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“I don’t know anything about cars. A business is a business, and I think I can learn about cars. I’m not that old, and I think the business principles are the same.”
—Incoming GM Chairman Edward Whitacre Jr. admits his lack of auto experience to Bloomberg
44 Comments on “Quote Of The Day: Meet the New Boss Edition...”
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Well, the old bosses of GM didn’t know anything about cars either, so this guy should fit right in.
It seems to be working for Mulally.
I envision BAD days ahead for the new GM…
A business is a business
Engineer: “We can develop a new high MPG platform to compete with the Asians, or we could just badge engineer some penalty boxes from Korea”.
New CEO: “At my old company we survived hard times by cutting costs, which is the least expensive option?”
Beancounter: “Importing Korean junk”
New CEO: “Ok, do that”
Marketing: “Our products are getting stale and people perceive them as being low quality”
New CEO: “At my old company we grew investor value by strategic acquisitions of competing brands, are there any brands available out there ?”
Yes-Man junior executive: “I see in the Wall St. Journal that Saab, Hummer, Saturn and Pontiac are all up for sale”.
New CEO: “Ok, buy them”.
Ok…The CAR~BIZ ..should be exclusive too.
CAR~PEOPLE….
Many outsiders have tried..most went away
While stock holders sat on their butts ,
the soon to be extinct U.A.W raided the House .
As the executives carried it out the front door.
A note to Wagner ..Rick PUTT the money back! NOW!
Not a plea..theft is illegal..
Real Car Guys are scarce….Lutz,Iococa..
Henry,Walter P.Billy Durant…
Oh yes We do have 1.
GM you can not have him…Roger Penske..
Run this like ATT/SBC and we all will be forced to
switch providers..
Slamming combined with …BS (sound familiar?)
“You have reached No Customer service”
Here is a Road Map
A BOARD of car dealers…we know how.
We are here and we will be!
Can you accept the HELP?
The U.A W get ready..it is only time before
you are GONE !Not a wish of mine.
A real observation..
Oh yes stock holders..
Why do you think you should earn the bulk of profits.
While Doing Nothing? WORK Work Work !
Profits can generate Bonus ..after the bills are paid.
I am an independent car dealer…gas..oil…tires..cars are my life.
Now the Phone Company and Home Depot want in?
Start where I did washing cars..if you do good…we will promote you..
Salu Roger !
In Wisconsin for those we ask !
Best of all to the real car people..
Not necessarily a bad thing.
What’s bad is when the boss doesn’t know anything about cars, but thinks he does.
Refreshing candor.
Crazy how the WTO isn’t after us for bailing GM out. Remember how upset we were about EU subsidies for Airbus? You’d think they’d try to stick a fork in us for our hypocrisy.
Mr. Whitacre Jr has turned a public utility into an unregulated, in practice, wealth extraction engine. It is hard to see how that history prepares him to face the market. Will he get the government to coerce us into buying GM vehicles?
On the other hand he may have not bought enough indulgences while at ATT and be preparing for the afterlife, in which case I wish him the best of luck.
Well, at least he admitted he didn’t know anything about cars. The previous several CEO’s clearly demonstrated they didn’t but lacked the juevos to say so.
That being said, ya kinda have to wonder why a very successful CEO from a mfg company wasn’t chosen.
Mulally was credited with turning Boeing around, but Mulally grew up in Boeing. He knew that product, and one would think, understood complex manufacturing environments. Does anyone think Whitacre has a similar knowledge or track record of success?
Ok…The CAR~BIZ ..should exclusive to..
CAR~PEOPLE
And to counter that example, I give you, oh, just about anyone in the upper ranks at Toyota.
Car people can—and often do—as poor a job at designing, planning and executing as their non-car-person equivalents do. Take Bob Lutz, who seemed to have real trouble coming to grips with the fact that what he wanted wasn’t what the average car buyer did. Or Lee Iaccoca, who seemed to fail to understand that people wanted a reliable car.
A good leader needs to be able to motivate, make decisions, and who, when and how to tap talent in (or apply the screws to) the organization. In short, a leader has to lead. Nowhere does it say that person has to have a specific set of letters after his or her name. GM’s bad managers where bad because of reasons too numerous to list here, one of which is not “because they were accountants or marketing dicks”.
Anyone who tells you that, eg., engineers have a better understanding of the car business is suffering from a serious case of either delusion or professional arrogance.
