BUSINESS

HEAD OF THE

GM Canada’s new president is out to prove that she can sell

BRENDA DALGLISH September 19 1994
BUSINESS

HEAD OF THE

GM Canada’s new president is out to prove that she can sell

BRENDA DALGLISH September 19 1994

HEAD OF THE

BUSINESS

GM Canada’s new president is out to prove that she can sell

BRENDA DALGLISH

Maureen Kempston Darkes’s office overlooks a cattail-ringed marsh and wildlife reserve near the grounds of a massive industrial complex in Oshawa, on the shore of Lake Ontario. But if the environmentally correct view from the head office of the country’s largest corporation, General Motors of Canada Ltd., is surprising, its new president, Kempston Darkes, is an even more exceptional sight. A petite 46-year-old lawyer, she is the first woman to ever hold the top job at GM Canada. But Kempston Darkes’s recent appointment is most notable, not because she is a woman and a Canadian (in the past, GM has usually sent U.S. executives to run the Canadian subsidiary), but because she does not have the traditional auto-industry background in sales, finance or engineering. However, at GM’s U.S. headquarters, where a corporate restructuring climaxed in a boardroom revolt and the ouster of chairman Robert Stempel in 1992, senior management is clearly signalling a break with the past. And as it struggles to turn itself into a more efficient, customer-driven company, Kempston Darkes’s appointment seems to fit that spirit. “This,” she told Maclean’s, “is the new General Motors.”

Kempston Darkes has taken over at GM Canada just as the auto industry is turning a corner after five years of declining vehicle sales. In fact, automakers predict that 1994 will produce the first upturn in sales since 1988, and the timing appears favorable as Kempston Darkes takes over at the helm of Canada’s largest car company, which had sales of almost $22 billion in 1993 and profits of $328 million. That makes GM Canada significantly larger than Ford Motor Co. of Canada Ltd., which had a loss of $247 million on sales

of $16 billion in 1993, or Chrysler Canada Ltd., with a profit of $262 million on revenues of $14 billion. But because production decisions are largely determined by General Motors’ U.S. head office in Detroit, Kempston Darkes’s primary responsibility—despite her lack of previous experience—is for sales and marketing to Canadian customers. She is taking on those responsibilities, including the need to improve relations with the company’s dealers, at a time when they are more crucial than ever. Dennis DesRosiers, an auto analyst and head of DesRosiers Automotive Consultants Inc. of Toronto, says that although the Big Three North American automakers have made great advances in upgrading vehicle quality and improving the efficiency of their manufactur-

ing processes, their sales and marketing efforts are lagging. ‘That’s the issue now,” says DesRosiers. “Where GM ends up five years from now, depends on how well they do with sales and marketing.”

Until now, Kempston Darkes’s experience has been primarily in GM’s legal and public policy areas. But after almost 20 years with the company, she is well acquainted with the challenges down the road. She joined GM Canada’s legal staff in 1975 after a two-year stint at Osier Hoskin and Harcourt, a prominent Toronto law firm. Four years later, she became the company’s assistant counsel and then headed its tax department from 1980 to 1984. During that period she worked with Jack Smith, GM’s current president and chief executive officer, who was president of GM Canada from 1984 to 1986. Her next posting was a special assignment to the treasurer’s office in New York City from 1985 to 1987. In 1987, Kempston Darkes became general director of public affairs for GM Canada until she was promoted, in 1991, to vice-president of corporate affairs. In 1992, she added the titles of general counsel and corporate secre-

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otal industry 530,239 up 1.5%

RUCKS

ieneral Motors 109,292 up 15.7%

Dtal industry 326,147 up 12.5%

tary to her responsibilities and joined the board of directors.

That diverse experience gives Kempston Darkes a solid background for the crucial public policy side of the president’s job.

Indeed, she says there are a number of issues that GM Canada will be tackling during her tenure. “Things like payroll taxes,” said Kempston Darkes. “We see governments wanting to initiate more and more levels of payroll taxes. But, while to the public they may seem attractive because they seem to put the burden on large corporations, in fact, they are silent killers of jobs.” She says that her role will be to provide governments with enough information to make the right decisions. Governments are responsible for making the decisions, she notes, “but we have only ourselves to blame if we get the wrong decision because we don’t take the time to provide appropriate advice.”

