If there’s a word to describe the feeling inside GM right now, it would be “nervous.” Though nobody was surprised that Fritz Henderson would leave at some point, it’s clear that his ouster was strangely timed and indicative of Ed Whitacre’s desire for rapid results. In an instant, Whitacre public image went from Iacocca-wannabe-pitchman to hard-charging Texas executive, seemingly defined by (get this) his penchant for killing rattlesnakes by pinning them with a stick and crushing their heads with a rock. So vivid is this metaphor, that according to Businesweek‘s David Welch, a number of GM executives actually offered their resignations to Whitacre immediately following the Henderson’s canning. Though Whitacre declined to let the bloodletting continue, a number of commentators now appear to believe that Whitacre wants to run GM himself. Though pay caps will be the easy excuse for not finding a new CEO, the board of director’s activism in clashing with Henderson over the Opel sale could discourage other executives from even considering the job. Moreover, Whitacre’s history of taking over companies and molding them in his image is well-established from his time at SBC/AT&T. So, will Ed Whitacre drop the pretense and the word “interim” from his title, or is he really just clearing the way for someone else?
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Who knows what will happen at GM. There is no precedent for what happened there. Rattner firing Wagoner. The government taking over ownership. A botched bankruptcy. The prognosis is not good. Leyland Motors tells us why.
They didn’t fire him, he offered to step down and they took him up on it. Do you really think that if GM had acquired private DIP funding that Wagoner would be there now. As far as I can tell the government has been more hands off than any bank would dream of.
Will Whitacre hire himself? Well if he does, that means he must think the problems at GM aren’t that big or he plans on living to be 120 yrs old. I mean how many years does he have left on earth to try to solve all the problems?
Ed Whitacre will hire someone LIKE himself, shit I just remembered G.W.B. doesn’t have anything better to do. (Just kidding just kidding, jezze I actually try to offend all political affiliations, just give me time and I’ll take a whack at the Democrats.)
It looks like one of those jobs you couldn’t mess up enough, so why not?
Upside: you oversee a period where GM stops bleeding money and are the savior of people and an example of something that works in this pansy bailout universe.
Downside: GM burns o the ground and no one blams you because “oh well it was inevitable.”
Make a pretty nice paycheck in the meantime.
Win. Win. Win. For everyone except the taxpayer.
I highly doubt Whitacre will remain CEO for very long. I don’t even think he intends to remain as board chairman for a long time, perhaps two years or so. I think his intention is to bring a lot of fresh blood into the organization right down to the mid management level which IMO is exactly what is necessary. One thing I think we need to keep in mind is GM is very recently out of bankruptcy and we are just starting to see the beginning of the massive changes that need to take place in GM’s management structure. I believe Whitacre’s role will be that of the agent of change and returning GM to profitability at which point he will step aside. A complete outsider like Whitacre is in his position of authority is the only one who could initiate the management changes and bring in other outsiders, it could not have been done internally. I am completely thrilled with the changes Whitacre has made thusfar in GM top management and think it bodes very well for GM’s future.
Whitacre strikes as the kind of guy who would find it almost impossible to let someone else do the CEO job their way, even if the person was great at it. I think he keeps the job at least through whenever a GM IPO happens. Whitacre is in this for the thrill of potential victory and could easily afford to work for free if he likes.
Someone had to come into GM and do the proverbial name taking and ass kicking. Whitacre seems like the kind of person who actually enjoys doing it.
I hate to offer this quote without attribution, but in the last couple of days I read that Whitacre, when the feds appointed him COB, said something like, “I’ve always been a CEO, I don’t know how to be anything except a CEO.” So I’d say that he concludes that he stays. Who would take the job anyway, with that kind of board chairman looking over your shoulder. That’s not to say, BTW, that he wouldn’t be good for GM. Heaven knows, they need something.
When you consider that several GM CEOs were also board chairmen (Wagner, both Smiths, Murphy) and presidents, and that the relationship isn’t uncommon on in corporate America, this doesn’t really seem unusual save for direction.
