Not your father's Oldsmobile anymore

GM, the world's largest automaker, wants to make itself into a hip Web business. Can the rusting giant pull it off?

By Diane Seo

Jun 6, 2000 | GM is getting a face-lift.

Sick of being cast as the grumpy corporate grandpa in a beat-up Cadillac, the world's largest automaker is undergoing a major makeover. General Motors wants to be a hip e-enterprise.

That's right. Amid sagging demand for its Buicks, Pontiacs, Oldsmobiles and Chevys, the Detroit titan -- once the epitome of gruff old-economy America -- has officially admitted its skin is wrinkling. To rev up sales and lure fresh-faced talent in this extra-snug labor market, GM is injecting itself with a heavy dose of Yahoo-flavored Web Botox. As with any good Web company, it has already started behaving like the quirky start-ups that define the dot-com community.

In a move that would have once been inconceivable, GM now offers back rubs, flextime, Silicon Valley digs and funky offices -- the whole Net shebang. And GM promises this is just the beginning. The makeover, which has begun at e-GM, the company's Internet division, will eventually reach all 400,000 of GM's blue-collar and navy-suited employees.

Mark Hogan, head of e-GM, says the carmaker has given itself three years to change, a task he likens to breaking down Pentagon bureaucracy. (Remember, this is the place Michael Moore vilified as the corporate antichrist in his documentary "Roger and Me.") "I would be less than straightforward if I said everyone likes the idea," Hogan admits. "But the Internet isn't going away. The new order has to emerge."

Don't expect the auto giant's buttoned-down hierarchy to crumble overnight -- according to one analyst, GM is still an "entrenched bureaucracy." But at e-GM, which was created in August to handle everything from the growing e-commerce operations to the OnStar dashboard communications service, signs are evident that Dad's Buick LeSabre has unfastened at least one button on its starched upholstery.

Consider the evidence: Some 200 young employees at e-GM dine on gourmet meals, courtesy of papa GM. They traipse into work in boot-cut jeans, clunky black shoes, snakeskin pants, whatever. Time punching has gone by the wayside; employees are encouraged to work from wherever is convenient -- at the office, at home, at the local cafe. Flexible schedules are OK. Employees no longer have to endure searches of their backpacks or laptop carriers. This standard security policy "isn't consistent with new employment values," says Sheryl Owens, e-GM's human resources director.

E-GM's Detroit headquarters boasts a comfy "family room" with plush couches and a TV. Lactating mothers can come here to breast-feed without disapproving stares from higher-ups, Owens says. The company is toying with on-site day care so Mom and Dad can bring up baby while plugging away on their iMacs.

E-GM has a bright orange office floor -- a (slightly forced) attempt at architectural irreverence. The aforementioned massages may be a commonplace perk in the Web world, but they could someday lead to the unlikely sight of UAW workers receiving shiatsu on the assembly line.

Then there's the "concierge" service. "They're assistants that essentially serve as wives for hire," Owens says. "They'll do your laundry or wait at your home if a repair person is coming." Employees must pay for the service, but Hogan offers this as proof of GM's new employee-friendly M.O. "If you came to visit us," he says, "you'd have to pinch yourself that you weren't in the Bay Area."

Just in case you're not convinced, e-GM plans to open a San Francisco office to tap into Silicon Valley's technological talent. With Detroit's reputation as yesterday's city, GM believes it will better attract young candidates with a West Coast face. The company has actually benefited from recent struggles in the start-up sector. Hogan's quick to brag about his latest coup: six MIT MBAs.

It's an exciting time, Hogan insists. He describes the new-and-improved GM as "a company that will know no barriers -- a company that's fast, bold and a risk taker."

Sounds like a good ad campaign. GM's financial state, however, suggests a far grimmer tale.

Next Page: A look under the hood

• View blog reactions