Auto Revolutions: John McElroy & Jason Stein on Shaping Industry Culture

[Transcript]

Jan Griffiths: 00:08

Welcome to the automotive leaders podcast, where we help you prepare for the future by sharing stories, insights and skills from leading voices in the automotive world with a mission to transform this industry together. I'm your host, Jan Griffiths, that passionate, rebellious farmer's daughter from Wales, with over 35 years of experience in our beloved auto industry, and a commitment to empowering fellow leaders to be their best authentic selves. Stay true to yourself, be you and lead with Gravitas, the hallmark of authentic leadership. Let's dive in.

Jan Griffiths: 00:58

This is a very special episode of the automotive leaders Podcast. Today, we celebrate our 100th episode. And I want to say from the bottom of my heart, thank you, thank you, thank you, to all of our loyal listeners out there, you know who you are. You're the leaders in the industry, who understand and recognize the massive transformation that we're going through and how this impacts culture. You are the authentic leaders, both now and of the future. So, thank you.

Jan Griffiths: 01:39

Joining me at the mic today are two people that I'm sure you know and love as much as I do, John McElroy. John is the influential thought leader in the industry. He's a journalist, lecturer, commentator, and entrepreneur. Do you know he created Autoline Daily, which is the first industry webcast of industry news and analysis. You know him for his knowledge on the industry. He's always talking about different facets of the industry and dissecting the inner workings of the auto industry. And as if that's not enough, we also have joining us today is Jason Stein. You'll know Jason, from his automotive news days as the VP and publisher of automotive news. He is now the owner and CEO of Flat Six Media. And he's the host of cars and culture on Sirius XM business radio channel 132. Jason is known for his unique storytelling ability and for producing compelling content. He's been doing it his entire career. And now he's focused on unique stories from business leaders to automotive legends, where he's focused on bringing automotive history to life and distilling some of the future trends. And so, it gives me great pleasure to introduce John McElroy and Jason Stein.

Jan Griffiths: 03:23

John McElroy, welcome to the show.

John McElroy: 03:25

Thanks, Jan.

Jan Griffiths: 03:27

I have been wanting to say that for a long time. And here you are. Jason Stein. Welcome to the show, again.

Jason Stein: 03:35

Thank you. Thanks for having me. And I've always wanted to say, "welcome to the show, John" too.

Jan Griffiths: 03:39

Well, today, we are here to celebrate the 100th episode of the automotive leaders podcast. And thank you both for joining me at the mic today.

John McElroy: 03:49

Congratulations, Jan. 100. That's got a nice ring to it.

Jan Griffiths: 03:53

Doesn't it? Yeah!

Jason Stein: 03:54

It does, Jan. Way to go!

Jan Griffiths: 03:55

Thank you. Thank you. Cool. Some of us are at episode 3,594.

Jason Stein: 04:03

And it's not you or me.

Jan Griffiths: 04:04

It's not you or me. That's right. That's right. Yeah.

John McElroy: 04:08

You're just pointing out how old I am.

Jan Griffiths: 04:11

No, no, no, no, I bet how successful you are, John, and how you were way ahead of your time and way ahead of the game when it comes to technology and videos and podcasting. But how about a few stats, right? We love numbers in our auto industry, don't we? So, let's take a look at some podcasting stats. There are over 4 million shows and a show is the umbrella and of course the episodes fall underneath the show. So, there are over 4 million shows. Now, shows that have that are considered active that have produced an episode in the past 30 days. So, shows that are publishing at least once a month. What do we think? Any guesses?

Jason Stein: 04:58

Five or 10?

Jan Griffiths: 04:59

Out of 4 million

Jan Griffiths: 05:04

359,000 out of 4 million. Why is that? It's because people totally underestimate what's involved in putting a podcast together. And the statistics show that most podcasts fail before they hit the 10th episode.

Jason Stein: 05:22

I'm not surprised. Are you, John?

John McElroy: 05:24

Well, you know, I think people give up too easily. You know, being in a media is not easy. Jason you know this. It takes a while to build an audience. And if you don't make it to 10, you gave up way too easily.

Jan Griffiths: 05:37

Yeah, you gotta be committed, right?

Jason Stein: 05:39

Agreed. A lot of hard work involved and research. Exactly. Commitment is key, Jan.

Jan Griffiths: 05:44

You got to be committed, and you got to be committed to your audience, and you have to know your message, and you got to keep going, and you will make mistakes. And I've made every mistake there is in the book with podcasting. There's no question. You got to just keep going. And the growth in podcasting is phenomenal. So, here's some more stats for you. When I started the podcast 2019 worldwide listenership 274 million. Right now, it's at 464 million, and it's projected to go to 504 million in 2024. In the US alone, those are global numbers in the US alone, podcasting is expected to go from 75.9 million to over 100 million listeners by 2024. This is the platform, it's growing.

John McElroy: 06:38

It's not only growing, it's killing broadcast radio. You know, streaming is killing broadcast television. Podcasting is killing radio. We're seeing a real technological change because of this.

Jan Griffiths: 06:49

Yeah. But Jason, you've got both, right?

