Is Akerson a Fit for GM?
August 17, 2010
There was probably a collective groan throughout Detroit after it was announced that General Motors reached into the private equity talent pool to recruit its new chief. The way Cerberus Capital Management drove Chrysler into the ground will probably stand as one of the epic failures to come out of the asset class over the past decade. At least I know that I've cursed out Steve Feinberg on the multiple occasions my Jeep had to be towed this summer.
But Daniel Akerson, formerly a managing director and head of global buyouts at Carlyle Group, has a track record that should be a fit for GM. In fact, if I had to pick an executive that can undo all of the ill will Cerberus may have caused, he would probably be among the small handful of candidates that come to mind.
Before he ever made the jump to private equity, Akerson was an operator first. And his jump from MCI to Forstmann Little in 1993 was predicated on Akerson taking the helm of General Instrument. This was about 10 years before anyone in private equity had even conceived of the title "operating partner."
If you look at the General Instrument deal, the key point isn't that the investment yielded a 10x return for Forstmann Little; it's that the return was driven by a decision to pour money into research and development -- a strategy most assume is antithetical to the private equity archetype. In the process, Akerson helped transform the company from an aimless conglomerate best known for its race track tote boards to an industry in leader cable TV technology.
Akerson, after leaving Forstmann Little went, on to Nextel Communications, where he oversaw the company's transformation from an analog walkie/talkie provider to a true competitor in the digital wireless segment.
His next stint, at XO Communications, didn't go so well, as he left after the company entered bankruptcy protection. It's worth noting that reportedly Carl Icahn wanted to keep Akerson on board once he gained control.
So what will Akerson do for GM? Much of the heavy lifting around GM's turnaround has already been taken care of, to the point that the automaker is nearly ready for its re-entry into the public markets. Bloomberg, meanwhile, reported that he'll be there for at least three years, which implies his stay won't extend much further. That means Akerson's role will be to build a management team and set the company on a path to growth.
If he's successful, he'll help rebuild private equity's reputation in Detroit.
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Posted by: leo c | February 23, 2012 9:12 PM
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