GM chairman looks to assert group as a global player
Long-term aims unveiled in speech which may reveal signs of internal tensions
Thursday 12 November 2009
Fritz Henderson, appointed chief executive of General Motors in the spring after 25 years with the company, is coming under intense public pressure from his new boss, chairman Ed Whitacre.
Mr Whitacre, a telecoms industry veteran who turned AT&T into the largest carrier in the US, was lured out of retirement to head GM, and his public remarks are being parsed in Detroit for signs about Mr Henderson's long-term future with the company.
In a round of interviews and a speech on Tuesday, Mr Whitacre continued to hold his chief executive's feet to the fire. Mr Henderson, promoted from chief operating officer when the Obama administration fired Rick Wagoner, is "under a lot of pressure," Mr Whitacre told Bloomberg. "He handles it well. He's carrying a big load."
In the latest signs of faultlines between the two men, Mr Whitacre emphasised the need to pay back money borrowed from the taxpayer before moving ahead with a flotation of the new General Motors. The company was restructured in bankruptcy court this year, emerging with the US government as majority shareholder, and Mr Henderson had suggested an initial public offering next year that could reduce the government's stake.
The chairman, who was brought in by the administration after GM emerged from bankruptcy, has also been pressuring managers to focus on repairing market share as a longer-term means of restoring profitability, rather than simply thinking about short-term cuts. As a result, Mr Henderson's tortuous negotiations over the sale of Opel and Vauxhall in Europe were ripped up by the board last week, when it voted to retain the two brands instead. "How could you be a global player and not play all over the globe?" Mr Whitacre said. "Our financial fortunes had improved enough that we re-examined that."
Mr Whitacre said he did not initially want to lead GM, but changed his mind after assurances the government would not seek to micro-manage the company. He became only the third person in 70 years to head the company without being a long-standing GM executive.
Since joining GM, however, he has inserted himself visibly into its efforts to portray a new face to shareholders, employees and consumers. He is personally fronting the latest GM television advertising campaign, highlighting areas where some of its brands compare favourably with the Asian manufacturers traditionally seen by consumers as being more reliable. "May the best car win," is his slogan.
Critics should be "pleasantly surprised" with GM's financial results this month, the chairman said, without giving details. With the first monthly sales gain in October since January 2008 and an improving economy, repayments may start soon on some of its $50bn (£30bn) in US bankruptcy aid, he said. A stock offering has become more problematic since the government's General Accounting Office said it did not believe the taxpayer's stake would ever be as much as was paid for it. GM's market capitalisation would have to leap to $67bn, even more than its peak in 2000.
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