Jason Stein: 06:50

Yeah, I'm on both. Exactly. So, Sirius XM, and on all of their satellite channels, 35 million subscribers still, by the way, but in addition to that, the fact that everything that's produced in there immediately goes on to every podcast platform. So, the combination of the two is at least one foot in the present and perhaps one foot in the future. But what I do know is that all of it is pointing to the consumer or the listener, wanting what they want, when they want it, which is just emblematic of the Amazon culture or anything else today.

Jan Griffiths: 07:00

That is so true. And the growth in the demographics, I find fascinating. Podcasting is hitting all demographics. So, we often think that podcasts, youngsters, right, Gen Z, are into podcasts. No, no, no, it's growing. For sure. There's a higher percentage in the younger generation. But one of the fastest growing areas in listenership is age 55. And up.

John McElroy: 07:53

Yeah, it doesn't surprise me at all, just for the reasons Jason just cited. People want to know what they want to know. They'd like to get into topics they want to. They love the format, which allows much deeper dives than regular broadcast does. You know where? You know, look, I'm a broadcast guy if you get 60 seconds on the radio. Wow. You know, if you get a minute and a half on television, holy moly.

Jan Griffiths: 08:17

Yeah. It's this this storytelling.

Jason Stein: 08:20

In my recent experience, Jan, over the last couple of years, especially during COVID, we had this little program at Automotive News once a week where we would talk to industry leaders in studio, on video and then distributed. Well, when we couldn't go into the studio in March of 2020. Started this crazy idea of a daily podcast. And the only problem with it was that it was daily. So, you had to come up with a guest, you had to come up with topics you had to fill the pipeline. But what I heard from folks during that time was, hey, it was great. I did my work during the day. I went for a walk in my neighborhood. And I listened to the program to connect with people who are normally at that time that I wasn't seeing. And so, I think that connectivity and the topics and the subject matters. And look, it all comes down to people. That's all it is. It's people's stories, and it's telling them in an effective way. And here we are in podcast land, and it's no surprise.

Jan Griffiths: 09:15

Yeah. And it's conversational. People want to listen to a conversation. People don't want to read corporate speak anymore, or something that's been sanitized a million times, right. They want to be part of the conversation. Let's just talk.

Jason Stein: 09:27

John's been talking to people, industry leaders, for 3000 shows and the ability to draw out the stories of those individuals and to make the corporate speak into personable into everyday individuals I think it's been the magic of what John has been able to do. And Jan, you and I are just trying to follow in those footsteps.

Jan Griffiths: 09:47

We are, right, we are the rookies. We're learning. Well, let's talk about our beloved automotive industry that we care about right down to the depths of our soul. There is tremendous transformation going on in this industry, we all know it. The transformation is very much focused on product. And as you know, the mission of my podcast is to focus on culture and leadership in the auto industry. My mission is to showcase those leaders who truly understand culture transformation in this industry and practice more of an authentic leadership model. And Stephen Covey. When I interviewed him on the show, he said at best, he said, "You cannot win in the marketplace without also winning in the workplace." John McElroy, what do you think about that statement?

John McElroy: 10:44

Well, it's spot on. It's absolutely true. I mean, if you don't have a motivated, dedicated workforce that comes to work every day excited to do new stuff that's going to make the product or the services that the company offers better. There's no way that you're going to compete against those that have that. And so, culture and leadership are probably in the auto industry, more important now than ever before. And it's because of this transformation to electric cars. And we can get into more than that. But it's more than just the product changing. It's how you go about doing all this, and how you unlearn all the practices of the past and learn new ones. And it takes a totally different mindset to do that. And the only ones who are going to pull that off are the corporate executives, the leadership, that sets the pathway, sets the mission, and not only talks the talk, but shows each and every individual in the company, how they're contributing to it. And those people want to be part of the mission.

Jan Griffiths: 11:42

Who have you seen John, that's doing it really well?

John McElroy: 11:45

I don't know yet. To be honest, I think there's things that I really respect right now, but who knows if it's really going to work. But if I have to pick three, I will pick Jim Farley at Ford. I would pick Koji Sato, the CEO of Toyota. And I would pick Luca De Meo, the CEO of Renault, they are transforming their companies. Now, whether it works or not, that's yet to be seen. But they are taking their companies in very different directions, compared to all the other legacy, automakers. Of course, Elon Musk is out there. But I'm talking about legacy automakers now. The startups, they've set their own mission, they're starting from scratch, the real challenge is taking 100-year-old companies and transforming them.

Jan Griffiths: 12:31

Yeah, because the model of culture and success, the model of success that all these young leaders are emulating was one of command and control the traditional way that we operated in the auto industry, and that isn't going to cut it.

