On a Clear Day …

Susan Docherty may be the most powerful woman in the automotive industry, but if she can’t win over skeptical consumers, General Motors won’t last another century.
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Docherty, shown here with the 2010 Buick Lacrosse, says GM needs to work “smarter, leaner, and faster.” Photograph by Jim Fets / Courtesy of General Motors

Don’t go looking for Sue Docherty to show up at a meeting in her black power suit. You won’t find it on a hanger back home or waiting for pick-up at the dry cleaners. It’s gone and forgotten. Well, almost. “It’s left my closet,” GM’s new vice president of vehicle sales, service, and marketing says with a wince.

It fit just fine, and was perfectly in style. Indeed, it was absolutely the appropriate thing to wear on the otherwise fine spring morning when General Motors Corp. ended its 101-year run by filing for Chapter 11 bankruptcy protection. “It was a day I never thought I’d see happen,” says the 46-year-old GM veteran, who recalls June 1, 2009, as “the worst moment in my career. … I’ll never forget where I was, nor what I wore.” And like a widow’s mourning suit, the black ensemble is something Docherty (pronounced DOCK-er-ty) has chosen to put behind her as she moves ahead, now one of the top “change agents” at the “new” General Motors.

When President Obama took to the airwaves on March 31 to announce that he’d rejected a bid for additional financial aid for Detroit’s two failing automakers, GM and Chrysler, he made it clear that they could not expect to continue business as usual at the government’s expense. The White House’s auto task force advised Chrysler to find a new parent before getting the second bailout — Fiat, as it turned out. With GM, the company was sent back to draft a draconian turnaround plan. In the end, that meant abandoning half the automaker’s North American brands, including the once-vaunted Pontiac, as well as the struggling Hummer, Saturn, and Saab divisions.

But the proposed cuts, sanctified by a federal bankruptcy judge in New York, took a more personal toll. About a third of GM’s dealers — roughly 2,000 in all — will either be shuttered or follow Saab and Hummer when they’re sold off (though some may be reinstated via binding arbitration). A score of plants, employing thousands of workers, have — or will be — closed. And where cutbacks traditionally affected hourly workers most severely, the pain of bankruptcy has been unusually indiscriminate of rank. On July 11, the day the company re-emerged as “GM Newco,” new CEO Fritz Henderson reported that a full 35 percent of the company’s senior executives would be fired, retired, or simply encouraged to find new jobs. Henderson himself resigned in early December.

Of course, that wholesale shake-up began even before the president’s glum announcement, when task force chief Steven Rattner dismissed GM Chairman Rick Wagoner. Following the bankruptcy, GM got a whole new board of directors. And myriad top managers have been turning in their keys to the executive washroom ever since, including Opel CEO Carl-Peter Forster, manufacturing boss Gary Cowger, and, in mid-October, marketing chief Mark LaNeve.

It was clear that LaNeve’s days were numbered when, immediately after the bankruptcy, he was stripped of his marketing duties, which were handed to septuagenarian Vice Chairman Bob Lutz. In mid-October, LaNeve’s responsibility for sales was transferred to Docherty, while the marketing duties given to Lutz were transferred to her in early December.

There’s an old adage in Detroit that it’s often better to be lucky than good. And Docherty’s luck was certainly with her when, in late October, the Windsor native was presented with a minor miracle. The preceding two years had required GM to make one glum pronouncement after another, notably on the sales front, but October yielded the first year-over-year improvement at the showroom level in 21 months. That it took so long was surprising, given that GM benefited from the “Cash for Clunkers” program last August. Despite her brief tenure, it would have been easy to bask in the spotlight.

“I can’t take credit,” she insists. “I wasn’t on the job long enough. What’s really needed,” she says, “is a humble appreciation that we have a lot of work to do.”

Docherty also thought it right to offer thanks to the frontline troops: the nearly 4,000 surviving GM dealerships that had to work hard to convince skeptical customers that the automaker would be around to provide sales and service. Docherty asked each of her sales team members to call five dealers to say thanks. “When I went to see her [that] morning,” says one of her staff, “she had already called more than five herself.”

There were more than a few observers who were surprised with Docherty’s appointment. She acknowledges that CEO Henderson had a “pool of talent” to draw from. And there are those who’d expected — even hoped — that GM would reach outside to fill the position in order to bring in “new blood,” in the words of one company consultant. “They talk about doing things a different way, but look at all the old faces. There’s really nobody new on the executive committee,” he says, referring to the eight-member team now making most of the day-to-day decisions that don’t have to be sent up to the GM board.

For her part, Docherty doesn’t deny there are some familiar names at the helm, but she says there’s been a significant amount of movement nonetheless. Already, GM Chairman Ed Whitacre Jr. has shifted several senior executives. “You bring in people from the outside only if you think you need to get fresh thinking,” Docherty contends, “but that doesn’t mean you can’t get fresh thinking from the people already in the company.”

There’s no question Docherty has had a lot of opportunity to broaden her viewpoint. Since joining GM in 1986, she’s lived in four different countries and moved 14 times. Before that, she earned two degrees from the University of Windsor — a bachelor of commerce with a major in marketing, and a bachelor of arts in economics. In 2004, Docherty had a chance to go back to school during a yearlong Sloan fellowship at Stanford University. “It was incredible to step out of this business and hear what was happening in other industries,” she recalls. “It provided a perspective I could learn from and bring back to the company. It was worth every dollar they spent to send me to Palo Alto.”

