least part of me was accessing a different partition of my hard drive.  Part of me was back to my pre-brainwashed days.”

Coffee cup StarbucksJordan:  “This discussion is absolutely fascinating…but I need a break bad.”

Walt:  “Me, too, and I could use another cup of coffee.  Now that I’ve confessed, I can quit claiming Starbucks is part of a liberal conspiracy and is just a coffee shop.  Even more embarrassing for me, I like their coffee.”

(Continued)

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