With the “resignation” of Fritz Henderson, it might lead some to believe that GM is rudderless, wandering the automotive landscape without an real direction. I’m not sure that Henderson was truly in charge of GM. While his knowledge of the company, and what did (and did not) have value was useful during the bankrupcty, he didn’t seem to have the makings of the type of person needed to lead GM for the next few years. In the interim, GM is being led by a “deal guy” in the form of Ed Whitacre, and a “car guy” with Bob Lutz. GM isn’t rudderless, but it is lacking someone who will truly take the wheel and lead the company in the right direction.
GM requires someone who can formulate and articulate a vision, rally the troops in the stated direction, shake up the complacency that still persists in GM, and get them to execute the plan. Henderson really didn’t have this. While styled by some as “Mr. Fixit”, Henderson’s only real accomplishment was being able to review the GM assets (and know what the assets were), and identify the ones most valuable to the organization during bankruptcy. He didn’t seem capable of any actual execution. The product plans were in place prior to his arrival, and Bob Lutz seemed to have more to do with deciding what products stayed and what went.
There were 4 things that Fritz Henderson needed to deliver, and he wasn’t able to make 3 of them work. He was tasked with getting rid of Opel, but when a deal was eventually within reach, the board overrode the decision and decided to keep Opel. The deal for Saab fell apart. The deal for Saturn came to nothing. The only deal that is still alive is the sale of Hummer, and even that isn’t a sure thing.
The Opel fiasco may not have been 100% Henderson’s fault. What isn’t clear is if the Opel deal as envisioned was supported by the board initially or not. It may have been that the board had certain conditions, and the deal that Fritz put together failed to meet those conditions. The board may have simply said “give it a try”, but didn’t provide any sort of goals or minimum standards for the deal. Either way, Henderson and the board disagreed with Fritz about the deal in some way, and it appears Fritz didn’t truly see eye-to-eye with the board.
The deals for Saab and Saturn have a different perspective. At this point, it appears the board truly does not want to keep either brand. The process for winding down Saturn continues, and there is a deadline for a new Saab deal before the wind-down begins for it. What appears to have happened is that Fritz sold both deals to the board as “sure things” (or very close to being such). When the two deals fell apart, it would have undermined whatever faith the board had in Henderson, and further increasing the chances they were going to encourage him to leave.
The end result, fair or not, is that Fritz Henderson has resigned, allowing him to present the appearance that he had some control over that outcome. I suspect that the reality is rather different, and that if he hadn’t resigned, the board was going to force him out anyways. Being under close government scrutiny, the chance of any kind of meaningful golden parachute was likely small. Any GM stock he might have received is impossible to sell (since GM is currently not publicly traded). The board’s ability to give him cash would be very, very limited. By having him resign, the decision looks mutual, and again, Fritz can at least say it was his choice in the end.
In the mean time, GM is now being led by Ed Whitacre and Bob Lutz. Bob is a “car guy” in the old-school sense, and while he may appear unpolished, the man has an intuitive sense of what is “right” on the car side. Ed is not a car guy, but he is a deal guy, having guided SBC Communications through a number of mergers and acquisitions. Having someone deal oriented may be the only way to get something done with Saab, given the 30 day deadline the board has imposed on any Saab deal. If nothing else, he may get something started that will allow the board to relax the deadline to let something take place.
This leadership arrangement is fine for the short term, and will probably work adequately for the next year. But GM will need to find someone new, that is acceptable to the board, and that is not currently a GM employee. GM needs to be shaken up. In the past few months, it seems to be slipping back into the complacent and arrogant form of GM that got it in trouble in the first place. The product side is heading in the right direction. GM needs someone to keep it going in the right direction, to simplify and shorten the decision making process, and start to think hard about “what’s next”. They need a leader who knows how to create a vision, build a plan from that vision, and execute it, while reworking the GM culture from top to bottom to be truly competitive. Without that, GM will wander again, and the next time I suspect it will end up wrecked on the shoals, and the next bankruptcy will be Chapter 7 liquidation, not Chapter 11 reorganization.