One of Docherty’s instructors was Eric Schmidt, then the relatively unknown head of Google. “It was a small class,” Docherty says, “and I got to hear a lot about the Internet which, for those of us from outside Silicon Valley, still seemed quite new. [Schmidt] said it would change the way people viewed the world of retailing, and I brought that back to Hummer. … The first thing I did was order a complete tune-up of our Web site and make absolutely sure we had a budget for digital advertising.”

GM was slow to grasp the digital realm — something it’s still struggling to catch up on since its reorganization. But the Internet isn’t going to fix everything, Docherty cautions. Much of what the company needs to do is learn how to work smarter, leaner, and faster. “Why do we do that?’” she often asks her staff. “In some cases, they say we always did a particular report. But if we don’t need it, we don’t need to do it. I’m a very driven, Type-A personality, but we have to do more with less, so the one thing I’ve changed about my leadership style is how I prioritize the things we need to do to generate results.”

Docherty, who admits she’s “not very proud” about having missed every family vacation in the last year, suggests that applies to her private life, as well. Prior to taking on her sales assignment, Docherty tried to make up for it — at least a little bit — by bringing 10-year-old daughter Alexis along for the day during a preview of a new Buick. “A lot of journalists were rolling their eyes,” Docherty recalls with a smile, but after missing a two-week family trip, “I wanted to see Alexis, and it was very rewarding for her to see me in my work environment.”

In her new post, it would be easy to let the business world’s demands overwhelm every aspect of her life, but Docherty says one of her new personal priorities is to get up early and work out every day. “If I’m not healthy,” she stresses, “I’m not good for my family or my company.” On the weekends, she’ll rise just as early, squeezing in a workout, answering e-mails, and reviewing paperwork before switching modes to “wife, mom, and caregiver.”

A baseball fan with a penchant for sports metaphors, Docherty met her husband of 15 years, Chris, at a Toronto Blue Jays game. When asked if Chris is also in the auto industry, Docherty throws no junk. “Thank God,” she says, “no.”

Chris, she says, is her “best friend and consultant,” someone who knows enough about her work to provide a good perspective, yet still maintain an outsider’s point of view.

As much as she picked up in Palo Alto, Docherty says the bankruptcy process has turned into the biggest learning experience of her career.

“Intellectually, all our brains have been on fire the last year,” she says. “I have three degrees … [but] during the last 12 months, I’ve learned more than I did in seven or eight years at the university.”

Now Docherty has to put that all into practice. One of her top priorities is driving down GM’s hefty spending on incentives — the most in the industry, at an average of around $4,000 a vehicle. The focus has to be on residuals — think trade-in values — rather than cash-back handouts.

There are signs this can happen when the company focuses on turning out the right products built to benchmark quality levels. The new 2010 Cadillac SRX crossover recently received a 52-percent residual rating from industry arbiter ALG, a stunning 21.5-point increase from the old model. On a vehicle like the SRX, with a transaction price that can top $40,000, that translates into an extra $8,000 in value after three years.

Another way to improve residuals is to pare back on leasing — which is often heavily subsidized. Before the bankruptcy, as much as 21 percent of GM products were sold via low-cost leases. The goal now, Docherty says, is to trim that to somewhere between 7 percent and 10 percent.

Then there’s a chance to turn lemons into lemonade. Perhaps not a good choice of words in a story about the auto business, but dropping four brands and 44 of the 78 nameplates GM offered, pre-bankruptcy, could be disastrous if not handled well. The challenge is to focus resources on building — and then marketing — the right models. The October sales numbers suggest GM is moving in the right direction, with 95 percent of the carmaker’s volume coming from the brands that survived the reorganization.

Though you’re not likely to hear it from Docherty, there’s a certain loneliness to being a senior executive at GM — a senior female executive, that is. A surprising number of top women managers have left the automaker in recent months, including Maureen Kempston Darkes, the head of Latin America, Africa, and the Middle East; chief environmental and safety officer Beth Lowry; and Saturn general manager Jill Lajdziak.

“Everyone’s curious about Docherty,” says Peter DeLorenzo, publisher of the oft-controversial Web magazine AutoExtremist.com and a frequent industry consultant on marketing issues. “She’s a GM lifer … in a system very few women have come out of, especially on the marketing side of the business.” Maybe being a woman is why Docherty brings “a different kind of energy” to the job than her predecessor, says AutoPacific auto analyst Stephanie Brinley. Then again, Brinley adds, maybe “it’s not important” at all that Docherty’s a woman; “It’s more about personality than anything else.” The new sales chief is decidedly “energetic and enthusiastic,” where LaNeve was “just pretty calm [and] matter-of-fact.”

Docherty’s appointment hasn’t been without controversy. There are those who contend she’s a self-promoter — a common criticism of rising stars, especially those from the distaff side — in the often-catty boys club of the automotive world. For his part, DeLorenzo says he’s sitting back, watching to see if Docherty delivers.

“She’s a work in progress [who] has a much tougher job than before the bankruptcy,” he says. DeLorenzo suggests it’ll take at least a year for the new, post-Chapter 11 General Motors to settle down enough to truly get a sense of Docherty’s acumen for her position.

By then, Whitacre has hinted the company could begin paying back at least some of the money it’s borrowed from the government.
And that’s something Docherty eagerly anticipates. “I think the day we pay back the government for our loans,” she says, “will be the best and proudest moment of my career.”

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