I think the timing of Whitacre’s firing of Fritz Henderson shows how little Whitacre knows about the car business. Manny Lopez at the Detroit News points out how firing Henderson on the eve of the Los Angeles auto show undercut carefully laid promotional plans regarding the Cruze, the Volt, and the CTS coupe. Since California is the first place that GM will sell the Volt, the various promotional and press events at the LA show are very important.
And what does Whitacre do? Steal all the thunder from GM’s own product promotion by firing Henderson on the eve of a major auto show where he was scheduled to give the keynote address.
Carefully laid promotional plans for GM? I don’t think its any secret GM has some problems to sort out, nothing new there.
The new product should/could/might stand on its own, I have never cared who the CEO was of any company that I was buying a product for. Its all about the product, GM spends more then enough tax payer money on advertising to make the buying public aware of any potential competitive products.
Ronnie, I totally agree that the ousting of Fritz just before the roll out of at least three important new cars at the LA show raises a red flag.
At the very least either he or the entire BOD are tone deaf to the necessity of generating positive buzz regarding new car launches.
Remember, he’s also undercutting the carefully laid promotional plans of the competition. This guy may be smarter than you think.
And what does Whitacre do? Steal all the thunder from GM’s own product promotion by firing Henderson on the eve of a major auto show where he was scheduled to give the keynote address.
I don’t think that’s ignorance, I think that was intentionally done for maximum impact. No one outside of GM’s very insular culture and fan base would have taken anything Henderson could have said seriously (this would include Manny Lopez), and many would have salted GM’s new product launches and PR efforts as reminiscent of the bedazzle’em-with-bullshit strategy they’ve been using to distract people from the mediocrity they crank out.
Well, now the topic on everyone’s lips (or fingertips) will be how GM’s leadership means business now. No more deckchair-rearrangement while the ship sinks.
While it’s impossible for an outsider to say, the timing of Henderson’s firing seems very much unintentional. I don’t believe that it was planned. I’ve been to a lot of board meetings, and this seems to be a case where a board meeting blew up.
Maybe canning Fritz was the best keynote address that GM could have given at the LA Auto show, especially in Mercedes/BMW/Lexus crazy California.
djn,
you make an excellent point, look at the tremendous amount of press time devoted to GM on the eve of the LA Auto Show.
Of course Whitacre will stay on as CEO for a year or two, probably long enough to get GM to the point of starting to pay back the government loans. His plan seems to be to “reinvigorate” the company by management shake-up, which is probably long overdue.
I don’t understand why so many commentators think the timing of Fritz’s resignation right before the LA Auto Show matters. The majority of the car buying public is unaware there even is an auto show occurring right now and couldn’t care less about new model introductions. If anything, the management shake-ups communicate the message that GM is trying to do something different than their status quo to solve their problems.
According to the resume that is in the first link, the guy is not a pussy. It’s not politically correct. Doesn’t believe in bullshit. And it’s TOUGH.
WIN.
Finally a real man in this time full of PC full of BS maricas.
Maybe he’s the one that is going to shake GM down to its foundations.
I have zero faith in this guy’s ability to solve GM’s issues. Fritz is better off having departed. He had one foot in his old GM mentality and one trying to pull things forward and kow-tow to this cowboy who probably knows less about car building than many of the B&B on this website. Fritz, by all accounts, was a good manager, just mired in the old GM thought process; he’ll be easily able to redeploy his skills in another industry.
As far as Wiseacre goes, his “git her done” mentality, sounds good in 30 second sound bites and plays well to an audience that is fed-up with GM’s dithering and bureaucracy but will he really be able slice through the Gordian Knot that has become GM? I’m not confident. Telephones and cars are hardly the same thing. The old AT&T was hardly a model of service and efficiency. Like GM it was an American icon that pretty much imploded under deregulation and the resulting competition that was created.
I think GM would be better served finding someone who is steeped in manufacturing and has a healthy respect/knowledge for marketing and customer service. I think ultimately that is what will happen.