Jason Stein: 12:43

I totally agree with John, obviously, I think if you go back over the years, and look at the number of people who destroy, who destroyed culture, within companies, because of their insistence on running things their way or on more ego driven desires, I can think of some individuals who might have spent some time in a courtroom in the last five to 10 years who did run big companies. You can build culture as fast as you can destroy it. And I think that the good ones we've seen through the years embrace change, push their teams to a higher level, have respect for every individual. And I'll even go a little further than some of the CEOs, you know, who John just referenced. I'll go to the to the JM family type of operations, who have a very definable culture, and have obviously been close partners with Toyota for a very long time. Jim Moran set the tone. And, that kind of leadership through the years, it's just been exemplary. And it's something that when you talk to the individuals there, and they set their goals, and they set their vision, and they talk about their associates. It's real. And then on the other side of it, dealerships who have been extremely progressive and who have showed exemplary forms of the way that they treat their employees, the Bergstrom family, the Flow family, Mike Maroney. These are folks who you say, well, what would they do in a certain situation to build culture. And so, they're all part of that automotive ecosystem that makes the industry so great. And John just mentioned, Koji Sato had the chance to sit down with him. And his first appearance in front of a North American audience first appearance since he's been named to the role of a global leader. And John's right. I mean, you can feel a difference in Mr. Sato, who's in his early 50s. He has an engineering mindset, but he also understands teamwork and the value of all of his Toyota associates around the world and how his leadership is going to set the path, but he calls himself a team captain. Those are the types of things that when you see a leader exemplify all of those attributes, really, I think polls a company together.

Jan Griffiths: 15:00

There are examples out there of companies recognizing it and making changes. But there's a tremendous lot of companies out there that just don't get it. And they don't understand the rate of transformation that's required of culture to go along with the product. Yes, we're all focused on the product, but the culture has got to go along with it. And it's this idea of speed of changing the culture goods, my experience in the tier one supply base. What will happen is you'll be in a C suite meeting, and anything that's related to culture and culture change will be considered soft. And it's the first thing that will go. Anything to do with training or leadership development. It'll be the first thing that and then marketing. That's it. That's what happens. Are we making the numbers this month? Are we making the numbers this quarter? Yes, or no? What are we going to cut very soon of this short-term myopic view, not so much of the onward and upward? And what do we need to do as leaders to truly transform this company? And yes, it is going to cost some money. And if we, if we don't do that, if we don't get our heads out of the weeds, I look onward and upward, we're not going to have a future. So, there's still a lot of that myopic focus on the numbers that I see.

John McElroy: 16:21

Well, you just reminded me of that old adage, tell me how you're going to measure me and I'll show you how I'm going to perform. And all these executives have been tasked with their board of directors to deliver ever-growing profits, quarter over quarter, and drive up the stock price. And they'll do whatever they can to do that because that's their job. That's what the board of directors has defined them to do that define their job. And so, it starts right there. I mean, you want to talk about leadership of a company, any CEO that wants to keep his or her job is going to do what the Board of Directors wants them to do. It really starts a whole layer above them.

Jan Griffiths: 17:01

You're absolutely right.

Jason Stein: 17:02

I agree. I mean, it's like anything, it all starts at the top. It's what leadership dictates, which transcends and trickles down to everyone else. And to John's point motivates behavior. Go back to the Toyota example, when they decided, they were going to move from California to Texas. Akio Toyoda had 100-year vision. I don't know of many companies who lay out roadmaps that are that long, and that detail. But what happened, the culture of Toyota followed, and they had a take rate that was higher than they ever could have anticipated, in moving from California to Texas, from the beach side near, you know, Orange County, to the middle of ranch land. But you know what, they all went because they all believed in it. And because it started with John's point board of directors, or Akio on down the CEO, illustrating that we're in it for the long haul. And here's the thing, we all care. And when I was in Plano, that was the overriding theme that I heard from everyone, from all the Toyota team members who showed up, they said, you know what, the company just cares about us. And I think if it starts there, then it transcends Jack Hollis, who's now running North America. And his note to me on the Sirius XM show was, we want to serve people, I want to serve people. How can I serve people today? How can I serve my teammates today? So, it's not about what's the stock price is today? Or what's the monthly sales pay. So those things are important. But it starts, Jack explained, it starts with serving others. And I think if more companies adopted that kind of culture, it'd be a very different industry.

Jan Griffiths: 18:43

Doug Conant, who's the former CEO of Campbell's Soup, who's an amazing leader, truly amazing. He said, when he turned around Campbell's Soup, it was in the toilet, it was a mess. And he said, you have to be tough on standards, and tender hearted with people. And getting that balance, right? Is the trick. It's the trick because yes, you've got a business to run. Yes, you have got to deliver numbers, but it's the how, how you do it.

John McElroy: 19:12

What a leader has to be able to do to get their people on board is paint a vision that they want to be part of. And it's usually not built around profits and market share and stock price. It's built around values that people treasure and that they believe in and want to help move forward. And then the trick for any leadership in a corporation, you know, 1000s or in the case of typical car company, hundreds of 1000s of employees is how do you create a system where employees see the contribution that they're making? See that it's making a difference. See that the company recognizes what they're doing and compensates them accordingly. And compensation doesn't always have to be money as you know, it can be other things too. But people want to know that they're part of a bigger thing that's good for them and their world. But they need that feedback, not on quarterly employee reviews, or once or twice a year employee reviews, they need to see it on an ongoing basis.

Jan Griffiths: 20:26

And they need to know that their manager has their back, just like you said, Jason, it's about servant leadership. It's about what can I do for you to support you as my employee, which is vastly different from the command-and-control model I grew up in in this industry.

