Posted by: David Welch on December 30, 2009
General Motors Chairman and CEO Ed Whitacre is putting his stamp all over the company. It hasn’t been a month since the board fired CEO Fritz Henderson and already Whitacre has promoted a handful of executives and brought in three new hires. Today, he named John Montford and Robert Ferguson as his two top lobbyists in Washington. They’re both former AT&T guys, which shouldn’t surprised anyone since Whitacre ran the telecom giant before retiring and later joining GM.
Whitacre is building a team while searching for a new CEO. That raises a big question: How much of management will be Whitacre’s choosing when the future CEO is finally hired? It depends on how long Whitacre keeps the job for himself. But it looks like a lot of the top brass will be his selections. I talked this over with three top executive recruiters, who didn’t want to be named since they have worked for GM in the past. All of them cautioned that the longer Whitacre keeps the job and puts his people in place, the tougher it will be to attract CEO candidates. First, the new CEO will either have to keep Whitacre’s team or initiate yet another round of turnover, thus creating more instability. Second, Whitacre’s activism could lead some candidates to believe that the Chairman will be on their shoulder second guessing their moves, the three recruiters told me.
Just look at Whitacre’s actions so far. Today, he hired two new lobbyists. Last week he grabbed erstwhile Microsoft CFO Christopher Liddell as GM’s Vice Chairman and CFO. A few days after the board fired Henderson on Dec. 1, Whitacre named a new president of GM-North America, a top sales and marketing executive, a boss for GM-Europe and new managers for every brand except Cadillac. This is Whitacre’s management team.
That’s not to say that Whitacre is making the wrong moves. It should come as no surprised that he replaced the leadership of GM’s Washington office. GM had a tough time getting government loans out of Washington. Now-fired CEO Rick Wagoner didn’t do so well late last year when he went to Washington looking for a loan. He made a case that Detroit’s failure would be too damaging to the economy. But Congress asked him for a viability plan and repayment guarantee that he couldn’t furnish. After the initial hearings, GM twice had to submit viability plans before the Obama Administration’s Auto Task Force signed off on it and gave the company and rival Chrysler the money they needed. The government eventually fired Wagoner.
So Whitacre is bringing in his own people. He is shaking things up. That is arguably needed for a company that has been set in its ways for too long. But if Whitacre is serious about hiring a new CEO, he might want to find someone soon so that the new top executive can shape his own team and put his own stamp on the company.