Detroit Muscle

Chet Huber remembers back to the days when he was surrounded by more than 500 Post-it notes. They stretched across his office walls, exhorting and scolding him. "Disconnected 911 calls?" read one. "Screens in the car?" read another. Each note was simple. But taken together, they represented a fiendishly complex map of Huber's long-term strategic agenda. Huber is the driving force behind OnStar, the high-profile service from General Motors that connects automobile drivers to the outside world. More than 2 million people now drive around in OnStar-equipped vehicles, and roughly 5,000 OnStar-outfitted cars roll off the assembly line each day. The service is standard on 34 out of 54 GM models for 2002, and Huber has persuaded Acura, Audi, Isuzu, Lexus, and Subaru to offer OnStar instead of building their own systems. Huber himself is a serious player in the high-tech world. He sits on the board of General Magic, a leader in voice-recognition technology in which GM has made a $15 million investment. He meets with Bill Gates. He travels to China in search of new markets.

None of which means that Huber is prepared to take a victory lap. Far from it. "The tyranny of this business is that today's distractions will become tomorrow's killer app," he says. "Every time I think I have a handle on the edges of this company, something gets added and -- holy cow! -- I realize that it isn't three dimensional, it's four dimensional."

On top of all of the long-term complexity -- Which services will customers want next? How can GM make the system sophisticated and still keep it simple? -- there is short-term pressure for results. Truth be told, OnStar has been better at getting attention than at generating profits. The plan is to break even this year and to deliver real profits in 2003. But it's been a long road to reach break-even status, and many car guys still find it hard to understand pricing in the high-tech subscriber world. (OnStar users get their first year for free. Then they choose from three packages, with monthly fees ranging from $17 to $70, along with prepaid cellular minutes.)

There's likely to be more experimentation with pricing as GM looks for the revenue-generation sweet spot. But there's no denying the hardheaded realities. "OnStar has to be a real business," insists GM president and CEO Rick Wagoner, a big Huber booster. "We need to have change in the cash drawer at the end of the day."

It is a classic challenge for these no-nonsense times. How do you market new-wave services to mainstream customers? How do you grow fast and still deliver plenty of profits? In short, can you be bold and businesslike, out of the box and by the book, disciplined and creative? "We're really at one of those inflection points," Huber says. "We're at that place where we're going from being a startup to being a big company. I don't think we're on an unavoidable path to success. Nothing is risk free. But we are going to be a big business."

The Insider-Outsider

Huber, 47, has one major advantage as he tries to build a solid, reliable company in a sector rocked by economic turmoil and failed promises: He is an insider-outsider at GM -- a company lifer who never worked in the guts of the company. He is a respected executive with enough ties to the establishment to get things done, but not so many that it dulls the imagination.

Back in 1995, OnStar (then code-named Project Beacon) was little more than a pipe dream of GM's top brass. Huber wasn't part of that circle. An engineer with a Harvard MBA, he'd spent his entire career working at the company's electromotive division in Chicago, a world away from GM's power center in Detroit. But he was a rising star. In August 1994, he was chosen to be the first civilian from GM to attend the Industrial College of the Armed Forces. "OnStar would have felt overwhelming if I hadn't gone through the strainer of war college," Huber says. "Every day, we were learning how to navigate and lead in a world where everything around us was white water."

In May 1995, one month away from returning to his job, Huber got a call from Harry Pearce, GM's legendary (and now-retired) vice chairman. Pearce was in charge of everything nonautomotive at the vast company. He handled a hodgepodge of businesses that included Hughes Electronics, GM's interest in EDS, and Huber's electromotive division. "Harry had this idea to bring together three big pieces of GM -- technology, mobile communications, and the automobile -- and leverage them into something that would connect us with our consumers," Huber remembers. What that "something" was and how it would come to life inside GM's bureaucracy were decidedly open questions. "I'll be honest," says CEO Wagoner, who is on the senior executive team that served as OnStar's internal venture capitalist. "There wasn't any huge, brilliant strategy."