OK, geniuses, WTF does this mean?

General Motors Co. Chief Executive Officer Fritz Henderson stepped down after running the biggest U.S. automaker for eight months, and Chairman Ed Whitacre took over on an interim basis.

Are there more problems coming from GM? Is this something specific to Fritz Henderson ? Is this a broader economic issue?

What say ye?

Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

85 Responses to “GM Resignation Open Thread”

  1. bergsten says:

    What say ye?

    This ye say, “fix the damn font size BR”– you’ve made the rest of the page “big print book” size!

  2. Les Lofton says:

    He failed to get anything for Saturn, Saab, or Opel. I don’t think he had a clear vision of where to go from here.

  3. patient renter says:

    I’m curious how this sort of thing fits into the “bad news is good news” paradigm.

  4. Dennis says:

    Henderson Said to Flunk Board’s 100-Day Review on Fixing GM
    http://www.bloomberg.com/apps/news?pid=20601087&sid=ayWKfNZ6HmUE&pos=1

    General Motors Co. Chief Executive Officer Fritz Henderson resigned after directors concluded he hadn’t done enough to fix the finances and culture of the biggest U.S. automaker, a person familiar with the matter said.

    The board gave Henderson, 51, a 100-day review today on his performance since GM’s bankruptcy exit, said the person, who asked not to be identified because the discussions were private. While Henderson made progress, it wasn’t enough, said the person, who didn’t have specifics about the evaluation.

    Chairman Ed Whitacre took over on an interim basis, giving the former AT&T Inc. CEO and chairman a chance to put his stamp on GM and pick a permanent chief. Henderson, a 25-year GM employee, became CEO in March when President Barack Obama’s auto task force asked Rick Wagoner to leave as part of a U.S. rescue.

  5. Wes Schott says:

    ..uhhh, he’s having an affair with tiger woods’ wife and the national enquirer is about to go public? nahhh, probably not.

    gm is sinking deeper into the red?

    …but, ah ha -

    A fair question: Who in their right mind would want Wagoner’s job? At least three of GM’s eight brands must vanish, the UAW will have to be persuaded to give up a lot more, GM’s battered image needs to be rebuilt—the list goes on. Henderson will have to pay close attention to the Obama Administration’s auto team, which pressured Wagoner to step down and will decide in 60 days whether Henderson has wrung enough costs out of GM to warrant keeping it on the government’s lifeline. That said, two years ago Henderson told BusinessWeek that “no brand has a God-given right to exist.” Imagine Rick Wagoner saying that

    http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090330_397672.htm

    well at least he lasted longer than 60 days…

  6. willid3 says:

    suspect it was just that 100 day performance review. the interesting question does the new CEO have the same time line and just how will they do? since they haven’t ever run a cart company or any thing remotely like one. i guess it was just a sign to those at the company that performance is expected. even if you have little you can do to really affect it in such a short time. manufacturing companies with fairly complicated products can’t change quickly what they are doing no matter what. just ask Toyota.

  7. Marcus Aurelius says:

    When someone goes into the holy of holies and comes out with a frightened look, their bags packed, and a ticket to parts unknown, it’s best to assume all is not right within.

  8. Mannwich says:

    Why exactly would anyone want this job? They gave ‘ole Fritzy just 5 months. What did they expect in 5 months? The Theater of the Absurd rolls onward.

  9. Mannwich says:

    To Big (and Fucked up) to Fix?

  10. mitchn says:

    Henderson is just another GM “lifer” (read: clueless manager). He and his kind have studiously ignored reality for more than thirty years. I can’t imagine he was willing to change his stripes, and I’d be willing to bet that “Easy” Ed Whiteacre had grown tired of his excuses and ass-covering.

  11. Horst says:

    Henderson was sent packing because Obama’s team is going to need a scape goat. They’re smart enough to see that North American auto sales are going to be flat next year, and they will need someone to point the finger at when the losses keep piling up quarter after quarter. They needed to make this move just to buy some more time, they hope.

  12. philipat says:

    I think they expected, and had a right to expect, a comprehensive plan for change from a new beginning. It’s clear that Henderson was mired in the old GM culture, and culture is the most difficult thing to change in nay Organisation in my experience. Change can only happen top down. GM needs to bring in a new senior management team which is not carrying any baggage from the old GM and able to look at the big picture (Apologies to BP).

  13. JasRas says:

    It’s a pattern… if the govt has their fingers in your business because they saved your ass, they are on you and running things. If anyone believes Obama’s we don’t want to run an auto business, raise your hands. Anyone? Anyone?