@Fritz: “wealth extraction engine”. I must remember to use that awesome term.
“On the other hand he may have not bought enough indulgences while at ATT and be preparing for the afterlife, in which case I wish him the best of luck.” Excellent.
That being said, ya kinda have to wonder why a very successful CEO from a mfg company wasn’t chosen.
It’s actually easy to understand: would you put your reputation on the line to take on the managerial train-wreck that is GM? The organization that makes a habit chewing up and spitting out any leader who tries to push change?
I wouldn’t take the job for any amount of money unless I was already set for life and/or knew damn well I could go through the corporate heirarchy like a quart of castor oil.
Yeah, BUT this guy has connections in DC or am I wrong about that? If he messes up he can ask Uncle Sugar for an extra bil or five.
For all the techies here, I found this interesting:
http://www.dslreports.com/shownews/Ed-Pipes-Whitacre-To-Run-GM-102859
“Seems that a man who comes from an industry that put the NO into the word ‘innovation’ has a chance to set his mark once again, this time in Detroit…”
Well lets see the last 5 CEO morons that ran/ruined GM didn’t know anything about cars so I think he will fit in perfectly. Prediction- by 2015 there will be no more GM.
Anyone remember Mr John Smale from Procter & Gamble?
Or Ron Zarella?
Diapers, Soap, Cars, what’s the difference? How hard can it be?
Mulally may not know about cars, but he understands the challenges of manufacturing; he understands what he DOESN’T know and isn’t afraid to admit it; he does have some good people working underneath him; and he has the support of the man whose “name is on the building.”
Making cars is a products business.
Providing telecomm is a services business based on other’s products. (The old AT&T/Bell System lost it’s way making products back in the ’80s.)
Big difference.
At least Mullaly came from a manufacturer with designers, engineers and long-lead time manufacturing.
The guy is an engineer and he knows nothing about cars…He’s a Bum.
Agree with the jist of many posts here: Cars are not widgets or any other product/service/business. Best of luck to him but seems like same shit different fan for GM.
GM has been led by financial types for years. Their primary problems have not been financial, they have been product problems.
In his favor, he is an outsider and maybe an outsider at the very top can do something about the organization and the culture.
Also in his favor, he has an engineering background, as I understand it, so he can at least understand something beyond finance.
However, he has some headwinds. He has no experience in product development or in customer service (who among you has dealt with AT&T?). If he pulls in some real automotive/manufacturing/quality talent, maybe there is a chance.
Verdict – he is better than what they have had since the 70s, but I’m not buying yet.
The Wall Street Journal opines that Whitacre was selected for his political capabilities:
http://online.wsj.com/article/SB124459020217899987.html
Given that GM is a government slush fund and not a real car company, it is fitting that it be headed by someone who is not a real car guy. As citizens, our job is to stop the present GM scam (and all of its potential, future phases) cold with a boycott.
I’m reminded of Apple Computer’s precipitous decline under John Sculley, hired on the principle that producing computers is the same as producing sugar water.
I sorry but you’re all missing the point with this guy….
Mr. Whitacre is taking over not because of competence in ‘cars’ rather his ability to manage the political arena.
ATT was a very regulated, political company – because of said regulation. Even if we like it or not, GM was/is just as politically connected – and not in a good way.
Close a factory, deal with local politicians and the Michigan Congressional caucus. Negotiate with the UAW – and you negotiating with the Democrats that got elected by the UAW. Lobby for changes in CAFE regulations – deal with congress. Extend a tariff on small Asian pickup trucks – see where I’m going with this…. OK.
So, from this perspective (and this one only) he’s probably a good choice. Now all they need to do is hire Alan Mullally’s clone for Head of Operations.
There seems to be some misunderstandings here.
Whitacre is not the new CEO of GM. He is the chairman of the board of directors.
The board of directors is there to protect the shareholders and to serve as a check-and-balance against the CEO. The board does not manage the operations of the business, so much as it serves as an advisory committee.
The board members don’t need to be experts in the car business. They do need to keep the CEO and senior managers on their toes and they do need to make sure that the shareholders (that would be us) don’t get screwed. It’s a different job from CEO, and can’t be judged in the same ways.
I’m reminded of Apple Computer’s precipitous decline under John Sculley, hired on the principle that producing computers is the same as producing sugar water.
Again, that’s a failure of leadership and vision. Sculley didn’t have much of either, nor did his successors. Steve Jobs very much does, and it’s the vision and drive that matter, not the technical knowledge.