Jason Stein: 20:42

I don't think you had a lot of you mentioned earlier Jan, sort of those soft discussions around the tier one supplier table. It was what's the price of the product? How fast can we get the product out? Am I being squeezed by my partner? Reduce efficiency, reduce efficiency? There was an arrow certainly where you know, that was that was the mode, but I think, particularly post COVID, and all of the changes that have occurred within the workforce and issues related to labor shortages, companies are taking a real different look at how they deal with their employees and teammates.

Jan Griffiths: 21:16

I think so. And let's talk about supply chain for a minute. And the WRI just came out the Plante Moran study, our friend, Dave Andrea. And I remember John, many years ago, getting ready for an OESA event. And you and I were in the office. I remember it like it was yesterday at OESA. Get ready for a panel. And you said to me, and I was in my supply chain role at the time you said, you know that the hanky study of things change of supplier relationships changed? And I think I'm sure I answered honestly. Which would be No, they haven't changed that much. And are they changing now? Well, if you look at the study in the WRI is in its 23rd year, so there's a lot of data. GM is looking better. Ford has dipped. And I know John, you mentioned where Farley is taking the company. Yeah, okay, he's going in the right direction. But there's a lot of work to be done to get there. And then, Stellantis fell off the friggin chart last year, because of those new terms and conditions that got everybody all riled up, including me. And now they're starting to climb up and I'm starting to see some great things happening at Stellantis to give me a lot of hope, quite frankly, for the future. But this idea of supplier relationships. We've been talking about that for decades. And I want to take this back to a comment that you made John about you get what you measure. If we continue to measure purchasing and supply chain executives by price. And they are, you can tell me that there's some other stuff that they're being measured by. And yeah, it's all just lip service. It's all nice nicey nicey. The bottom line is most purchasing and supply chain executives today are measured by bottom line cost results. And that will drive a certain type of behavior. So, whether we say yes, we truly recognize the impact of relationships, and those relationships can deliver to the bottom line. Or we don't. But no more games, let's do this. Let's embrace this idea of partnership with all stakeholders, employees, customers, suppliers, all of it. And let's do this together to be successful. And that's what I love about WRI is it gives us that the 23 years of data to help us and it measures in the right categories: trust, communication, assistance programs, hindrance and friction, mutual profit opportunity, that's really take this and drive this home. Sorry, a bit passionate about this subject. Could you tell?

John McElroy: 24:03

It comes through loud and clear there, Jan. At the top, you've got the CEOs of the car companies, the CEOs of the suppliers, they all have great relationships. And you know, the CEOs will talk about their supplier partners and how important they are. But it all breaks down at the buyer level and the buyer level is when people from the car companies start to sit down and negotiate with the buyers or the sellers, I guess I should say, at the supplier companies. And that has not changed. And I've said this for 23 years when John Hanke first showed his survey, that nothing's going to change until you change how you reward and compensate your buyers. And you can have all this nicey nicey talk as you put it at the top and that continues. But it breaks down at the buyer level. And that for the most part has not changed.

Jan Griffiths: 24:50

Yeah, we got work to do, right, Jason?

Jason Stein: 24:53

Yeah, and I've hosted the OESA, MEMA podcast for a year and a half now. So, on a weekly basis, I'm in touch with suppliers who are at the other end of the spectrum or talking to consultants who are talking to suppliers. I'll tell you the picture is hasn't changed at all, certainly in the last 18 months, but you know, more so to John's point in the last 20 years that I've been close to the industry, and what's funny is that this is a pivotal point now. I mean, you've got to make your claim stake your claim on propulsion systems more than anything else, if you don't have great supplier relations, and if this whole thing doesn't go well with the consumer, and if internal combustion engines hang on a little longer, and if EVs don't have the traction that's been predicted, you're gonna have some really strained relations, because you're gonna have investments that had been made over the course of the last three to five years, and looking forward the next three to five years that might not pay off. If those two groups don't have great terms and conditions and don't have great culture between the two of them don't understand each other in the industry changes that are occurring, the word bloodbath might come to mind. And we're already seeing I think some of the headlines just in the last couple of weeks. I've talked about default rates and supplier financial issues, something that was talked about on the OESA program, just even six months ago, it was predicted that it was going to happen. So, at a pivotal point in the industry, when the industry needs partnerships more than ever, when the infighting needs to stop. To your point, Jan, on culture, there needs to be a new culture.

Jan Griffiths: 26:29

Absolutely. Now, we see a different culture coming out of the EV startups. And when we talked about supplier relationships, the discussion we just had was traditional tier one, tier two suppliers. You got these tech startups coming into the picture. I think of a buyer in traditional tier one or tier two reaching out to a tech company, a startup company with a 35-page document terms and conditions. And this is how I onboard you. And you know, these young tech companies go wow, you guys are crazy. I'm not signing that and running away screaming. And that's why I loved interviewing Jeremy McCool. He's the CEO of HEVO, the wireless charging company. And I asked him very specifically, I said, what did it feel like for you coming into Detroit and dealing with the OEMs? And he said one word, antiquated. And he said, and I said, well, okay, but give me give me some what advice would you give then to the OEMs? And he said, the OEMs need to develop more nurturing and more coaching, kind of relationship with these tech startups? I mean, you go in there and try to deal with them, like a normal tier one or tier two. Forget it, hang it up now. So, it's gonna require a different approach. I mean, John, you talk a lot about product development. What have you seen in the tech startup space?

