Problem of slow changes forces GM chief to step down
By Ken Thomas and Tom Krisher |
December 3, 2009, Thursday
|
Print Edition
Print Edition
THE leader of the new General Motors was done in by an old problem at the largest United States car maker: Change wasn't happening fast enough.
GM's board and CEO Fritz Henderson parted ways on Tuesday, the board upset that the auto maker's turnaround wasn't moving more swiftly and Henderson frustrated with second-guessing, two people close to the former CEO said.
Board Chairman Ed Whitacre Jr, the former head of AT&T Inc, will take over as CEO while a global search is conducted.
It was unclear whether Henderson or the board moved first in the surprise resignation, which came just hours before Henderson was to be the high-profile keynote speaker at the Los Angeles Auto Show. At a hastily called news conference at GM's Detroit headquarters, Whitacre would not answer questions, but said the board and Henderson agreed that he should step down.
Whitacre thanked Henderson, 51, a lifelong GM employee, for his leadership and said the company is on the right path toward offering high-quality cars and trucks worldwide.
"We now need to accelerate our progress toward that goal," the 68-year-old Whitacre said.
Both men were chosen for their jobs by the US government, which owns more than 60 percent of the Detroit auto maker in exchange for giving it billions in loans. But Henderson is a GM insider, while Whitacre is an outsider to the whole industry.
An Obama administration official said on Tuesday in a statement that "this decision was made by the Board of Directors alone. The administration was not involved in the decision."
"I don't think this has much to do with Fritz Henderson's performance, I think it's just the wrong time to be a GM lifer," said Logan Robinson, a former Chrysler attorney and professor of corporate governance at University of Detroit Mercy.
Henderson, who rose through GM's ranks over a 25-year career, took over in March after the government forced out former CEO Rick Wagoner. A few months later, GM entered bankruptcy protection and Henderson led the company through a painful government-led and court-supervised reorganization. The firm emerged from court protection in just 40 days cleansed of massive debt and burdensome contracts that would have sunk it without roughly US$52 billion in federal loans.
The people close to Henderson, who asked not to be named because he has not spoken, said he was frustrated from the start by the board and government push for faster change and questions about his decisions.
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