Yes he doesn’t know about car building (but then did Mullaly or Marchionni?).
He knows how to run a huge corporation profitably and that’s what GM needs. Finding a CEO difficult, finding stars willing to work under a CEO and do the dirty work for the rewards (including taking over GM once it’s on its own again), not so difficult. His job is to lead and find the right people to run.
Basically it wouldn’t matter if GM hired auto jesus to run the show, everyone would find an issue with it. Only time will tell.
I think it’s important to reflect on Whitacre’s real mission at GM.
His job is NOT to fix things.
His job is to break things. Break everything. Piss off people and get them to leave.
Remember that you are dealing with a corporate culture that is in malaise. They don’t know what to do. Well, when no one knows what to do, they’ll just keep on doing what they’ve always done. The bureaucracy will simply soldier on, filling out forms, and submitting reports. They’ll hold the regularly scheduled Thursday meetings. After 3 years of meetings, they’ll produce an indifferent committee-designed car. The ancient Greeks had a nice saying that describes GM planning:
“After a great trembling of mountains is born a ridiculous mouse”
And that is what will continue to happen.
Unless, somebody makes the staffers angry. Some will get angry enough to leave; many will retire; a few will get angry enough to DO something. Those are the ones you need.
If, after a few years, there is a palace coup and Whitacre is forced out by demands of middle management, you’ll know that he’s succeeded.
+100 Lokki
I don’t think he’ll stay on as CEO, but I do think he’s looking for someone that thinks like him. Or at least wants to hire someone that will do things his way.
I agree with John Horner above.
We all know that a lot of name taking and ass kicking is needed right now at GM, after decades of living in a different universe.
What I’ll be interested to see if in future Whitacre is capable of inspiring his employees as well as he seems to create fear in their minds. It’s a whole different skill set. Anyone with power can be an ogre.
The second problem GM has is its quality reputation with the public and specifically Consumer Reports ratings. Whitacre has to address that aspect with the organization.
It’s been a few years since I was involved in a true Quality Assurance process implementation, but Deming’s principles are rather timeless. (Commercialization of QA has netted business some sorry apologies for consultants masquerading as QA specialists, who judge the whim of the CEO and sell watered-down ideas.)
The usual hard-charging CEO has usually barely heard of QA, and tend to think higher quality is just a case of “sitting on” a worker to make him perform error-free. In fact the whole system has to be designed to be error free from design to final assembly. And written down — with safeguards so that no high-faluting management type can change it on a whim.
I know Mullaly knows this stuff through and through, as it’s a requirement of the aircraft industry. I’m not sure of Whitacre’s knowledge, but delegating power to a system does not seem to be his style. Nor is it Ferdy Piech’s at VW, and they have poor reliabilty problems as well.
In any case, if people have an interest, they should google Deming’s 14 points and read them. I’ll just quote #10 here and let you be the judge of Whitacre’s likely long term success either as CEO or Chairman micro-managing a new CEO:
Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
Eliminate work standards (quotas) on the factory floor. Substitute leadership.
Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.”
He probably won’t have a choice…..who, with any talent, would want to stake their professional reputation on trying to turn around an auto company, in this economy, with such a high degree of government scrutiny and interference?
I say that they should make Corvette manager Harlan Charles CEO. He has a track record of delivering great products on time and under budget.
Eliminate the three layers of management between the CEO and the design and engineering teams. Elevate product people to run the company.
I created an account to comment on this. I’m a long-time ghost reader..fwiw. So here is what I have to say:
Those guys who killed the snake in the video at the top of the article are A**holes. What did it ever do to them? sad. I thought that out of the 26 comments on the article at lease one should put that sentiment in writing. Lest anyone think it went unnoticed.
Edwin
Ed Whitacre has taken over GM like taking a bull by the horns. He’s either a genius or an idiot. My money’s on him being an idiot.
Ed Whitacre has taken over GM like taking a bull by the horns. He’s either a genius or an idiot. My money’s on him being an idiot. Time