John McElroy: 27:53

Well, to be honest, I mean, I've talked to a lot of suppliers that deal with Tesla, it's just as brutal as dealing with any of the legacy automakers. I think part of the difference, though, is Tesla approaches everything that it does on a total system space. Whereas the legacy automakers tend to be much more organized into silos. And so, you've got different buyer groups at the legacies that are negotiating for their silo. Well, that may not be good for the overall product. I'll give you one example. This goes back to years ago, automakers started to go to what they call tailored blanks. These are steel blanks, where you could laser weld different grades of steel together, and you'd put high strength steel at places like seat belts, anchor points, you need really strong steel there, but you didn't need stronger steel in areas around it. So, you could laser weld these things. Stamp it up, you have one stamping, one tool, one stamping one piece to manage. Well, Ford had a buying team that was dedicated to purchasing the cheapest steel blanks that they could get. And guess what tailored blanks were more expensive. But in the overall picture, it was cheaper, lighter, less material handling easier at the assembly point. But they were tasked with buying the most cost-effective steel blanks that they could possibly get. And so they did a great job with what they were tasked to do. But it wasn't good for the overall program. Tesla is much better, far, far ahead of all the legacies and approaching everything it does, whether it's the product itself or equipment, they're buying for the factory floor, whatever it is you want to talk about. They're approaching it from a total system standpoint. And so even though, based on the feedback I've gotten from suppliers, they're really tough to deal with, just as tough as the legacies. Tesla is getting more out of its procurement operations than the legacies are because of this total systems approach.

Jan Griffiths: 29:56

Yeah, that's really interesting. Jason, what have you seen with EV startups? EV Companies, culture wise.

Jason Stein: 30:01

Culture wise, the word is cutthroat. I think whether you talk to Rivian’s, or the Tesla's, I've known, many people who've worked at both. There is a mentality here. And we've sought, we've saw this all the way back to the Detroit. Automakers wanting to be more Californian at one stage, if you remember back to the days of Mark Fields, and being a CEO, and going and setting up shop in Silicon Valley and trying to be more like that, and the Silicon Valley, folks’ kind of laughing off the Detroit people. I think that mentality still exists among those two camps as much as the Detroit car companies tried to hire people from Google. Yesterday's headlines, it is definitely two different cultures. And it remains that way. And RJ Scaringe came in and talked to the automotive news team when they were still looking at buying a plant in Normal, Illinois. And it was like, we're going to do things differently. We're going to manufacture differently, we're going to build products that people really want, we're going to approach the market differently. And RJ had a very startup mentality. I think what's been realized in the last few years is how hard it is to produce cars on a regular basis. And Elon Musk is has definitely had his own struggles in the past and appears to have worked out many of those kinks. But the other startups with the mentality of well, we're not going to be like Detroit, because Detroit got it all wrong, I think are realizing how difficult it is to truly be like them. And scale is a beautiful thing, as is history and context in a market.

Jan Griffiths: 31:39

Wooh, there it is! Yes, I talked to Dr. Andy Palmer, former CEO of Aston Martin, he was the COO of Nissan, he's now into the mobility space. And we had this discussion about traditional auto culture versus California EV culture. And the discussion was basically the bottom line was, there's no right or wrong, there's no one is right, or one is necessarily better than the other. As an auto supplier as an auto OEM, you have to do what's right for you and develop your own culture. And it will have some of the elements of traditional auto because it's not all bad, right ability to scale understanding, car production and volume understanding ramp up how that works, program management, all those things are all good. But then the EV culture is more of an authentic leadership type model, for the most part may be more collaborative. So, there are elements of both you have to adopt to what's right for you for your culture. And companies that get it right will survive and succeed and handle the transformation and companies that don't.

John McElroy: 32:47

Well, I think it's very hard to take an existing culture and change. Damn near impossible. All my career. I have heard people say how stupid the automakers are in Detroit. General Motors, Ford, and Chrysler. They don't know anything. They're just so dumb. They're a bunch of Midwest Hicks that don't know what's going on. I've been hearing this for half a century, Jan. They're still round, you know, so they must know something. But there's no question. And they all recognize that too that they've got to change. But to take 120 years, because that's they've been around at least Ford's case, 120 years, and processes built up over that time because mistakes were made. And it was like, oh, we can't have that happen. Again, we have to put a process in place to make sure that doesn't happen. And this changed over here. And that ended up badly. So, we have to figure out a strategy so that we don't do that again. Now imagine building that up for 120 years. It's so hard to change that. And that's why when I mentioned the three executives that I thought are leading the industry right now, Jim Farley at Ford, Koji Sato at Toyota, Luca De Meo at Renault. They have carved out their EV operations and set them out as startups within the company. And in the case of Ford, I don't know enough about Toyota or Renault just yet. Ford has staffed them largely with Silicon Valley people. There's only one legacy executive that's part of that team. And all the rest of them starting with Doug Fields, who worked at Tesla and Apple, by the way, are leading that effort. So, they're going to create an entirely new culture. That is the new way of doing things. Move fast, break things fast, iterate quickly, keep moving, because the old culture does not support that. And there's going to be some people that you want to keep in that old culture because the ice product is not going away anytime soon. It will go away, but it's not going away tomorrow. But you need this new culture and especially with young people who have very different viewpoints on the workplace. And if you want to bring them in, in a tight labor market, as Jason mentioned earlier, where they've got all kinds of choices in front of them, they're only going to go with the place that they truly believe in. And I think that's why these three execs that I just named have started a startup within the legacy because they recognize they're not going to be able to change the old culture fast enough if they can change it at all.

