Cover Story April 29, 2010, 5:00PM EST

Ed Whitacre's Battle to Save GM from Itself

(page 6 of 6)

At the same time, dealers complained they have to subscribe to an outside service to track the incentives GM is offering on various models. GM gives the dealers that information, but in reports so complex that many dealers have trouble deciphering them.

On Whitacre's orders, Reuss is trying to demystify the process. In March embattled Toyota (TM) spent a company record amount on incentives to lure back wary consumers, offering 0% financing and other discounts. Reuss refused to get pulled in, dropping GM's average incentive from last year by $1,200 a car, to $3,500. GM's market share tumbled to 17.6% in March from 19.4% during January and February. But Reuss kept prices up and beat his sales goals. As March was coming to a close, Whitacre looked at the numbers and said: "This looks like we're headed toward growth in a positive way," Reuss recalls. "That's good."

Whitacre had his prairie charm working in March, when he paid his first visit to a GM assembly plant. At the Malibu factory in Fairfax, Kan., he walked the assembly line in jeans and a plain black sweatshirt, stopping to shake hands with workers and ask them what they did. He even tried to hang a body panel on a Malibu. "They nearly threw me out of the building," he joked later to workers and reporters. One worker said that in 25 years on the line, he had never seen a GM CEO.

Whitacre then held a series of "diagonal slice meetings" with employees from all levels of the factory. Some liked that he didn't come at them with edicts about boosting production. Instead, says Dave Robertson, a 29-year line worker who attended one of the meetings, he just said GM needed to "sell more cars." He told the workers they could help by building quality vehicles, and that if they needed anything, they should say so. "We're all in this together," he said, promising to come back in a month to talk about "the future of the plant."

"He seemed like a country guy," Robertson says. The workers liked him even better when he returned to Fairfax as promised on Apr. 21 to announce that GM had paid off its government loans and would be investing $136 million in the plant, making it the primary factory for the redesigned Malibu.

That bit of news got Whitacre an ovation. He is pouring $3 billion into the plants, enough to keep the United Auto Workers happy for now. If he can just figure out how to sell more cars—returning GM to long-term profitability, growing its market share for the first time since 2002—the workers will be ready to carve his name on the door of GM headquarters. Then Whitacre could look back at his career and say he had gone two-for-two. Until then, he won't be saying much.

Welch is BusinessWeek's Detroit bureau chief.

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