No Surprise: Whitacre Keeps the Top Job at GM

Posted by: David Welch on January 25, 2010

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Finally, General Motors found a new CEO to replace Fritz Henderson, who was fired on Dec. 1. To the surprise of no one, it’s Chairman and CEO Ed Whitacre. Remember that Whitacre took the job the day Henderson was asked to resign on at least an interim basis (though GM never called him the interim CEO) while the company looked for someone new.

Given where GM is right now, bringing some stability can only help. Whitacre may not be a car guy. He will have to prove that he is the man for the job by showing results. Only sales gains and black ink will do that. Any CEO would have to do that. Leaving Whitacre in the job will at least bring stability to a company whose workers have endured almost constant turmoil for the past year.

When it comes to Whitacre’s appointment, there were several things at play. First, Whitacre already built the management team. He hired former Microsoft CFO Chris Liddell to become GM’s CFO. He promoted a slew of GM executives and has recast the organization. He has been so hands-on since he took over about seven weeks ago, that any CEO candidate would come in seeing much of the work had been done, says Maryann Keller, an advisor with auto consulting firm Casesa Shapiro. Any new CEO would want to build the team that he or she must rely on to bring GM back. She brings up a good point. “One thing no CEO would want is Whitacre looking over their shoulder.”

One source familiar with the search said that GM just didn’t have a long list of heavy hitters who also had experience running an industrial giant who could come in and take over. Running GM isn’t easy. The list of qualified candidates is short. The list of people willing to take on the challenge is, no doubt, even shorter.

But the bigger point from the board’s perspective is that they wanted to stabilize the company. Two CEOs were fired last year and the company went through bankruptcy. Many other top managers were sent packing. The people now in the top jobs could breathe a little easier knowing who the boss will be going forward. Now they will know what is expected of them and that the current plan will remain in place.

There is another side benefit. If GM keeps searching for a CEO, then rumor and speculation about possible candidates will keep hitting the papers. The public will keep reading that GM hasn’t stabilized itself yet. The sooner GM gets out of the headlines for hiring, firing and restructuring, the faster the company can start talking about new models and building its brands. That, in the end, is what will turn the company around.

Reader Comments

Wayne

January 25, 2010 8:34 PM

It remains to be seen whether General Motors will survive. The public is very angry about the bailout and the fact that GM has quite a history as I recently read about in 'Crash Course: The American Automobile Industry's Road from Glory to Disaster.' What an illusion GM put out to the public when they had serious internal problems for many years. We never knew.

Amazingoly

January 26, 2010 7:18 AM

Pay us back, and get the government out of the car business - then I may consider buying another General Motors vehicle - not before.

jaderdavila the small shareholder

January 26, 2010 10:31 AM

the old man dodged the ceo position as much as he could. nobody wants to enter history as the one who finally killed GM. but now there's no one else around. if he will reinvent GM it will take very hard decisions. in everyone of them he'll have to lay out people. good luck mr whitacre. i dont envy you.

BobH

January 26, 2010 12:58 PM

"General Motors directors turned to ...Whitacre after finding a lack of top-rank managers with manufacturing backgrounds" Does anybody else find this as scary as I do? This says a lot about the state of American management. Nobody wants to "get his/her hands dirty" with a manufacturing-related job. Everybody wants to go into finance where bonuses for unethical behavior are so high.

Hugo van Randwyck

January 26, 2010 3:05 PM

It is a good idea to get someone from the outside, who wants to speed up change. Let's hope he knows where the opportunities are. Simplifying the business is a good start. Will he give a secret ballot to union members to separate from the UAW and start a new GM-union, even with theame union representatives? This could help the
marketing team in selling vehicles.

jambo

January 26, 2010 3:31 PM

If the director's couldn't find anyone, then they truly are not doomed. They are too scared to make rsdical changes, but that's what GM needs, to have ice water splashed onto their faces. Clearly, they still have their head in the sand, afraid to look up and face the new economic reality. Such losers.

Bill Donohoo

January 26, 2010 9:27 PM

In spite of good to great reviews on the Malibu, I have not seen many on the road. As many have told me, "I want to see if the Mailbu will give me the same long term value as the Accord, Camry and Altima. I just have to wait before I take a chance on the Malibu"

It is awfully difficult to regain the confidence of consumers, especially after its competitors have been so successful for so long.

Husin O'Bama

January 26, 2010 10:26 PM

Whitacre has a new broom to sweep away the dust from the previous CEOs.

charles carlisle

February 16, 2010 1:56 PM

please tell me if general motors is trading..on any exchange,im interested in investing in gm's comeback,,i believe circumstances are excellent for a robust renewal and growth....

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Want the straight scoop on the auto industry? Our man in Detroit David Welch, brings keen observations and provocative perspective on the auto business.

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