Whitacre: Bosses nearly killed GM

October 13, 2012
Whitacre: Bosses nearly killed GM
CEO’s memoir blames bad management for automaker’s problems
By DAVID SHEPARDSON / Detroit News Washington Bureau
Ed Whitacre says General Motors nearly died because of bad management.

“The economy didn’t do that to GM. The union didn’t do that to GM. And the Japanese yen certainly didn’t do that to GM — GM’s management did that to GM,” he writes in his forthcoming memoir. “They just never had the smarts or the guts or whatever you want to call it to make a course correction to give GM a shot at a better future.”

Soon after becoming CEO in December 2009, Whitacre spent an hour talking to one very senior executive who tried to “explain to me what he did at GM. And the more he talked, the more nebulous his job sounded. By the time he finished, I came away feeling that this guy really didn’t have anything to do,” Whitacre wrote. “Most troubling to me, none of this seemed to bother him, or even occur to him.”

When Whitacre took over, he worked to simplify the business, eliminated many consultants and scrapped long PowerPoint presentations in favor of oral presentations no more than 10 minutes at board meetings.

Whitacre tapped Mark Reuss, who was candid about the company’s problems, to run GM North America. Whitacre gave Reuss wide authority to oversee marketing, including the power to select a new marketing chief.

“So long as it doesn’t make me throw up, I’ll say OK,” Whitacre told Reuss, who tapped Joel Ewanick to run marketing.

GM’s new board in 2009 initially thought a public offering wasn’t possible until 2011, but moved it up November 2010 after stronger financial results.

GM retained Roger Altman and Felix Rohatyn as advisers on the IPO, and Whitacre pushed the Treasury to sell its entire 61 percent stake at once, which the banks and government rejected as too big.

For months, GM had delayed approving $400 million for a new Ecotec engine as board members asked questions month after month. In early 2010, Whitacre decided to authorize the program rather than bring the team back for another board meeting.

In another example of speedy decisions, Whitacre says he spent 10 minutes hearing a presentation before green-lighting a $100 million venture capital fund for GM to invest in promising technologies.

In one impromptu meeting, Whitacre heard from an engineer who harshly criticized OnStar’s marketing. So Whitacre called Reuss and immediately transferred the engineer to OnStar marketing.

In another meeting, Whitacre — who is 6 feet 4 inches tall — asked engineers to add more leg room to the back seat of pickups. After first saying it wasn’t possible, they eventually squeezed out a few more inches.

Whitacre says the company had forgotten about its most important asset. GM became the world’s largest automaker “because of the people it had working there — they had guts, good ideas and a lot of talent,” Whitacre writes.

“Somewhere along the line, it seemed to me, GM employees forgot how special they are … and how important they are, and always will be, to the success of the company.”

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