THE STASH DECEMBER 1, 2009
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It looks like Fritz Henderson, who only took over as GM's CEO back in March, has been forced out by the company's board. From the Times:
General Motors said Tuesday that its chief executive, Fritz Henderson, was resigning and would be succeeded on an interim basis by the automaker’s new chairman, Edward E. Whitacre Jr. ...
Mr. Henderson became chief of G.M. after the previous chief executive, Rick Wagoner, was asked to resign in March by President Obama’s auto task force. But in a sign that the company’s board is dissatisfied with G.M.’s progress, Mr. Whitacre, the retired head of AT&T, will assume the top job on a temporary basis.
“We all agreed that some changes needed to be made going forward,” Mr. Whitacre said.
It's obviously a little early to draw conclusions about what happened. But my first impression is that this could be a signal of relative strength. When the Obama auto task force fired Wagoner, it seemed to want to replace him with an outsider capable of shaking up the company's staid culture. But the task force worried about putting the company through such a radical change during a period that was already so wrenching, and so it settled for Henderson. At least that's the impression you get from former auto czar Steve Rattner's account in Fortune last month. And from this excellent narrative of the GM bailout in the Times back in July. The Times piece actually had a great nugget highlighting the cultural problem Henderson posed:
In truth, the task force had no interest in running G.M. But the only available alternative to Mr. Wagoner was Mr. Henderson, a lifelong G.M. employee, and he did not initially impress some task force members, according to administration officials involved in the discussions.
When asked at an early meeting to discuss G.M.’s culture, he gave what some members of the task force described as a long, meandering answer, concluding: “I’ve been here 25 years. This is the only culture I know.” However, Mr. Henderson quickly added that he was determined to change it.
The panel considered making him an interim chief executive, but decided that G.M. employees, rattled by the financial crisis and the departure of their boss, could not handle more uncertainty.
Again, tough to say exactly what happened so soon after. But my guess is that, after some mildly encouraging third-quarter results, the board thought GM was on sound enough footing to go ahead and make a change they'd wanted to make for months now.
5 comments
Not really sure about the Henderson Sacking, but there is some merit to it. Large pieces of the GM Re-Organization fell apart, Saturn Sale, Opel Sale, Saab sale. Not much in the way of sales improvement, not much from GMAC. A lot of large decisions that Mr. Henderson had to have been involved in are not really getting any traction, and some are just plain failures. Not sure who they can get, and it's been difficult to recruit a CFO with the mess and pay restrictions. Maybe it's better with the position open. I really believe that GM was in a lot worse shape than people knew or believed last year. The Government may be able to succeed by just injecting a little honesty and consistency. With the Yen @ 85 it gives GM a little more breathing room, but with Hyundai on a tear and Ford beating their chest it won't be easy.
- CRS9TNR
December 1, 2009 at 8:25pm
What will show that Whitacre gets it is if the board chooses someone with either automotive or industrial experience that really understands the product, like Mulally. Ford's CEO is an engineer with a lot of relavent industrial experience, and GM would be blessed to find someone like that. The next CEO has to understand that product is king, something GM CEOs never understood for too long (Ron Zarella is a prime example). For a great commentary on this subject check out autoextremist.com
- tnmats
December 2, 2009 at 10:56am
CRS9TNR - some good points, but I was never convinced that there was any intention to sell Opel or Saturn. Saab was the only brand I ever thought there was an earnest effort to sell (other than Hummer), as it, like Volvo, has never become more than a special interest brand; they've never become the premium brands GM and Ford were clearly looking for. For Saturn, as tnmats has said a lot of times - sell what? The engineering and bodies are all common with everything else. If you bought it you'd get a factory with a few years left in the pipe unless you tore up GM internally. As for Opel, my suspicion that it was a sop to the German government seems to have been born out. The timing of the sale was a little too suspiciously *after* the German federal election. Plus (and its been a while so this may no longer apply) but Opel was the source of a lot of technology as well as their only rear-wheel drive platform, so the sale never made much sense to me. I understand that most mergers and divestitures end up reducing shareholder value (there are obviously stellar contrary examples) as integration and realizing efficiencies is hard, yet the market still manages to get excited about them, so it makes sense to talk them up. Lots of smoke and mirrors to calm the seas methinks.
- Nari224
December 2, 2009 at 2:16pm
Nari, Opel is and in the future will be a big engineering center for GM. How Henderson was considering dumping it was beyond me. The board apparently understood that and I'm convinced that was the big reason he was canned. From what I've gathered from friends in the auto biz, GM management wanted to sell Saturn but the board wasn't that enthused about it. They saw it as a competitor for Chevy. Not many RWD platforms come from Opel though. Cadillac has the premium rear drive platforms and they're engineered in the US. The other rear drive platforms: trucks (again US engineered) and the Camaro/Zeta platform (engineered by Holden/Australia). Opel is the source of the volume FWD mid-sizers (Malibu in particular) and some small cars.
- tnmats
December 2, 2009 at 3:28pm
Thanks tnmats - when I lived in Oz, Opel was the source of the Holden Commodore platform, but that's dating me by about 10 years at least.
- Nari224
December 2, 2009 at 5:48pm