Those who have encountered Kempston Darkes in industry circles say that she is a determined worker—and a tough negotiator. Neil De Koker, president of the Automotive Parts Manufacturers’ Association, who has worked with her on industry projects, says that despite her low-key, personable demeanor, she is relentless when she takes on an assignment. “She’s like a bulldog,” said De Koker. “Once she gets her jaws into something, she doesn’t let go.”

That trait appears to run in Kempston Darkes’s family. Her father was an Irish immigrant who settled in Toronto during the 1930s. But he died after a long illness when she was 12. Kempston Darkes says that she and her two older brothers were raised by a mother whose favorite saying was: “The only time you’re beat is when you’re not there.” And Kempston Darkes says that the experience of watching her mother raise and educate three children on little more than the wages from her job as a bank secretary taught her an unforgettable lesson about the need to be able to support herself. Her oldest brother, John

Kempston, a Toronto doctor, says that he and his brother, Stephen, 48, now a dentist, were diligent about their studies, but it was their sister who always worked the hardest. “If we were up studying until midnight,” he said, “Maureen would be grinding away until two.” It is that sort of discipline that has led some colleagues to view Kempston Darkes as the quintessential corporate executive, ambitious and single-minded in her determination to succeed. But her brother, who said that he had just that morning awakened to find that his sister had had his front lawn covered with plastic pink flamingos, penguins and balloons as a 50th birthday surprise, offers another picture. Despite the pressures of her job, he says that it is Kempston Darkes who most frequently visits and shops for their mother and organizes their family’s big Christmas celebration, right down to stuffing the turkey herself. Kempston Darkes and her husband, Larry Darkes, a lawyer with the City of North York, a Toronto suburb, have no children.

Kempston Darkes downplays her gender, saying that she has never focused on the fact that she is a woman. Still, the automotive sector remains a male-dominated industry, which, until recently, employed few women in any capacity. The number of women in senior management has risen to 10 per cent, from just 1.5 per cent 10 years ago. Now, 19 per cent of GM’s salaried workers and 10 per cent of their hourly paid workers are women. Kempston Darkes, who says that she is accustomed to being the only woman as well as the first woman to accomplish many things in the company, is almost blunt about the need for a change. “Diversity is a huge issue in business today,” she says. “It’s important that we have a culture within the organization that lets everyone contribute to the maximum of their abilities.” She says that the change would be good for business. “After all, women make 50 per cent of the new-car-buying decisions and influence 75 per cent of the rest.” She was an early advocate for enhancing women’s role within GM: in 1983, when it was considered a relatively radical move, Kempston Darkes helped found a women’s advisory council at GM Canada that provided a forum for the corporation’s female employees to discuss business issues.

Although the closest Kempston Darkes had come to car sales in the past was a brief stint as a receptionist at a Ford dealership when she was a university student, she is a quick learner. Already she is chanting the new mantra of Detroit: the customer is king. “Our success,”

she says, “will rise and fall on how well we meet and exceed customer expectations.”

Even as Kempston Darkes eases herself into her new role at GM Canada, some fundamental changes are already under way in the area where she must excel first, sales and marketing. All three North American manufacturers have begun experimenting with new sales techniques. Last year, GM launched a socalled value pricing campaign, in which car dealers set a realistic sticker price on their vehicles and then refuse to dicker, eliminating the make-mean-offer haggle that many people dislike. Most recently, GM introduced 24-hour

roadside service. “That’s been a major assist to us in attracting customers into our showrooms,” says Kempston Darkes. “It’s been tremendously successful in the marketplace.”

A key part of GM Canada’s effort to reposition itself in the automotive market is to improve the relationship with its network of 900 dealers across Canada. Last week, Kempston Darkes travelled to a château in France’s Loire Valley, where she met with a handful of top dealers who had won vacations there as part of sales promotions. In early October, she will attend the GM dealers annual convention in Arizona, and after that, she says, she plans to personally visit dealerships across Canada.