Jan Griffiths: 35:26

Yeah, I agree totally. Changing existing culture that's been entrenched in the way that we do business for decades. You have got to pull that entire operation and separate it off. You have to end with Ford separating EV from traditional blue oval, I see were, where they're going. But I'm also seeing that this, particularly on the purchasing side, right, it's not completely separate. So, they're gonna have to go all the way.

John McElroy: 35:59

One more thing I remember, Jan, they have not had a head of purchasing. It's the CFO, the Chief Financial Officer has been, you know, have purchasing reporting to him. What does the CFO know, you know, get a budget and a hammer and make everything fit. I'm being a little bit glib here, but they're on the search for a new head of purchasing. And I think it ties back to the fact that there has been no leader in that position, who really knows his or her stuff.

Jason Stein: 36:28

And that it affords a slew of last a couple of very talented individuals who were tightly connected to the purchasing side, have you Raj and I a year and how tight Tang, I used to sit across the table from him when we would do supplier surveys and we would present it and he was always very attentive, listened, listened intently. And that kind of experience go back to my earlier point, that kind of history experience perspective, relationships, matters. And you can't just bring outsiders in. We've seen this play before, with Detroit car companies who want to inject a whole new perspective into the traditional operation by adding in folks who have no automotive experience. It doesn't end well. We've seen that.

Jan Griffiths: 37:10

Well, I have to tell you about a bright spot that shocked the heck out of me. A few weeks ago, somebody came to me, and they said you need to interview my boss right on my previous boss. You get people to come that they wanted a guest on the show, right? I'm always very, very skeptical, because my whole mission is you've got to be an authentic leader, you got to really get it and people have to want to work for you. Right? So, she came to me and she told me this and I said, Okay, well, you know, tell me something about it. And she said, Yeah, and he's in the C-suite at Volkswagen. And I'm like, Ah, right. But here's my bias coming in. I'm biased. I'm not gonna lie, because of my experience in the supply base, the German OEMs, particularly Volkswagen, very aggressive. I've been called into Wolfsburg and yelled at in German, and I don't even speak German, because they thought that that was the right thing that the way to get me to do something. Yeah, right. Let me tell you how well that worked. So, to me, Volkswagen is all command and control. I mean, when you look in a dictionary command or control, a VW logo comes up. So, when she said to me, "No, he works. And he's the Chief Sales and Marketing Officer for Volkswagen" Oh, my God, there's not a chance, not a chance that this guy is an authentic leader, and survived and is at that level in Volkswagen, North America. And I was dead wrong. He is one of the finest authentic leaders, a man that shows vulnerability. You can hear it on my podcast. You can hear him the way he talks. The way that he's talking about people and developing people and developing the pipeline internally at Volkswagen completely blew my mind. Now, how do we get more Andrew Savvas types into this industry? How do we do it? Any thoughts? How do we encourage and applaud these leaders? I mean, kudos to Volkswagen, first of all, let's just get that out there right now. How do we you know, amplify their voices. Obviously, my podcast is one way to do that. But we need to do we need to do more of it. How do we do that? John, how do we celebrate these guys and girls that really get it?

John McElroy: 39:32

Well, it's not easy, and it takes determined effort to do it. My understanding is Jim Farley had to go to California eight times to convince Doug Field to come to Ford and run their EV operations got turned down seven times before he finally said yeah, I'll do it. And, you know, you've got to convince these talented people Who are going to be headhunted from all different kinds of corporations from all different kinds of industries. And so, you've got to convince them that they're going to be able to make a difference, that you need them, you want them, and you are going to give them the power to make a change. And even at that, it's not going to be easy, per my example, with Jim Farley and Doug Field. And my understanding is, if you go back earlier, it took Bill Ford almost as much effort to try to get Alan Mulally to come to Ford to be CEO. As CEO here, we're going to hand you this entire car company. And he kept saying no to it, until they finally said, you know, agreeing to their demands, because I'm sure they said, I'm not going to do it, unless you do this. I'm not going to do it unless you do that. And they finally relented and gave them those concessions but convinced them that you're going to be in charge, and you're going to make a difference. And that's the only way I think that you can get them.

Jan Griffiths: 40:59

Jason, hope you seen who's your Andrew Savvas.

Jason Stein: 41:02

Well, I just want to talk about Andrew for a moment because I met him probably maybe a year and a half, two years ago. And I thought to myself after having lived in Germany for more than four years and having dealt with Volkswagen during that time, I thought this is the anti-Wolfsburg guy. How did he get through here?

Jan Griffiths: 41:19

Exactly.