    So, in the past few months, a banker, an insurance man, and an auto man–all knee deep in government “assistance” have eithered bowed out, tried to bow out, or has been vocal about bowing out.

    Maybe it is a matter of being careful for what you wish for, because evidently wishing to be saved from moral hazard is very costly…

  14. Mannwich says:

    @philipat: Good points, but perhaps GM is un-fixable and well beyond redemption? Seems to be the theme on a lot of things in this country these days.

  15. dan in michigan says:

    Let me guess. When Rahm Emanuel, who majored in ballet at Sarah Lawrence, left the Clinton administration, he got a job as an investment banker at Lazard. There he did a deal with a spinoff from Ameritech to private equity where they doubled their money in no time. Made something like 500 million. Rahm’s cut said to be 18 million or so. Pretty good for two years work as basically an associate. Wonder who did such a shitty job for the shareholders of Ameritech? Oh yeah, it was Ed Whitacre, CEO of Ameritech. The administration brought him in as Chairman. Besides the government owning most of GM equity, the unions will call the shots from here on in. Pure power play.
    P.S. I am playing fast and loose with numbers and timelines, but I think this is pretty close to correct. Don’t feel like looking it all up, going from memory.

  16. bsneath says:

    It is possible that Whiteacre is a megalomaniac and Fritz just threw in the towel. With no replacement in mind, my guess is Henderson quit for some reason. Doesn’t bode well for GM though either way.

    Bad Idea Dept.: AT&T’s Ed Whitacre to run General Motors
    Posted by Mitch Ratcliffe @ 10:46 pm

    http://blogs.zdnet.com/Ratcliffe/?p=409

  17. Pat G. says:

    Like “Les” said; he failed to seal the deals. And I like “mitchn’s” point as Henderson was/is part of the Big 3 “culture”. But no one mentioned how the vehicles coming from abroad are eating their lunch in quality and backing it with worthwhile warranties. That is the longer term problem as I see it. Fix that…

  18. alfred e says:

    Yeah. Whitacre ain’t gonna do anything but suck up to gov. How innovative do you have to be to run a telco? SWBell prospered primarily because they stuck to their stodgy old knitting, stashing the cash in coffee cans until the other telcos went broke trying the information age revolution crap. Remember the Phone company computer stores? Apple they weren’t. Nor Steven Jobs.

    Maybe that’s what GM needs. Get out of finance and into making cars the old fashioned way. And skip the green car hype unless the gov or DoD funds the stuff.

  19. fatplant says:

    One of my pals got in-depth face time with the new management team at Chrysler. Of Fiat’s Sergio Marchionne one of their most talented execs said “He’s amazing. In 30 days he figured out who all the a**holes were and fired them.”

    Same needs to be done at GM, but then who would run the place?

  20. Mannwich says:

    Until car prices come down, nothing will change. They could prop up Lee Iacocca himself and it wouldn’t matter. The same can be said for many other industries as well but the auto industry is the worst (higher education and health care costs running a close second and third in terms of overpriced goods…).

  21. bergsten says:

    Maybe somebody finally told hm he had to move to Detroit?

  22. Crabbybill says:

    It appears that Whitacre has a plan and Henderson obviously was not part of it. Whitacre has probably already contacted his choices for the team and it’s wired–except for the wildcard of pay $/gov’t approval. As creative as the number machine was at the old GM, I think the new game will take the leverage and finance gimmicks to new heights. The end will be at hand when Whitacre makes an offer to buy F.

  23. Mannwich says:

    @bergsten: Cheap housing could have been a draw though?

  24. Mannwich says:

    Maybe GM should hire Jack Welch so they can learn a thing or two about how to build a Ponzi house of cards the proper way.

  25. Wes Schott says:

    manny @ 8:51 –

    exactly my thought,

    you beat me to the punch,

    but really, he ain’t buyin’ in that part of town

  26. Mannwich says:

    @Wes: It would still be “cheap” on a relative basis though.

  27. Mannwich says:

    …and I forgot housing in my list of “overpriced goods”. Yes, in most places, it’s STILL overpriced.

  28. notsofastfriend says:

    I think there’s a little Wiggle room here…

    http://www.youtube.com/watch?v=7M6H_Rq7dWQ&feature=related

    Honestly!

  29. Pat G. says:

    @ Wes

    For a couple million you could buy a huge “part of town”. Of course, you would require security out the ass which would cost you.