Of course, Steve Jobs also drove Apple nearly to ruin the first time around, and then proceeded to bomb at NeXT, so vision and leadership need to be tempered by business acumen (something he has now, but didn’t to the same degree in his earlier days).
GM’s leadership had none of the above.
@ psarhjinian:
Of course, Steve Jobs also drove Apple nearly to ruin the first time around, and then proceeded to bomb at NeXT, so vision and leadership need to be tempered by business acumen (something he has now, but didn’t to the same degree in his earlier days).
GM’s leadership had none of the above.
I would also add that Jobs is one of the few business leaders in recent memory who appears to have developed enough self-awareness to learn from past mistakes.
Bill Belichick has shown this ability in his NFL coaching tenure. Compare his days with the Browns to those with the Patriots.
Mullaly seems to be doing a decent job at Ford even though it is his first time in the car biz.
SBC’s reinvention under Edward Whitacre is the stuff of modern business legends. He eventually acquired what was left of AT&T for SBC and renamed the combined company AT&T due to the much wider brand recognition of that name.
The telecommunications business has gone through a complete revolution after these past few decades, and Whitacre was one of a very few executives who navigated those times well enough to come out on top.
The little I know about Whitacre is that he’s smart and tough. And a real builder who thinks every organization is better run if he’s the one making the decisions. Not one of these MBA financial guys who will cuts costs to the point of gutting operations if it fattens the bottom line and juices the stock price.
Given GM’s chapter 11, becoming the new chairman is like becoming coach of the Cowboys or manager of the Yankees. Everyone in America will know who he is and will have an opinion about what he’s done or should do. He can’t walk down the street for a cup of coffee without hearing from every supermarket bagger on what really ails GM.
Whitacre will either rise to the occasion or have a breakdown. At this point in his life he wouldn’t have taken the job unless he thought he could do some good. And being the GM chairman who guides the company back from the dead — is there any better way to cap a successful corporate career?
My sense is, he’s going to be on the phone three times a day to Henderson telling him what to do.
So Whitacre doesn’t know squat about cars. But he’s known for not coddling subordinates who fail to deliver. He got no known loyalties to any GM faction. If wiping out 2-3 layers of top managers is what’s needed to motivate the rest, Whitacre won’t hesitate.
He may be the start of something good for GM.
He may be the start of something good for GM.
I agree… Shoot they named an Engineering School after this guy… He must be smart…
http://en.wikipedia.org/wiki/Whitacre_College_of_Engineering
its about time GM had an engineer in the top seat…
A GREAT Pick!
I got two words for all of you naysayers: Alan Mulally.
If you wanted a telecom guy, then your man is C. Michael Armstrong.
And before anyone goes crazy, remember, his biggest competitor was cooking its entire sales book and financial statements.
Whitacre’s business remains too regulated for him to understand the manufacturing world. They should have grabbed either someone from Mazda because they seem to be able to sell successfully small cars or Caterpillar, which like Boeing, builds heavy equipment around the world.
I’d like to see him drive a Mercedes or Bimmer or Jag to work. The CTS is nice, but I’d trust him some more if he admitted what cars he really likes, I mean what other good cars look like.
Ask any IT guy that buys networking services, or your CIO, and he will tell you that incumbent telco’s are 100% evil. The fear of the ILEC is the beginning of wisdom. They will ALWAYS figure out how to screw you over.
I am willing to believe that Whitacre might be able to deliver, if he truly gets in there and kicks butt, taking no guff or excuses.
However, that still won’t result in me buying a GM vehicle for several years. The only domestic I will consider is Ford because they did not turn all corporate-fascist in taking government money.
Aside from that my Toyota has been treating me well and I will consider Toy / Honda / Subaru etc. first. Why? Because they have cultivated the habit of building reliable vehicles.
I said it before, and it bears repeating.
Read “The Machine that Changed the World.”
The car business is many things, many types of businesses, but the crux is the operations business. Not because operations is the most important piece here, but because it’s the most EXPENSIVE.
If GM and Chrysler can move to the lean model as Ford did, their costs will drop dramatically and productivity will increase. Why can’t an engineer turn around a fundamentally operations-based company?
Read “The Machine that Changed the World.”
Terrific book, I highly recommend it, too.
If GM and Chrysler can move to the lean model as Ford did, their costs will drop dramatically and productivity will increase.
