We’re not public yet but we will be and if we do our job that stock is going to have real value. We thought it was fair. We thought it was thoughtful
GM CEO Fritz Henderson comments on Pay Czar Kenneth Feinberg’s decision to dock his salary to a flinty $950,000. The AP reports Henderson’s total compensation could be worth $5.5m, apparently based on some unfathomable projection of GM’s IPO value. But Fritz is going to work for it. When asked if he’d read Steve Rattner’s magnum opus calling GM management “stunningly poor” and “perhaps the weakest finance operation any of us had ever seen in a major company,” Fritz’s responds in the affirmative…
There was a lot of truth in it. You’ve got to take that to heart. You’ve got to internalize it and say, “How do we change?” We went bankrupt. We’ve got to change
Dude, you were the Chief Financial Officer at GM for over three years before Rattner pushed Rick Wagoner out. The “weakest finance operation any of us had ever seen” jab was at you. Of course it also raises the real underlying question: if GM’s finance operations were in such deplorable shape, why did Rattner’s Rescue end with a promotion for the CFO? Oh right, Rattner already explained that one:
Later, I spoke to Fritz, who expressed enthusiasm for his proposed promotion but asked that he not be called “interim” CEO. “You can fire me anytime you want, but at least give me a better chance to succeed,” he said. We agreed.
GM’s IPO gets closer with every passing day (in theory), and something tells me Steve Rattner isn’t going to invest his own money in the half-hearted rescue job he engineered. So why raise a fuss by firing Fritz now? Hey, the guy works cheap and doesn’t complain.
While GM North America is going to fail (earlier this year I had two articles in Fortune arguing against a bailout), you should give Fritz a break. I’ve known Fritz for more than two decades. He did a terrific job overseas, resulting in his fast promotion to CFO and now CEO. It isn’t his fault that GM’s lineup is so weak (none of the 2010 models were developed under his watch) or that its costs were appreciably higher than its overseas competitors.
I agree somewhat with Ron. He is a result of the old system and I have my doubts, but I am willing to give Fritz a fair shot. I say give him at least two more quarters, then you can start judging him based off the results of that.
There is (or there was) a little corporate requirement called Sarbanes–Oxley Act . It came to light after Enron disaster (well it was a fart compare to GM disaster, but was disaster in 2001). There was nothing new in SOX that was not in securities laws since 1987, except Sarbanes–Oxley Section 802: Criminal penalties for violation of SOX. Messrs Henderson and Wagoner should be facing prosecution according to SOX and their only defense could be either incompetence or stupidity. I wonder who is stupid and who is incompetent between them: once was fired with over 20 mills parting bonus another got promoted.
Ron,
Presumably if Fritz inherited this pigs ear of a GM presumably you might also accept he could also have inherited a silken purse when he worked overseas at GM?
Alarm bells should be ringing in the ears of anyone that can see through the lame crap he comes out with month after month.
He has a business plan based on $140-$160 oil. Do a schoolboy check of the records. We only see over $100 a barrel oil for 1 in every 40yrs. Fritz is wedded to his $140-$160 a barrel plan and criticizes anyone outside his ivory tower for trying to let some reality in. Yea Fritz has a plan that only works in reality for 1 year in every 40.
Under Fritz cars are now approved by a monthly committee of 40 or more. Anyone that’s attended committees of more than 3 people and found its output productive can be found at the funny farm. Large committees just don’t work.
The GM plan has culled 8 brands down to 4. And also reduced management and admin staff by 23%. Do the maths. A 50% reduction in brands with a 23% decrease in staff equals a 50% INCREASE in beauracracy per brand. This is a plan planing to be top heavy and bogged down in red tape.
Absolutely nothing Fritz says or does gives anyone any confidence GM is going anywhere but the bankruptcy court fast. Period.
If and until GM’s entire upper echelon of management is replaced I don’t think they stand a chance. I view Henderson as merely giving lip service to culture change rather than actually instituting it. I honestly think he and his cohorts view the new GM as business as usual with a clean balance sheet and operating capital. Exactly what has he either done or said he intends to do that would make anyone think otherwise? Albeit he’s as good as anyone in the broad and glittering generalities dept. i.e. listing to customers, giving customers positive experiences, rapid decision making etc. Susan Docherty was on our local news tonight proclaiming that now decisions that used to take months are made in days or hours, more lip service. Trying to resuscitate the “new” GM with management from the “old” GM has no chance of success for obvious reasons. Obvious that is to anybody besides GM themselves.
Ron: “It isn’t his fault that GM’s lineup is so weak (none of the 2010 models were developed under his watch)…”
But isn’t that the problem? It never seems to be anyone’s fault. It’s always the same story. Although I’m sure the answer is highly complicated, whose fault is it that GM has produced decade’s worth of mediocre* (at best) vehicles for the American public? Peddling them under the inane belief that with their ‘built-in” abundance of loyalty-bound customers and their spawn would always consume enough new cars and trucks.
*exceptions certainly exist
I don’t think anyone who DOES NOT WORK FOR GM should comment on what changes have and have not been made. To just assume that nothing has changed is wrong. I feel that only the people who work for GM and are inside the company, not like us looking in, know what has and hasn’t changed.
Time will only tell for those of us outside the company if things actually have changed. To think either way without factual information is wrong.
autonut :
I wonder who is stupid and american taxpayer who is incompetent between them: once was fired with over 20 mills parting bonus another got promoted.
Fritz would still have a semblance of a paycheck if GM had proceeded through a normal bankruptcy, without being owned by the US government. I am totally against the class warfare and salary intervention being waged against bailout recipients by the US government.
GM is a trainwreck. The divisions need to be broken up and run separately or it’s doomed. Mercedes-Benz sell luxury cars to luxury buyers. BMW go after their sporty status customer.
Toyota and Honda go for the middle class practicality-buyer, but with the distractions of running luxury divisions are coming under increasing threat from Hyundai and Kia for their core markets.
What makes GM think it can do all the things the above brands do, and do them simultaneously and competitively?
Response to Spanner77
When Fritz took over Brazil, GM was using previous-generation models primarily developed by Opel. He quickly skipped a generation and modernized GM’s plants so that they were world-quality.
Check today’s Wall Street Journal for the article about congressional meddling (surprise, surprise) in the auto industry.
Here’s the Wall Street Journal article about Congressional meddling in GM: http://online.wsj.com/article/SB125677552001414699.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop
Ron,
Fair enough but there’s a host of parameters i’d need to agree with you Fritz turned around GM Brazil.
And as i’ve detailed, judging by his love of Sovietic style planning, faith in over-sized committees and the crap he’s talked to date, i’m convinced this bit-of-a-dork couldn’t drive a school bus let alone a Detroit giant into rude good health!
Time will tell… not that he’s got any. The Republicans will be taking office in Oct next years elections (cue end of the US Govts teet to suckle on).
Oh GM are going to re-float are they? Wait til you see what the recession does to investors risk appetite next year (barely breaking even car companies need not apply).
Well, it does sound like GM is going to post a year-over-year sales gain for October, with 95 percent of the sales coming from the core four (Chevy, GMC, Cadillac, Buick).
I’ll cut him some slack if this wasn’t a fluke.