  30. Mannwich says:

    @Pat G: He could have bought the old Silverdome for just under $600K and renovated it. Now that would be a sweet pad. Granted, the surroundings don’t look all that appealing but the dome doesn’t have any windows, so who cares?

  31. Mannwich says:

    @notsofastfriend: LOL. Perfect.

  32. hue says:

    dan in meecheegan, memory is better when it fits your meme. facts could ruin a theme.

    Fritz is quitting to run for Congress, then he can help solve all of our problems. its palinesque, going macro.
    or he’s thinking about running a newspaper/media organization, presiding over another death spiral.

  33. wunsacon says:

    Bergsten, that reminds of the last time someone was ordered there:

    http://www.youtube.com/watch?v=bVDDYQlmq0w

  34. TakBak04 says:

    Les Lofton Says:
    December 1st, 2009 at 7:52 pm

    He failed to get anything for Saturn, Saab, or Opel. I don’t think he had a clear vision of where to go from here.

    ———
    Probably as “simply put” as what Les Lofton says…but, nuanced more by the other posts here for what else might be the factors.

    It’s very strange…and the Presser from GM about his leaving on CNBC was even more strange. Almost made it sound like he was leaving under bad circumstances that they booted him out the door when Bartiromo said: “He was scheduled to appear on CNBC tomorrow morning…so what’s up with this?”

    Indeed, what’s up with that? I guess it will leak it’s way out in the coming days. Until then…maybe “Les” has the first view…that the guy just “didn’t perform.”

  35. Pat G. says:

    @ Manny

    Somebody took a bath in that sale.

  36. Mannwich says:

    @Pat G: The city of Pontiac did (of course).

  37. Pat G. says:

    Now that I think about it, Pontiac sold bonds. So it was serf financed. That figures…

  38. Mannwich says:

    @Pat G: Exactly my point.

  39. Pat G. says:

    We agree…

  40. Pat G. says:

    UNC vs Mich St (battle of last year’s NCAA Championship game) on ESPN now.

  41. Wes Schott says:

    @Manny-

    can you imagine the utility bills?

    it seems so bizarre that the silver dome was sold so cheap

    and, so who takes it on the chin – who financed this thingy – bud adams moved from houston to tennessee because we wouldn’t, not that we didn’t help out the more connected/likeable owners – just more debt to write down…………………………………………

  42. schmoo says:

    sell, Mortimer, sell.

  43. Mannwich says:

    @Wes: You and I are on the same page there. Was thinking the exact same thing. Sounds like a stimulus project to me or maybe someone could build the biggest wood burning stove to heat it? We have one in our house and I love it. Of course my house is just a tad smaller than the Silverdome.

  44. Wes Schott says:

    sell to who?

  45. dan in michigan says:

    Hue,
    Look it up then tell me I’m wrong.

  46. bergsten says:

    @wunsacon — very cute and appropriate clip!

    BTW, your link (www.unknownliberal.org) seems to be broken.

  47. gloppie says:

    Here’s what it means;
    the crooks are getting fucking desperate everywhere.
    If the whole thing doesn’t crater 1st quarter of 2010 I’ll eat my hat.
    Bon Appetit !

    PS: I’m no genius.

  48. Wes Schott says:

    @wunsacon-

    “…take him to detroit”

    “aaaaaaahhhhhhhhhhhhhh”

    funny, funny, funny

  49. notsofastfriend says:

    Seriously. Most folks don’t support Gov’t interference… Hence Ford sales up and GM & Chrysler down. The same will happen to CITI, GS, BAC & JPM (and GE & Berkshire too)once the dust settles. Enough with the propping up of failure… Including the Republicans & Democrats. PS. The best thing Ford could do is provide low maintenance, high quality KISS cars.

  50. notsofastfriend says:

    Mannwich Says:

    December 1st, 2009 at 9:01 pm
    @notsofastfriend: LOL. Perfect.

    Friend, that was my laugh of the day as I was pasting it! And feel much better now…

  51. wally says:

    Can GM be fixed? No, not unless you make it into not-GM.

  52. hue says:

    dude, i don’t care if you’re right or wrong. it’s your theme that you don’t bother to look up, substantiate. and you want me to research it for you?

    the gov’t only interfered when companies came for bailouts. if the gov’t really wanted to run companies, i think it would go after Apple or Google, why waste running insolvent companies.