Both Kempston Darkes and the dealers are likely to learn a lot during those visits. Derek Knowles, the elected head of GM Canada’s dealers and president of Harland Pontiac Buick GMC in Montreal, says that the dealers want Kempston Darkes to address several issues, including his claim that General Motors has too many dealers. “In the good years,” Knowles says, “GM had the sales to justify the idea that there should be a dealer on every corner.” But GM’s market share has dropped to about 32 per cent from as much as 50 per cent in the 1960s. Furthermore, improved vehicle quality means that customers are keeping their vehicles twice as long as before. As a result, Knowles says that there are too many dealers making fewer and fewer sales. “We are over-dealered,” said Knowles. “In the past, that was one method the General used to keep the cost of cars down on the retail side. But it’s gotten out of hand now.” And instead of the dealers competing with each other to keep a healthy downward pressure on car prices, the competition has become so fierce that many are not making enough sales to cover costs. GM and its dealers negotiate over the number of dealers that are allowed to open.

Another point of tension between the corporation ánd the dealers is the shortage of popular vehicles. Knowles says that GM does not deliver new product to the dealers when it is needed. “GM can’t meet its production schedule,” declared Knowles. “They have a very major problem delivering new product to us when they say they will.” For instance, after more than 10 years, GM is replacing the Pontiac Sunbird (which with its closely related Chevrolet counterpart, the Cavalier, are the best-selling cars in Canada) with a new car, the Sunfire. But Knowles says that although the Sunbird is gone, he now cannot get enough Sunfires to meet consumer demand. “I doubt if I’ll see five Sunfires before the end of the year,” he said. “And that’s my best-selling car.” He says that the same problem besets most all of GM’s new products. “It’s particularly frustrating because the competition doesn’t seem to have this problem. They have lots of new products coming. I take my hat off to Ford and Chrysler. Why can’t our cars be built on time?”

Kempston Darkes acknowledges the problem. The new Monte Carlo and Lumina, midsize cars that are being manufactured only in Oshawa, are part of the problem. Those two cars, which went into production earlier this year, are among GM’s first experiments with a new type of design and new manufacturing processes that are supposed to dramatically simplify and streamline vehicle production. The new Monte Carlo and Lumina, for example, have several hundred fewer parts than their predecessor models, and they are supposed to be easier to assemble. But Kempston Darkes says that the radical change required a major plant retooling. “We planned a very slow production acceleration curve,” she says. ‘We are committed to not releasing any product from the plant until it meets our expectations of customer satisfaction.” She says that Oshawa has produced 60,000 Monte Carlos and Luminas, and that production rates are “about on track.”

For his part, Knowles acknowledges that the problem of product shortages is generally beyond Kempston Darkes’s control because quotas of new product are assigned in Detroit. “GM Canada can’t do a hell of a lot about improving the efficiency of the manufacturing process,” he says. “But where GM Canada can get its act together a little better is to fight for the available product harder.” Knowles says it was frustrating to be told by GM at the beginning of September that the Canadian dealers would get more cars through the fall than they received last year. ‘That’s great, except that they’re not what we need,” he said. “They’re giving us $20,000 cars, in place of $12,000 cars. My customers don’t want those.”

However, Knowles and Kempston Darkes are in agreement on the issue of how GM dealers should treat their customers. At the beginning of October, GM will introduce standards for dealing with customers. The guidelines, intended to provide GM customers with the kind of standardized service expected from McDonald’s hamburger restaurants, will cover everything from the way customers are greeted when they arrive in a showroom to the kind of disclosure that must be made when a vehicle is sold.

By upgrading and standardizing the service provided by its dealers, the largest such organization in the industry, GM is planning to gain a crucial competitive advantage. “I think as a whole our indushy has a very poor reputation for servicing customers, for honesty in our dealings with customers,” said Knowles. “I’ve felt for a long time that I was really glad I didn’t have to buy a car.” Although the design and manufacturing processes have been radically changed in recent years to accommodate the needs and wants of customers, many aspects of the sales process still treat the customer like an adversary. GM hopes to change that so the customer’s interests come first. He adds: “GM has not led the pack for a long time, and this is one area where we can get ahead of the game.” Says Kempston Darkes: “We’re looking at every way we can to make the purchasing and ownership experience more pleasant for the customer.” Kempston Darkes may not have much experience as a car salesman, but she certainly knows where to steer the company. □