I am not talking, by the way, about President Obama’s decision to fire his predecessor, Rick Wagoner, in March. That was a once-in-history sort of thing. If nothing else, somebody had to take the fall in return for an emergency transfusion of $50 billion taxpayer dollars to a mismanaged and soon-to-be bankrupt corporation.
Sports fans will tell you that the odds are that if the Detroit Tigers once again blow the chance to get into the playoffs next year, manager Jim Leyland is likely to be gone.
But Fritz Henderson‘s sudden departure is something else entirely. By the way, though nobody is talking on the record, it is reasonable to assume this was not a voluntary resignation.
Voluntary resignations are not announced at hastily called press conferences a day before the person quitting is supposed to give a major speech. No. Henderson was made to walk the plank. But think about this: General Motors was in financial crisis and needed to do big things - quickly and dramatically.
The CEO was new at the top job, but had spent his entire career at GM. He was having trouble making changes fast enough.
General Motors was like a family. The CEO was surrounded by men who had been hired at around the same time he was. They had come up through the ranks together.
It was tough for him to fire or demote men - and they were virtually all men - with whom he had worked for decades.
Eventually, he was painfully ousted by a board chairman who was an outsider who knew a lot about business but nothing about cars. You may think I have just described what happened to Fritz Henderson, and it fits. But I was actually thinking of another situation almost eighteen years ago. Then, the chairman was Bob Stempel.
The board chairman who ousted him was John Smale, of Procter and Gamble. And those events were even more sensational in Detroit than what happened this week.
Back when I was growing up, being CEO of General Motors was sort of like being Pope. The College of Cardinals doesn’t call Popes in and fire them when things look shaky.
Popes leave office when they die. The men who led the world’s biggest car corporation eventually retired, but they did so on their own timetable. GM chairmen left when they felt like it.
That is, until Bob Stempel. This year, Rick Wagoner and Fritz Henderson shared his fate. But there is one big difference.
When Stempel was forced out, John Smale didn’t try to run the company himself. The board elevated Jack Smith, another GM lifer, a man similar to Fritz Henderson in many ways.
That’s not likely this time. Board chairman Edward Whitacre, a tough-as-nails phone company executive, is going to run GM himself for a while, and then look for someone in his own image to change the nature of the insular and failed culture at General Motors.
America’s taxpayers need to hope he succeeds. Michigan’s economy partly depends on it, for one thing. For another, the taxpayers have bet fifty billion that GM can make it.
This is one gamble we really can’t afford to lose.
No, you have it wrong. We gave (not gambled) those billions to GM, and we are not getting the money back, whether or not New GM makes it. And New GM is not hiring back all their old workers, and New GM is never getting back market share. The bad bet was giving them the billions in the first place. They were not too big to fail. They were too big and too arrogant and too complacent and too calcified to live. So we gave them fifty billion and they croaked anyway. The bet was not a bet and we do not still have a chance of "winning."
Posted by: Jeff Salisbury | December 07, 2009 at 04:37 PM