As CEO, Whitacre may bring stability to General Motors

January 26, 2010 http://detnews.com/article/20100126/OPINION03/1260380

As CEO, Whitacre may bring stability to General Motors

DANIEL HOWES

General Motors Co.’s third CEO in less than a year is a Texas telecom retiree who says he’s "sort of learning" the car business and will be commuting to his job atop Detroit’s Renaissance Center.

Notwithstanding the relative absurdity of that notion, Edward E. Whitacre Jr. may, indeed, be the right guy for the times at GM. The automaker, a ward of the federal government, desperately needs stability, accountability, clear direction and the renewed confidence that could come with some fresh market success and a brightening economy.

"This is a great company with a great future and I want to be part of it," Whitacre said Monday in his trademark Texas drawl, officially dropping any pretense that GM is searching for a CEO. "This company is good for America."

Nice to hear, after so many months of hearing the opposite. But the more salient question is whether Whitacre, the Obama administration’s hand-picked chairman for the automaker’s post-bankruptcy future, is good for GM.

"Do not underestimate this guy," a GM executive who’s worked closely with Whitacre told me privately this month. "He makes decisions. He’s got people focusing on all the right things. He’ll never be a car guy, but he’s a helluva CEO."

Whitacre’s installation as CEO, more or less an open secret for the past month or so, betrays an understandable bias inside GM’s boardroom for executive capability at the top over deep automotive chops and, especially, a GM pedigree. He represents relative stability — and the company’s primary shareholder — after more than a year of corporate chaos and a revolving door in the executive suite.

He’s forged a strong personal relationship with United Auto Workers President Ron Gettelfinger, who says Whitacre is "down to earth" and "gets to his bottom line." Even as he woos outsiders to key staff jobs in government affairs and finance — including a new CFO from Microsoft Corp., Christopher Liddell, considered a potential heir apparent — the former AT&T Inc. chairman clearly is willing to elevate longtime GM hands to operating jobs to test their capability.

Boss fishes in the talent pool

His new head of GM-North America? A direct, deep-dish car guy named Mark Reuss, the plain-spoken son of the GM president ousted in the beginning of the ’92 revolution. His top U.S. sales exec? A Canadian named Susan Docherty who’s held sales jobs in North America and Europe. His top product guy? GM’s gearhead-in-chief, Tom Stephens.

"You don’t feel like you’re second-guessed," Stephens, vice chairman of global product operations, said of Whitacre’s management style. "If your job is to do something, he won’t do it for you. I love the empowerment and accountability. That’s why I’m in this business."

In this, Whitacre represents another outsider who came to Detroit more than three years ago to get rival Ford Motor Co. back on track. Alan Mulally, a veteran of Boeing Co., is engineering a convincing turnaround of the Blue Oval using many of the same tools that Whitacre (and, before him, the president’s auto task force) is using:

There are fewer brands, fewer people and fewer plants. There are few new outside faces in key jobs — Ford’s marketing chief hails from Toyota Motor Corp., for example. But the core engineering, design and manufacturing people are company veterans, a testament to the capability that is buried in these companies and is producing some of their best products in decades.

In both cases, the fundamental difference between past and present is fresh eyes, clear leadership, accountability and a readiness to embrace the competitive world as it is, not as the executive floor wants it to be. Whitacre is far less of a car guy than Mulally, a trained engineer who’s spent his whole professional career designing and building things to sell to customers.

But I’m not sure that matters right now. GM needs someone who can separate performers from poseurs, a leader who’s comfortable assigning tasks to subordinates and holding them accountable for results, a CEO who has credibility with the capital markets, would-be investors and the remnants of President Barack Obama’s auto task force inside the Treasury Department.

"Ed Whitacre knocked the cover off the ball," Steven Rattner, head of the president’s auto task force, told me in a brief interview at the North American International Auto Show. You’d expect the guy who wooed Whitacre out of a comfortable retirement in Texas to talk up GM’s CEO, but the vote of confidence underscores why Whitacre probably is the right guy for the right time.

No guarantees — even in Texas

GM is in a crucial credibility rebuilding phase. It needs to pay back the government’s $5.7 billion in remaining loans, which Whitacre says will happen by June. It needs investors to consider its turnaround legit, a precondition to any initial public offering that would presage the government’s exit from its stake in GM. And it can only do that with a) market and sales performance and b) financial results and c) credible management unhitched from the past.

GM also needs would-be customers to look past its historic (and politicized) bankruptcy, the dealer closings, the brand cuts and the plant shutdowns to give its cars and trucks another look. So long as the economy stays away from another unforeseen crater, there’s a decent chance that can happen.

But there are no guarantees, even for a 68-year-old hotshot from Texas.

Whitacre will be unlike any GM CEO before him. He won’t live in a rambling home in Bloomfield Hills; he’ll commute from San Antonio, spending the work week at a downtown Detroit apartment.

Unlike previous GM CEOs, who used their perch to dominate select circles outside the company, he likely won’t be a fixture on the charity circuit or in civic groups; nor is he likely to be a deep-pocketed donor to the arts because Detroit won’t be home.

He also won’t tolerate the middling results and unfulfilled promise that brought GM to its knees, forcing a reluctant White House to engineer a rescue to avert an economic calamity. Unlike his predecessors atop the General, Whitacre has scant patience for excuses or poor results and he has a visceral mistrust of arcane, long-winded explanations.

He assigns responsibilities, to the point of hand-writing names next to items on a meeting agenda, and he expects accountability. He runs the company’s executive committee meetings in two hours instead of taking the customary day. And he has a bias for making decisions.

Which is just what GM needs.

dchowes@detnews.com">dchowes@detnews.com (313) 222-2106 Daniel Howes’ column runs Tuesdays, Thursdays and Fridays

Additional Facts

The Whitacre file

 

  • Age: 68
     
  • Education: Industrial engineering degree from Texas Technological University
     
  • Started career at Southwestern Bell in 1963 as facility engineer
     
  • Named president and chief operating officer of SBC Communications in 1988
     
  • Elected chairman and CEO of SBC Communications in 1990
     
  • Elected chairman and CEO of AT&T Inc. after it merged with SBC Communications in 2005
     
  • Retired in 2007
     
  • Sits on boards of ExxonMobil Corp. and Burlington Northern Santa Fe Corp.
    Source: Detroit News research

     


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