Friday, Apr 20, 2018
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Jack Lessenberry

Ouster of CEO opens door for change of culture at GM

DETROIT - For a day, it was the business sensation of the nation: Fritz Henderson ousted as CEO of General Motors, the company he led through bankruptcy reorganization.

What was most shocking was that this came after he had served only eight turbulent months on the job.

So for the first time in history, GM will have had three chief executives in a calendar year: Rick Wagoner, fired by President Obama in March; Mr. Henderson, and now, Edward Whitacre, who became chairman in July.

Mr. Whitacre didn't have a day's experience in the car business before he took over GM. Once that would have been unheard of. Succession to the chairmanship of what was once the world's biggest firm was a process that resembled a dynastic succession. Not anymore.

In fact, you could argue that three chairmen in a year was the least unusual thing to happen to the automaker in 2009: It went bankrupt, got into and out of bankruptcy reorganization in record time, and taxpayers have spent $50 billion trying to keep it alive.

Now, there are indications that a disagreement between Mr. Henderson and the board was about how long to wait before trying to take GM public again.

Incidentally, though nobody's talking, it is clear that Mr. Henderson's sudden departure was anything but voluntary.

Voluntary resignations are not announced at hastily called late-afternoon press conferences.

For those with long memories, what happened smacks of what baseball philosopher Yogi Berra called "dj vu all over again." Think about this: GM was in financial crisis, and needed to do big things, quickly. The firm had installed a new chairman who had spent his entire career at GM, and he had trouble making changes quickly. GM was like a large dysfunctional family.

The new chairman was surrounded by men who had been hired about the same time he was, and it was tough for him to fire or demote them. He was eventually painfully, some said brutally, ousted by a new board chairman, an outsider who knew a lot about business but nothing about cars.

Though this describes what happened to Fritz Henderson, I was actually describing what happened in 1992, when the CEO was Robert Stempel. The board chairman who ousted him was John Smale, of Cincinnati-based Procter & Gamble. Back then, the drama at GM was front-page news. Prior to that crisis, it would have been unthinkable to depose a head of GM.

Today, outside of the Midwest, the ouster of Mr. Henderson was just another business story. But there is another big difference: When Mr. Stempel was forced out, Mr. Smale didn't think of trying to run GM. Instead, the board elevated Jack Smith, another GM lifer.

That isn't likely now.

Mr. Whitacre will run GM for awhile. Then, he may look for someone to change its insular and incestuous culture that was often arrogant and complacent, and delivered failure. Let's hope he succeeds.

After all, one indisputable fact about today's GM is that we own it.

Jack Lessenberry, a member of the journalism faculty at Wayne State University in Detroit and The Blade's ombudsman, writes on issues and people in Michigan.

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