Jason Stein: 41:20

I mean, he was irreverent. He was funny. He is authentic, extremely professional, very efficient. One meeting I had with him a little more than a year ago was scheduled for an hour we were done everything we needed to talk about in 10 minutes. And we hung up the line. I mean, it was very refreshing in a way just given the fact that he just has a way about him that is different than everyone else’s. And I'll tell you, the industry has changed so much just in the last five to 10 years. You know if we would have done a Mount Rushmore of leaders 10 years ago. You know, you would have had Carlos Ghosn, Martin Winterkorn, Ferdinand Piëch, and probably, Alan Mulally and Sergio Marchionne. It's too many heads for the mountain. But you get my point. We'll look at how, look at how the industry has changed right now. And first of all, all of those folks are gone for one reason or another. Most of those reasons, not very good. But who is who's the on your Mount Rushmore now? I mean, who are the leaders who will take this industry into the future. And I just at LeMans, a couple of weeks ago, ran into Carlos Tavares. And I knew Carlos when he was running Nissan North America, back around 2010 or so. And you want to talk about hard charging, efficient, but also personable and relatable. I mean, he's got wineries that are in Portugal, he's running hotels in Portugal. Now this is this will be the next chapter after he leaves Stellantis but incredibly thoughtful. A listener wants to know why things work or don't work, and is willing to consider ways of doing things differently, but that Mount Rushmore needs a few more heads up on the mountain, in my opinion.

Jan Griffiths: 43:01

I would agree. So, let's see, what advice would you have? I mean, John McElroy all of your years of experience, dissecting this industry, coming at it from the perspective of culture in the auto industry, John, what advice would you have to lead us CEOs of tier ones; OEMs out there, as they embark upon this journey of cultural transformation? What would you say to them?

John McElroy: 43:28

I would say, get ready. This industry is going to see more change in the next seven years, taking us to the end of this decade, than we've seen in the last 100 years. And I've said this many times, I think you have to go back to around 1905 To find a similar situation in the auto industry that we face right now. Tremendous change is going on. And back then it was technological today, it's technological. Back then, it was cultural today, it's cultural. And the difference today, of course, is that it's on a global basis. We haven't even talked about the Chinese, they're gonna hit the American market, and they're gonna take over the lower end of the market, just like the Japanese did 40 years ago. And I don't think that most leaders, certainly not in labor, either are aware of this or believe it. I think we need to start preparing people now. That work, we're going to face massive upheaval. And you know, I'm somebody who lives in Southeast Michigan. You guys do too, right? I want my family to do well, I want my friends to do well, I want my community to do well. If this region loses the auto industry, and there's a chance it could, we're screwed. I mean, there's no other two ways to put it. And so, we've got to be hyper aware. I'll give you more concrete examples of what I'm talking about around 2020 years. So, BlackBerry came out with this really cool phone and it had like a little typewriter kind of key bordered on the front of it. And you could send and receive email and I was blown away. Look, I can send an email on my phone, I could do this very rudimentary internet searches, nothing graphic only text, but I was blown away by that phone. I thought it was so cool. And the war was on then, between Nokia and Blackberry, who was going to dominate the phone business. And then I think it was 2008 or so Apple came out with the iPhone, and Kablammo destroyed the phone industry for everybody else. BlackBerry and Nokia are no longer in the phone business. And if you go back, before the Great Recession, shopping malls were thriving places where you would go and buy things, you know, and they were jam packed at Christmas time, for example. Go by most shopping malls today. I mean, they're sorry, looking place, unless they're very upscale, some of the upscale ones are still doing pretty good. But the middle of the road shopping malls are either dead or dying. So, I think what we're going to see happen with cars is going to be what happened with Blackberry, I think the thing that's going to happen to dealerships is what happened with shopping malls, I think we're in for that amount of change. And I believe we've got a decade before it, it's really over. So the problem for the industry is as you start to lose volume on the ICE side, it's going to go away, and everybody sort of recognizes that. But the real problems hurt. When you hit 20% that you've lost, you lose 20% of your volume, whether you're a manufacturer or a dealer, you're no longer making money, that the trouble hits way sooner than the day that ice goes away. It feels like Paul Revere, you know, the transition is coming, that transition is coming revolution is about us. And I don't see that level of alarm in enough places. There are people in this industry who know what's coming, but not enough of them.

John McElroy: 43:36

Yes. And that alarm and that clock is ticking from a cultural perspective.

John McElroy: 47:07

Completely, totally. And you know, it goes back to the beginning of when we were talking culture is going to lead to change, leadership is going to lead the culture change. And so, it's going to come down to the best leaders, and those are going to be the ones who win.

Jan Griffiths: 47:23

Jason, what advice would you have to auto leaders out there facing the transformation?

Jason Stein: 47:30

Listen to John McElroy. That would be my advice to them. No, John hit the nail on the head. I mean, we always talked about, oh, wow, this is the period of change. This is the period of change. I agree. I think it's truly now and whether it's direct selling at the retail level, which dealers have fought that back successfully with state lobbyists and franchise laws. And trying to push back on the agency model, which you know, that word has crept into everyone's vocabulary over the course of the last year or so. So, there's, there's definitely a transition there. And the amount of investment that's required by dealers, in terms of EV charging or infrastructure or what's been asked by OEMs, in terms of the amount of investment is going to thin that herd, you're gonna see a lot of you're seeing it already. The mom-and-pop dealerships are now selling to the Lithia, Asbury, and Penske's of the world, because it's all about scale. So, check that will change I think the supply base, absolutely, we already hit on that, that you have to kind of declare your major on which side you're gonna go into. It's interesting how American axle has become AAM, because they're, you know, getting away from that very traditional axle business over the course of the last five years or so. So, deftly pivoting to the new propulsion systems that will exist and traditional automakers would we call them earlier legacy automakers are being challenged by the startups who have a different way and a different mindset and have a different cultural bent. So, at all levels of the industry, putting it into those, just those three silos, obviously we're going to, we're going to need a new approach to culture. And I agree with John, this is the period of change. And if you thought that it was a fast pace before you have probably haven't seen anything yet,

Jan Griffiths: 49:20

The time is now. One of the traits of authentic leadership is vulnerability and showing your human side. So, let's show some of the human side, shall we gentleman? John McElroy, what's your favorite band?

