‘Changes needed to be made,’ says Whitacre, who will serve as interim CEO until a replacement is named

December 1, 2009 http://detnews.com/article/20091201/AUTO01/912010439

GM chairman Whitacre takes over as CEO Henderson resigns

‘Changes needed to be made,’ says Whitacre, who will serve as interim CEO until a replacement is named

DAVID SHEPARDSON AND CHRISTINE TIERNEY
The Detroit News

General Motors Co. president and CEO Fritz Henderson resigned Tuesday and will be replaced on an interim basis by the company’s chairman, Ed Whitacre Jr.

Whitacre said he would be working out of the company’s headquarters on a daily basis until a new president and CEO is named. He took no questions and spoke for two minutes.

"We all agreed some changes needed to be made going forward," said Whitacre, the former AT&T CEO who has clashed with Henderson on a number of fronts in recent weeks.

Henderson served as CEO for just eight months — the shortest of any CEO in GM’s history. GM’s Robert C. Stempel was forced out after just 15 months in 1992.

GM’s board has had a search ongoing for a new chief financial officer — and interviewed numerous candidates in recent weeks. Those candidates will now be considered for the CEO, an official said.

The board made this decision and notified the Treasury Department, which holds a 61 percent majority stake in GM, but the government had no role in the decision, said GM spokesman Chris Preuss and the Obama administration. "This decision was made by the board of directors alone. The administration was not involved in the decision," the White House said.

Whitacre was installed by the Treasury Department as the company’s chairman after GM’s bankruptcy reorganization. It came after the administration repeatedly criticized GM’s corporate culture as too insular and too resistant to change.

Whitacre plans to hold an employee telecast Wednesday on the change. He told GM’s senior management late Tuesday he doesn’t plan a full-scale shakeup of the company’s management team. One person close to the situation said Whitacre may be looking for an Alan Mulally-type CEO. The former Boeing executive turned Ford Motor Co. around. He has brought few outsiders in and mostly runs the company with long-time Ford executives.

Henderson was in good spirits and was returning e-mails, officials said.

Steve Rattner, the former Obama administration auto czar, has sharply criticized GM’s management and said that "only through amputation could GM be saved."

"Nobody signed any lifetime job contracts for Fritz. This was a chance to show what he could do," he said last month.

Henderson said criticism from Rattner had merit in an interview last month with The Detroit News and the Associated Press.

"There was a lot of truth in it, and you have to take that to heart and you got to internalize it and say how do you change? We went bankrupt. We’ve got to change," Henderson said. "There were some things I didn’t necessarily agree with, but that’s not the point. The point is how do we change to be successful."

A former auto task force member noted that in an early meeting with the administration after being named CEO, Henderson was asked about GM’s culture. After giving a meandering answer, Henderson stopped and said: "This is the only culture I’ve ever known" and vowed to shake up the company’s culture.

Henderson had clashed with the board over the decision to sell the company’s European unit Opel and Vauxhall. The board rejected management’s proposal to sell the unit.

Henderson, who was a college pitcher at the University of Michigan, joined GM in 1984 after attending Harvard Business School.

He became CEO in April after the Obama administration forced out chairman and CEO Rick Wagoner. Henderson held a number of positions, including head of its Brazil operations and Latin American unit. In 2002, he became president of GM Asia Pacific.

In 2004, Henderson was named head of GM Europe, followed by a promotion to CFO in June 2006.

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