To say former General Motors Co. President and CEO Fritz Henderson would like to put 2009 in his rearview mirror would be an understatement.
When the auto industry witnessed its sharpest and most prolonged downturn in the post-war era, Henderson saw the carnage up close and came under great scrutiny until he lost his job near the end of the year.
“Look,” he exhales, “it's been a tough, tough year,” he said before getting the ax.
After Obama's team ousted Wagoner the last weekend in March, Henderson took the wheel at the old GM with a mandate from the president to shake off billions of dollars of debt and gain big labor concessions from the United Auto Workers union or steer the industrial icon into bankruptcy.
The UAW played ball, but big bond holders did not. Shareholders were wiped out. Factories were shuttered, and thousands of hourly and salaried jobs disappeared. Thousands more employees have, or will, soon lose jobs at dealerships across the nation as GM shrinks its retail footprint.
During the new GM's first financial update, Henderson characterized damages from the 39-day bankruptcy as “substantial, and under no circumstances should be minimized.” If quantified financially, he speculates those damages would reach into “the tens of billions of dollars.”
Washington critics of the government's support to the auto maker suggest the damage is not over, pointing to GM's $1.2 billion loss in its first quarterly financial report released in November. The partisan rhetoric overshadowed news of the auto maker's surprisingly solid cash flow and its plan to reimburse $6.7 billion in taxpayer loans early.
Just days before, a report from the Government Accountability Office speculated taxpayers never would be fully reimbursed for the total $50 billion two presidential administrations extended to GM over the last 11 months.
Who will replace Henderson?
Hyundai Motor America President and CEO John Krafcik, who has guided the Korean auto maker's North American unit to sales and market-share gains despite a record economic downturn, sidesteps questions over his candidacy for the top spot at GM.
“It's very flattering,” he tells Ward's. “It's just hard for me to comment on.”
Krafcik's name surfaced as a possible replacement for Henderson, ousted in Decmeber by the auto maker's newly seated board of directors.
The exact motivation behind Henderson's sudden resignation, some four months after taking GM through bankruptcy, remains unclear. However, it is assumed the board wants fresh thinking from an outsider, and someone who could speed GM's turnaround at an even faster pace than Henderson.
Although GM posted a $1.3 billion loss in its first financial report since emerging from bankruptcy, it surpassed analysts' expectations.
But newly installed Chairman Ed Whitacre, who has assumed the interim-CEO mantle, also wants a dramatic cultural change at GM and likely will look to an outsider not so deeply connected to the “old GM.”
At the same time, Whitacre is thought to be seeking someone with industry experience, and his recent promotions of Mark Reuss to president of GM North America and adding marketing responsibility to U.S. sales chief Susan Docherty shows he likes young, up-and-coming executives.
Krafcik, 48, fits the bill nicely. An engineer educated at Stanford University and the Massachusetts Institute of Technology, he was one of the first hires at NUMMI, GM's former joint venture assembly plant with Toyota Motor Corp. It was there he learned Toyota's vaunted manufacturing practices.
Krafcik joined Ford Motor Co. in 1990, where he held a number of positions, culminating as chief chassis engineer for the auto maker's highly profitable truck lineup.
In 2004, he jumped to Hyundai. The auto maker has witnessed positive results in perception in recent years. Perhaps more remarkably, Hyundai has pushed its U.S. market share from 3% in 2008, to 4.3% this year and seen its sales increase 6.2% despite the industry's 23% decline, according to Ward's data.
Krafcik deflects additional questions about jumping to GM, and instead turns conversation to Hyundai's accomplishments despite its limited manpower and resources.
“We run so lean,” he says. “There are four vice presidents at Hyundai Motor America.”
That sounds exactly like the sort of operation Whitacre wants to build with the new GM.
A recent GM executive to go is Brent Dewar, vice president of the global Chevrolet brand since July and a 31-year veteran of the firm. He retires in April. Until then, Dewar will be on an unspecified special assignment for GM's new North American President Mark Reuss.
Dewar is to be replaced by Jim Campbell, who will take the title of Chevrolet brand manager.
Also losing his job last month is Buick-GMC General Manager Michael Richards — after only nine days on the job.
No new job cuts are coming for GM, Whitacre says in a discussion with the media in his new additional role of CEO as well as chairman.
The nation' largest auto maker has been racked with uncertainty since Henderson was sacked and sweeping upper-management changes were announced.
When asked, Whitacre is succinct: “No plans for new cuts.”
Whitacre also quells fears somewhat that he may be planning on easing out Bob Lutz, the beloved 77-year-old product guru. “We look forward to learning a lot from him…you'll have to ask him when he's going to retire,” Whitacre says.
Additionally, Whitacre says the board is narrowing its search for a new chief financial officer and has found a promising candidate.
Revived negotiations to sell the beleaguered Saab unit are continuing, “with a couple of interested parties” and a self-imposed deadline at the end of the month, he says.
Whitacre also downplays GM's troubles with German politicians and labor unions now that it has decided to keep its Germany-based Opel unit.
Repaying government loans is GM's No.1 priority, followed by getting profitable as soon as possible. While an initial public offering next year also is thought to be a high priority, Whitacre says the timing “is simply when we are ready.”