  53. DiggidyDan says:

    Round 2, FIGHT!
    Haaayoooooooken!

  54. Mike Walsh says:

    According to the Huffington Post, Henderson’s daughter posted an F bomb comment on Facebook saying Fritz was canned. http://www.huffingtonpost.com/2009/12/01/did-gm-ceo-fritz-henderso_n_376229.html

  55. kmckellop says:

    I think the Repo Man is just around the corner. Soon GM will be sliced into pieces.

    Remember…As GM Goes, So Goes the Nation.

  56. dan in michigan says:

    Dude? You see any UAW or SEIU at Apple and Google? Get a spell checker.

  57. Transor Z says:

    I heard ol’ Fritz got caught on video in a compromising position with some serious foot fetish action going on:

    http://www.youtube.com/watch?v=e28lVDLhcGQ

  58. Mannwich says:

    @Tranzor: LOL. Wow, where did you find that?

  59. holulu says:

    Barry:

    It means buy gold, food and amo.

    Also, it means we (as a nation) are fucked.

  60. hue says:

    you got me there dan, no auto workers at Google or Apple, go figure. not only that i can’t spell, i’m also fat and ugly.

  61. Wes Schott says:

    TZ-

    that is one horny freakin’ turtle

    with an outsized schlong

    …err…hairy wanger

  62. John from Concord says:

    It means the board is tired of all the flailing and they want their own Mulally, now. Seems awfully damned obvious from here.

  63. Transor Z says:

    I posted that video on another open thread about 6 months ago. Never gets old.

  64. TerryC says:

    It means that if Uncle Ed does what he did at Southwestern Bell, soon GM will be the only car company in America when they buy up everybody else.

  65. HarryWanger says:

    In my mind, it means things aren’t going so well at the new GM. In the market’s eyes, judging by the futures, must mean a new leader will come in and take GM to new heights of prosperity. The market seems to thin that way about everything these days.

    Been in Mpls for business since Sunday – a whole week here. No time to look at the markets much. As usual, in the macro environment tons of odd things are happening out there that most economic “press” is not covering. BTW: Was there a Black Friday/Cyber Monday event recently? Never know by the lack of excitement from the mundane results. Played that down nicely.

    Mpls is always a mystery to me. Seems that everywhere I went this evening had a line to get in. Seems so odd. This is our biggest retail event of the year this coming weekend, I’ll get a really good first hand look into the discretionary consumer spending arena and let you all know what i saw.

    Mannwich: No Broder’s tonight but certainly trying for Thursday.

  66. Are there more problems coming from GM? Is this something specific to Fritz Henderson ? Is this a broader economic issue?

    I hear the web page redesign isn’t going so well

  67. Mike D says:

    I would have to say that Fritz didn’t learn it was time to close the executive dining room. Those stodgy, self-loving auto executives just can’t imagine walking into a cafeteria and carrying their own tray. There is no hope for them. Hmmm, I wonder if Ford still has the executive dining room? Probably, old habits die hard.

  68. Hey You says:

    Apparently Government Motors didn’t like the way Fritz was re arranging the deck chairs on the good ship Titanic er, GM.

  69. Movie Guy says:

    Glad I already bought two new Suburbans and a Tahoe. Appears that I will buying some spare parts and major components just in case the new board screws up everything.

  70. flipspiceland says:

    Henderson : GM :: King’s Men : Humpty Dumpty.

  71. O2 says:

    GM is a stupid company run by stupid people that makes stupid cars. (Eloquent, I know.) Their bankruptcy only served to punctuate their incompetence.

    Why would anyone want to buy a product made by an incompetent company?

    The bungled deals with Saturn and Opel show that nothing has changed.

    Just like they re-badge their cars and hope that nobody notices that they are selling the same bucket of sh!t under 4 different brands (e.g. Chevrolet TrailBlazer, GMC Envoy, Isuzu Ascender, and Saab 9-7X) their effort to re-badge their CEO will prove futile.

  72. mathman says:

    All GM has to do is produce an affordable line of electric cars and they’d be on solid footing, make tons of money, pay back the gov and become independent again. Unfortunately i think the Chinese are going to beat us to that too (like the environmental leadership they’re showing over there – out of necessity, mind you, after years of ignoring it).

  73. flipspiceland says:

    Any group of individuals who have managed to build a company that had $280 Billion dollars in ANNUAL sales and couldn’t manage to eke out even One dollar of profit do not deserve to be employed.