They already use aspects of the lean model now. However, they have implemented it poorly. They never understood that lean doesn’t work if management isn’t reinvented and workers aren’t empowered. Getting rid of job classifications while maintaining centralized power is to avoid much of what makes lean work in the first place.
Their costs are already low, so I don’t see cost reductions in their future. However, if they could use lean to improve assembly quality and combine that with a focus on engineering and design quality, the cars should be better, which would lead to higher revenues, that would allow them to eventually hurdle the costs and turn a profit.
Mullaly is showing some success, because he listens. The man listens to the man on the floor, his lower level engineers, and combines with what his overpaid out of touch management team tells him.
How has AT&T done? Haven’t they lost of ton of market share and customer satisfaction gone way down? Naredelli attempted to follow Jack Welsh’s consumer approach to auto customers. It failed miserably with Jac Nassar, and failed again with numb nuts nardelli. Auto customers are purchasing a product that drastically depreciates, takes a substantial portion of take home pay, and is an emotional purchase. Auto business is tough, and the MBA’s have literally destroyed the business.
Mullaly is showing some success, because he listens.
And he holds people accountable. Remember when he first took over at Ford and for his first staff meeting all/most of his direct reports had their entourages along to answer questions the direct report was not prepared to deal with. Mulally put a stop to that and told them to be prepared to deal with whatever came up at the meetings. Within a few weeks quite a few had found other ways to spend their time and things got moving. This guy will be a tremendous improvement if he can just stay awake. What kind of board would have tolerated the decade-plus of abject failure that Wagoner produced? Year after year, lose money and market share spewing the same bullshit about how the coming improved models were going to turn things around. So far as we know he wasn’t picked by Fritz, so Fritz, LaNeve, Young, etc. are just employees to him and can be dumped if they don’t perform. I expect to see some new faces at the top in the next months. Somewhere down a few levels are people who can tell him what he needs to hear if he’ll do some walking around and ask and listen.
The board members don’t need to be experts in the car business.
Yes and no. A board should do what they want and feel they need to do unless they’re beholden to the CEO. As I understand it, the old board approved new vehicles. That would include the Aztec of course, the SSR and the Aveo. Obviously it didn’t take an expert to know these things were mistakes, since the average consumer rejected them based just on appearance and maybe a test drive.
At least he’s a clean break from the bean counters who’ve run GM into the ground for the last half century. One can only hope that he studies their mistakes: http://www.examiner.com/x-6882-Classic-Autos-Examiner~y2009m4d17-GM-near-bankruptcywhat-happened
“How has AT&T done? Haven’t they lost of ton of market share and customer satisfaction gone way down?”
AT&T did so badly that one of their former baby bells, Southwestern Bell (SBC), picked up the parent company on the cheap and renamed the whole thing AT&T. Whitacre is the hard driving, engineering trained executive who led SBC’s re-assembly of much of the pre-breakup AT&T while focusing the combined company on wireless and high speed internet services. Whitacre bought out the former parent company and turned the thing into a very successful modern company. AT&T wireless is gaining market share at a rapid clip right now, thanks in part to its exclusive deal for the iPhone. AT&T embraces the world standard GSM phone technology while rival Verizon is stuck with a largely USA only CDMA POS.
Sometimes, strange and exceptional situations require strange a exceptional solutions.
a chairman sadly is as good as his advisers, so Mr Whitacre being where he is he should be a good judge of character and surround himself with competent people that know a thing or two about cars. i hope.
my solution would be to bring Ross Brawn into the equation, now that guy can do miracles just by putting the right people in the right places. leadership takes talent, i think ….
John Horner,
Thanks for your posts. Mr. Whitacre I apologize for being uninformed. SBC was an interesting forward looking company to your credit.
Here we go again: big car company being run by a suit who knows nothing about cars. Gets around in a limo driven by somebody else. Only drives his own products on a closed test track once or twice a year. All the serfs at the test day are too scared to admit the cars on hand are actually hand-built and very different from the crap that reaches the dealers.
In the mean time, the bean counters will nickle and dime the engineers, suppliers and dealers to extract the maximum profit from every car. Quality will take a dive and the public will look elsewhere for something that does not fall apart from day one.
The above recipe for disaster is a tried and tested one and this non-product oriented non-car guy will probably try it again. Where do you go from Chapter Eleven? It seems that Chapter Seven is not far away…