GM drives out chief executive after board pulls support
Chairman Ed Whiteacre to take charge of company until replacement is found
Wednesday 02 December 2009
General Motors, the giant car company controlled by the US government, stunned its staff, dealers and suppliers last night by parting company with its chief executive Fritz Henderson, a 25-year veteran of the company.
Mr Henderson had been installed only in March after the Obama administration pushed the company through bankruptcy proceedings and fired the previous boss, Rick Wagoner, but as chief executive he never fully won the confidence of the board of directors under its assertive new chairman, Ed Whitacre.
In the end, Mr Henderson was fatally undermined when the board voted down his plan to sell GM's European operations, which include the Vauxhall brand, last month. Mr Whitacre clashed publicly with his chief executive about how quickly GM should return to the stock market and finally last week, the Swedish sportscar maker Koenigsegg, pulled out of a deal to buy Saab which Mr Henderson had spent six months negotiating.
Mr Whitacre summoned reporters to a hasty and brief conference call last night to announce that he would take day-to-day charge of the company until a new chief executive was found. There was no statement from Mr Henderson.
"Fritz has done a remarkable job in leading the company through an unprecedented period of challenge and change," the chairman said. "While momentum has been building over the past several months, all involved agree that changes needed to be made... we now need to accelerate our progress, which will also mean a return to profitability and repaying the American and Canadian taxpayers as soon as possible."
Mr Henderson, who celebrated his 61st birthday on Sunday, is the son of a lifelong GM sales manager in the company's Buick division and he joined the company himself as an analyst in its treasury department in 1984. He had been chief financial officer under Mr Wagoner.
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 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. He is only the third person in 70 years to head the company without being a long-standing GM executive.
GM said last night that the decision on Mr Henderson's resignation had been taken by the board alone, and the Obama administration was only informed after the fact. The company also said it would spend just four more weeks talking to potential new buyers for Saab before making a decision on whether to wind up the brand.
The company is now embarking on what it calls an international search for a new chief executive, which could include candidates from outside the car industry, who might be better able to shake up GM's culture. Wall Street analysts have compared GM unfavourably with Ford, which hired Boeing executive Alan Mulally to run the company before the downturn began, and he is credited with keeping Ford – along among the big three Detroit-based manufacturers – out of bankruptcy.
Earlier yesterday, GM reported a fall of 2 per cent in its US vehicle sales in November, compared with the same month last year, though sales of its core Buick, Cadillac, Chevrolet and GMC brands rose. GM executives said despite the sales decline, the company is on better footing than it was late in 2008, with fewer brands and models.
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