GM's Whitacre not finished cleaning house
Three months into the era of Big Ed Whitacre and this much is clear
about his General Motors Co.:
Change isn't coming fast enough for the retired telecom exec-turned-auto
CEO or for GM's active board of directors, and one of the chief reasons
appears to be that there are still too many old GM hands near the top of
the building. So the house cleaning of the executive ranks continues,
however much the corporate spin tries to suggest otherwise.
The latest departure is the inimitable Bob Lutz, the septuagenarian
whose style, influence and knack for effective infighting unleashed GM's
technical know-how and helped make (some of) the General's metal cool
again. At 78, he can retire on his own terms knowing his tenure made
GM's cars and trucks better than they otherwise would have been.
Not sure whether Whitacre will be able to say the same thing. For his
management-by-musical-chairs will either find the right combination of
people and assignments to make GM solidly profitable, or it will project
panic, sow confusion and reap the kinds of internal resentment that
delivers less performance, not more.
Three months after Whitacre ousted Fritz Henderson, the ex-CEO comes
back as a highly paid consultant. Less than three months after Whitacre
made Susan Docherty the U.S. sales and marketing wunderkind, she gets
stripped of half the job because, as one executive explained to me, she
was "getting swamped" by its scope.
Weeks after Whitacre relied on John F. Smith to smooth relations with
European politicians and employees over GM's about-face on its plans for
its Adam Opel GmbH unit in Germany, Smith gets pushed into an early
retirement and the responsibility for managing strategic relationships
falls to GM's jack-of-all-directors, Stephen Girsky.
GM is officially in the drama business -- which couldn't make it look
more different than that other Motown turnaround project in which an
outsider CEO focuses Ford Motor Co.'s long-timer Blue Oval talent on a
cohesive, clearly defined plan and sticks with it.
Whitacre? Not so much, judging by the management churn that has
"short-term tactics" written all over it. Where Ford's Alan Mulally and
his four-point plan is by now the stuff of dull repetition, and where
the results speak for themselves, there's uncertainty about whether
Whitacre has a plan and, if so, what it actually may be.
"There's a hundred ways to run a company," a GM executive who recently
left the company told me, "and he picked one -- just go sell more cars."
If only it were that simple. If only GM didn't have data, as it was
explained to me, suggesting Cadillac doesn't resonate as much as hoped
with folks looking for a car that says they've "made it." Or that the
bailout of GM and the United Auto Workers gives customers a reason to
steer clear of GM showrooms.
If only a flip-side of the global recall scandal rocking rival Toyota
Motor Corp. didn't include the cash-rich Japanese automaker using sales
incentives and cut-rate financing to woo wary customers -- a race GM may
want to avoid but probably cannot as it strives to rebuild its sagging
If only Ford's ability to execute an impressive turnaround didn't stand
as an obvious example that Detroit automakers possess the talent to
compete anywhere in the world, so long as they're led with clarity,
purpose and a commitment to produce world-class vehicles.
"The thing that encourages me is that the official credo of governing
now is, 'design, build and sell the best cars and trucks,'" Lutz told
Automotive News in an interview Wednesday after the Geneva Motor Show.
"The company is on the right track."
Hard to tell at times like these. Lutz, a consultant to Whitacre until
May 1, insists he was not asked to leave. He probably wasn't, chiefly
because Whitacre is smart enough to know he can learn from Lutz -- and
said as much in his obligatory remarks confirming Maximum Bob's looming
This much is clear: The early days of Big Ed's era are all about
distancing the new GM from the past and the people who defined much of
the old GM -- Henderson at the top, Smith in planning, LaNeve in
marketing, Cole in Washington, Young in finance, to name a few --
because the past also was marked by epic failure.
Fair enough. Also clear is that Whitacre is keen to retain the
automotive cred that makes the preponderance of GM's cars and trucks
contenders in key markets around the world. He should, because that's
the whole ballgame.
Sacrificing the continuity of global product development, embodied in
Vice Chairman Tom Stephens, for one, risks derailing the momentum that
helped the automaker survive bankruptcy -- and regaining that mojo takes
a whole 'nother kind of speed GM cannot afford to lose.