    An organization that inept, corrupt, nepotistic is not too big to fail. Failure was in fact built in as an integral part of the “GM culture” as sure as one of their crumby door hinges is built into the frame.

  74. doug says:

    My only question: How much did he make for the 8 months work?

  75. it’s all about optics. Now they can honestly say, with a straight face, GM is no longer on the Fritz

  76. arcticpup says:

    A canadian developer (from Toronto) purchased the silver dome, for less than $500,000.

  77. deanscamaro says:

    Its just apparent that the key is Whitacre. He is the “kick ass and take names” type of guy that is needed. He gave Henderson some time to prove what he was made of and he came up short. Kick his ass out and start driving some meaningful change. There’s not enough of these real managers around anymore. Most are mamby-pamby, suck up types who can’t make the real decisions. Hopefully Whitacre will be in the interim-CEO position long enough to either get the real, needed changes made or brings in his doppleganger to fill the slot who can do it.

  78. Robert M says:

    In 1993 IBM named Louis V. Gerstner,RJR Nabisco head as chairman. He was a marketeer whom knew little about the techonology side and was known for recognizing business opportunites and pushing them to profitablity. IBM went from being a hardware company to a services company that sold hardware. Isn’t what GM need is a lifestyle seller whom markets cars?

  79. carleric says:

    The only salvation for this company is to get rid of all the “old” embedded management and go outside of the Detroit carmaker mentality to find tough, clearminded executives. They could start by removing financial types from any input into building cars. For too many years, GM built “large boats” because margins were better, fixed costs were better absorbed, etc. Accountants know the cost of everything and the value of nothing and look where letting them enter the decision making process got GM. I think the company should jsut fold but as long as we are on the hook to the UAW a new approach would seem warranted.

  80. Darmah says:

    I agree with much of this regarding culture, but

    carleric @ 11:31 pretty much sums it up for me. Look at Roger Smith and Murphy before him. They were only interested in profits. They couldn’t / wouldn’t compete on the car side, and instead gave us SUVs and pickup trucks. (It was all consumer demand, don’t ya know — yeah, right.) They were amply aided by a congress that froze mileage requirements year after year. And sorry, I don’t buy the unions are at fault. Management runs the company, sets the agenda, tone and direction of the company.

  81. flipspiceland says:

    @Darmah:

    The unions have no fault in this mess? Managment runs the company?

    Both Union and Management bear responsibility for the travails of the auto industry and any other where this adversarial relationship basically tell the stockholders to stick it.

    That’s as kindly as I can put it without personal attacks on your sense of who’s to blame.

  82. dsawy says:

    The US auto companies need to look at Cat as a successful model of how to deal with the UAW. Cat’s management stood up to the UAW in the 90′s, said “no” when the UAW asked for too much, and has been more prosperous for doing so. The UAW is still at Cat, but Cat’s management isn’t a push-over.

    What GM needs is to broom out a lot of bad/inept/incompetent management, flatted the corporate org chart and quit pissing money down ratholes., such as electric cars. Get rid of the distractions of “brand loyalty” BS from the 50′s, cut the branding BS in advertising and start making good, functional cars that meet actual needs of the consumer.

    But as it is, very little of that will actually happen, and GM is merely marking time before they exceed the tolerance of all but a few wingnut liberal UAW-supported Congressclowns. At that time, they’ll be defunded by Uncle Sugar, broken up and sold off to various other auto companies, much as Chrysler has been.

  83. willid3 says:

    http://baselinescenario.com/2009/12/02/never-a-good-sign/#more-5635

    now looking for a super star CEO.

    which means a super sized salary too.

    but won’t mean better results.

    GM’s biggest problem was allowing the accountants to run a company that is based on products sold to consumers. that means make products consumers will buy for a reasonable price, not make products as cheaply as possible, which leads to lack luster products, and having to ‘buy’ sales using incentives (not that the auto industry hasn’t taught the customer to look for this. or that customers haven’t always bought on price in some cases). but consider Toyota. they have some of the same issues too. but they have that quality thing down pat (and have lots of public perception capital of that too to boot)

    and consider that if you bought a German or Japanese car made in Germany or Japan, the odds are about 99+% that it was made by a union worker. And that German auto worker is the highest paid in the world by far.

  84. Gatsby says:

    This was probably the plan from the start. Kick out Wagoner, pop Fritz in until they could find an outsider as per Ford.

    Just my thoughts. If I am right we will probably see a new CEO within two weeks.

    We’ll see.