GM hosted an analyst dinner last night with its CFO Dan Ammann, and they went deep into what GM's doing with its operational and financial controls.
Barclays was impressed, saying that it has a "greater appreciation" for what GM is doing.
Here are a few things that GM is doing much better, according to Barclays:
- Internal financial and budgeting controls are becoming more austere, and senior management is getting much more involved. For instance, senior folks now have a monthly meeting — which didn't exist before — to review budgets.
- Employees are being held more accountable for their actions and performance. One example is that groups are being assigned directly responsibility for the components of working capital that they're given.
- GM is focusing more on the company as a whole, instead of its individual divisions. Under the old way, employees were only loosely graded by the results of the company as a whole.
- It's also taking into account more outside views so that it doesn't get tunnel vision. It has hired direct reports externally and using benchmarking exercises to learn from.
It's a start and there's plenty more room for improvement, but Barclays is quite confident that GM is moving in the right direction. From the report:
"Given GM is relatively fresh out of bankruptcy, there are still many more internal procedures
and processes which need to be addressed before true efficiency can be attained. However,
we believe the progress made by management and the company as a whole is very real, and
there is strong momentum for further improvement into the future."
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