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.