John McElroy: 49:36

Oh, I don't have any one favorite band. You know, I like all different kinds of music. If you put me on the spot of, what have I listened to the a lot of over my life. It would range from Frank Zappa to Jimi Hendrix to return to forever with Chick Corea. I mean it to the Detroit Symphony Orchestra, which I love, too. So, my musical tastes are very eclectic.

Jan Griffiths: 50:04

Oh, I would never have nailed you as Zappa guy. Wouldn't have picked you as a Zappa guy. Jason Stein, favorite band.

Jason Stein: 50:10

Well, up until the Ticketmaster scandal, it would have been Taylor Swift. So, I’ll knock her off the list. I'm a 90s Brit, Brit music guy, just saw Noel Gallagher one half of Oasis because those brothers can't get their act together and get back together again. Noel was a great songwriter when he was about 18. And those songs are still played now. Some 30 plus years later, so I like I like kind of the Brit rock, Brit pop stuff and including new bands like the 1975 and other, you know, kind of thoughtful singers. I go all over the map like John and actually one of my new favorite country bands is Old Dominion, which, you know, is not new. But you know, somewhat new to me in the last few years, they opened Kenny Chesney and a lot of shows around the country. And, you know, I just like good music, like John.

Jan Griffiths: 51:04

Yeah, I love it. All right, John. What do you like to binge watch? Maybe during COVID Or even now, you know, Netflix, Amazon? Is there a show that stands out?

John McElroy: 51:15

There's various shows. I mean, I don't know if you guys saw this one Clarkson's farm. Jeremy Clarkson, who I've always thought was kind of an idiot. But this Clark, he bought a farm and it's all about him learning to be a farmer, my wife and I loved that show. And then there was this French one that we watched for a while it which the English version was called, Call my agent. In France, it was referred to as "Dix Pour Cent", which means 10%, which is an agent's fees. And it was about this talent agency that represented movie stars. And we just got sucked into that one, too. And then just more recently, we went binging on Band of Brothers to Steven Spielberg, Tom Hanks, what about the 101st airborne. So, I don't know, I just throw those out. Because I couldn't remember those off the top of my head.

Jan Griffiths: 52:02

Yeah, no, those are all good ones. Jason, would you like to binge watch?

Jason Stein: 52:05

Well, I'm always pursuing another guest for my show. So, Drive To Survive has obviously been a big one, the Formula One show on Netflix, which is transformed Formula One across America. Koji Sato and I were talking about it the other day, he said, why is Formula One so popular in America? And he actually asked the crowd that we were talking to is about 500 people in the room. And they only had one word answer. And it was Netflix, and it was driven to survive. And it's the reason why there's an investment in Las Vegas later on this year with prices that are through the roof. It's the reason why Miami is so popular. And I took my 18-year-old son to the race at Austin, Texas last fall. And these 20 Young, 20 Something girls were in front of us at this pre-race concert. And I asked one of them the question, why are you here? Who do you support in Formula One, they said, oh, well, we love everybody because we love to drive to survive. That's a big departure from 1982. When I was standing in the streets of Detroit watching Formula One cars go around. And there were very few Americans there. There were a lot of Europeans. And there were a lot of South Americans.

Jan Griffiths: 53:07

One of the things that that I've been watching recently, which I'm kinda late to the party, to be honest, is Ted Lasso, right? Because everybody's been talking about Ted lasso for a long time. And it took me a while to get into it because it was football. And I was like, Yeah, not really into football. But I didn't realize there was a British American connection. And I didn't realize that there was so much great coaching and leadership in it. And I think we need more Ted lassos Ted lasso types in the auto industry, few more of those. And with that, I would just like to say thank you both very, very much. John McElroy, thank you so much for celebrating my 100th episode. And joining me at the mic today. Thank you, John. Thanks, John. Jason, again, always a pleasure to talk to you on the mic. And thank you. Thank you from the bottom of my heart for being here for my very special 100th episode.

Jason Stein: 53:58

Congratulations. You'll have to have us back for number 200, or number 3,456 like John.

Jan Griffiths: 54:05

Yeah, right. Yeah. Okay. Thank you, gentlemen.

Jan Griffiths: 54:14

Thank you for listening to the automotive leaders podcast. Click the Listen link in the show notes to subscribe for free on your platform of choice. And don't forget to download the 21 traits of authentic leadership PDF by clicking on the link below. And remember, stay true to yourself, be you and lead with Gravitas, the hallmark of authentic leadership.