GM’s CEO search to focus on outsiders
|December 2, 2009||http://detnews.com/article/20091202/AUTO01/912020365|
GM’s CEO search to focus on outsiders
Finance chief also sought as company aims for 2010 IPO
Detroit News Washington Bureau
Washington — Now what? Or more appropriately, who?
That’s the question people are asking as General Motors Co. — already searching for a new chief financial officer — focuses on another, more important search: chief executive officer.
Fritz Henderson resigned Tuesday after serving the shortest term ever as GM CEO. Now the Detroit automaker will rely on board Chairman Edward Whitacre Jr. to run the 101-year-old company until a replacement is found, which could take months.
In many ways, the writing has been on the wall since March, when the Obama administration’s auto task force pushed out Rick Wagoner as GM’s chairman and CEO. The task force had considered removing Henderson as well — he was then-president and chief operating officer — but decided to promote him instead because it would take too long to find a replacement.
Henderson served as CEO for eight months, short of the 27-month tenure of Robert C. Stempel in the early 1990s.
What’s next for the automaker will be decided by Whitacre and the board of directors, which has taken an active role in GM’s management since the company emerged from a quick bankruptcy in July.
Whitacre, former chairman and CEO of AT&T, told senior GM leaders in a call late Tuesday that he wasn’t looking for a long tenure as GM’s CEO. He planned to address employees today via telecast."Our company is on the right path," Whitacre said at Tuesday’s press conference. "But we now need to accelerate our progress."
Van Conway, a restructuring expert, said Henderson’s departure was not unexpected: Companies that endure major overhauls or bankruptcies typically get a new CEO, often an outsider.
"The (Obama) administration didn’t want to move both out in the middle of a tornado," Conway said. "Now the new board has decided it wants to go in a new direction."
That future is being driven by a board composed of savvy financial veterans, who are taking the Obama administration’s mandate for change to heart. The board previously overturned the recommendation of Henderson’s management team to sell GM’s German Opel unit, and Henderson had reportedly clashed with the board on other issues.
There were problems from the start. The new board, along with the task force, found problems with GM’s management, its culture and its financial team. Former auto czar Steven Rattner said GM needed an "amputation."
Rattner noted senior GM executives worked on the top floor of Detroit’s Renaissance Center, behind locked and guarded glass doors. They had special cards "that allowed them to descend to their private garage without stopping … No mixing with the drones."
Henderson, a career GM executive who rose through the company’s ranks, vowed to change the culture and quickly began meeting regularly with the media, dealers and consumers, but still clashed with the board, particularly because he hadn’t named any outsiders to GM’s management team.
In October, Henderson announced sales chief Mark LaNeve would leave the company and GM was considering appointing an outsider. Hours later, GM said it had promoted a veteran, Susan Docherty, to LaNeve’s post but would replace her with an outsider. That happened Tuesday when Michael Richards was appointed head of Buick GMC. Richards is a former Ford Motor Co. executive who has also held sales and marketing roles with automotive information companies such as J.D. Power and Associates.
To fill the CEO post, however, Whitacre and the board must find an executive undaunted by running a company in which the U.S. government owns a 60.8 percent stake, and willing to negotiate a pay package that will require approval by the U.S. Treasury. The timing is also critical — GM wants to make an initial public offering of its stock in the second half of 2010.
It isn’t clear whether the new CEO will be in the style of Ford Motor Co. CEO Alan Mulally, a former Boeing Co. executive who has left most of the Dearborn automaker’s management team in place and brought in few outsiders since taking the reins in 2006.
Rep. Thaddeus McCotter, R-Livonia, said Henderson’s abrupt departure was difficult on GM employees.
"You don’t know whether this signals an intensified restructuring process," McCotter said.
"If your board doesn’t like you, you aren’t long for that job. He who appoints the board tends to control who runs the company."