Ed Whitacre and his board of directors have taken “ownership” of General Motors. It hasn't been pretty.
Let's do a quick “body count.” Fritz Henderson's status went from “hero” to “resigned” in a matter of weeks. Forget that not long ago GM Chairman Whitacre said Henderson “has our unanimous support.” Whitacre has assumed Henderson's CEO position.
Brent Dewar, recently appointed by Henderson as head of the Chevrolet brand was “broomed” and replaced.
Mike Richards, who left Ford to head Buick-GMC, resigned after eight days on the job. Bob Lutz was reassigned and his marketing responsibilities were given to Susan Dochtery.
Lutz is still vice chairman and a special advisor to Whitacre. I presume Lutz will be whispering into whichever of Whitacre's ears Steve Girsky isn't. Girsky, a former Wall Streeter, is a board member and another special advisor to Whitacre.
Docherty had been tapped by Henderson to replace Mark LaNeve, who recently resigned as North America vice president of marketing and advertising.
Ray Young recently announced his resignation as CFO. Mark Reuss, son of ex GM President Lloyd Reuss and known as the “father of the Aztek,” is now the new Whitacre appointee as president of North American Operations.
Whitacre says Reuss and Docherty are “terrific.” Given Whitacre's recent endorsement of Henderson, LaNeve and others, skeptics might be looking for salt shakers. Don't tell me these new appointees are so great after you praised the last group just before showing them the door.
The list of GM executives who have left the company is longer than the names mentioned here. Whitacre and the GM board have brought executive “musical chairs” to a new level.
GM is operating like a privately held company when, in fact, all taxpayers are owners. Churning executives does not breed confidence.
We'd all like some answers to some questions. Such as:
How many of these executive changes were planned? Which of the “retirements” were actually firings?
What do the severance packages look like for these people? Are “gag” agreements included and if so, for what price? What specifically caused the sudden rift between Henderson and the Board? Why did the company reverse Fritz's decision to sell Opel?
Was Fritz blamed for the collapse of the Saab and Saturn deals? Henderson and LaNeve were the public faces of the dealer terminations who misrepresented GM's “savings” before Congress. Were they scapegoats now that GM needs to rebuild its relationships with dealers?
What does Steve Girsky know about anything? Wasn't he a primary driver behind the dealer terminations. Who is the genius who thought it was a good idea to axe hundreds of Cadillac dealers, making many potential buyers have to drive hundreds of miles for sales and service?
How does high throughput per dealer make GM profitable? What has been the government task force role in the recent executive changes?
How does GM expect to maintain U. S. market share of 19% after shedding Saturn, Saab, Hummer, and Pontiac, and cutting hundreds of dealers who represent the brands that GM kept?
What happened to the innovative diesel engine that was being readied for production? Did postponing that program provide money for fired executive packages and to pay off European governments?
The Buick LaCrosse is a great vehicle, but what else does GM have on the way of compelling new vehicles to sell?
Clearly GM not only should answer some questions, it must instill some confidence in American consumers and investors.
You need to give me and a lot of others compelling reasons to buy your stock when IPO time comes around.
Gratuitously firing executives for not getting the results you desire is like George Steinbrenner firing managers for not winning with a bunch of over-priced stiffs.
If Whitacre is so smart, why doesn't he show us how to do it without destroying resale values?
But so far, he hasn't built up a reservoir of trust and faith in potential investors, let alone prospective buyers.
Former auto dealer David Ruggles is active with CyberCalc Arbitrage and Advanced Concepts & Techniques. He is at [email protected].