(Editor's note: Last November, BusinessWeek suggested that General Motors President and COO Frederick "Fritz" Henderson may end up replacing GM CEO Richard Wagoner. On Mar. 29, Wagoner resigned and Henderson was given his job. Here's a revised version of that story.)
Is Fritz Henderson the man to fix America's largest carmaker?
Henderson, who has spent half of his 49 years at General Motors (GM), is a creature of Detroit. Like Wagoner, he hails from the company's finance ranks and is not a "car guy." Henderson told reporters on a conference call on Mar. 30 that GM would still prefer to restructure outside of court, according to the Associated Press, but various support mechanisms outlined by President Barack Obama would provide a better cushion to reorganize under bankruptcy if necessary.
Henderson is no Wagoner. Where the boss is measured and aloof, Henderson is fast-talking and direct. He attacks problems with gusto, which is why GM sent him to trouble spots on three continents. "Fritz has a real sense of urgency," says Joseph Phillippi, principal of firm Auto Trends Consulting. "His intensity would be a big plus."
Tours in Europe and Asia
Earlier this decade, Henderson shored up GM's flailing European operations. He needed to cut jobs and came out swinging, announcing 12,000 layoffs even before inking a deal with union bosses. The move sparked a wildcat strike in Germany, but Henderson got his way. He also helped introduce the Chevrolet brand to Eastern Europe. After years of losses, GM Europe made $357 million in 2006 and a small profit in 2007. But those gains have deteriorated along with the global economy. In fact, on Henderson's rÉsumÉ Europe must go down as unfinished business. GM needs to close as many four plants and may even sell half of its Opel subsidiary to the German government.
During a two-year stint in Asia, Henderson simplified GM's brand strategy. The company used to sell Saturn, Chevrolet, and cars from former partners Isuzu, Suzuki, and Subaru in Japan. Henderson focused solely on Chevy. He can't take all the credit, but Chevy is now GM's global brand.
Since returning to Detroit nearly three years ago, Henderson has spent much of his time negotiating with the United Auto Workers. The deal he cut with the union will save GM billions a year. "If it weren't for Fritz and his team," said UAW President Ron Gettelfinger at the time, "this deal would never have come about."
No Sense of Entitlement
A fair question: Who in their right mind would want Wagoner's job? At least three of GM's eight brands must vanish, the UAW will have to be persuaded to give up a lot more, GM's battered image needs to be rebuilt—the list goes on. Henderson will have to pay close attention to the Obama Administration's auto team, which pressured Wagoner to step down and will decide in 60 days whether Henderson has wrung enough costs out of GM to warrant keeping it on the government's lifeline. That said, two years ago Henderson told BusinessWeek that "no brand has a God-given right to exist." Imagine Rick Wagoner saying that.
Welch is BusinessWeek's Detroit bureau chief.