Auto Task Force gives GM 60-40 odds
09-09-2009, 12:06 AM
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Auto Task Force gives GM 60-40 odds
http://www.bloomberg.com/apps/news?p...d=aMcLGP8BugLo
General Motors Co.’s board was told by the Treasury’s auto task force that Chief Executive Officer Fritz Henderson has about a 60 percent chance of fixing the automaker, a person familiar with the briefing said.
Advisers to the federal panel offered that assessment at an Aug. 3 meeting that was closed to management, said the person, who asked not to be identified because the session was private. The aides said the board could improve the odds by being engaged with Henderson and hiring outside executives to help him change GM’s mind-set, according to the person.
The task force’s analysis suggests there will be close board scrutiny of Henderson, a 25-year employee, as he tackles a corporate culture that dragged GM into bankruptcy. Directors were told that GM is too insular, has too little accountability and lacks urgency in decision making, the person said.
“Everybody recognizes that things have to change going forward,” Chairman Ed Whitacre said in an Aug. 27 interview. “Fritz recognizes that. He knows our feelings about the corporate strategy and plan. I think he will succeed.”
Whitacre said in the interview that he recalled the presentation, while declining to discuss details. A GM spokeswoman said today that Whitacre wouldn’t comment further. Henderson declined to comment yesterday when asked about the meeting, which he didn’t attend.
The 90-minute session at GM’s Technical Center in Warren, Michigan, served as a handoff from the federal overseers of the biggest U.S. automaker and was the first since the 13-member board was revamped by the Treasury with 7 new directors led by Whitacre, 67, a former AT&T Inc. CEO and chairman.
Advisers’ Assessment
When the board asked how the task force viewed Henderson’s prospects for a GM turnaround, lead adviser Ron Bloom responded, “Sixty percent yes, 40 percent no, or 40-60, depending on who you ask,” according to a person familiar with the meeting.
“More 60-40,” said another adviser, Harry J. Wilson, who crafted GM’s recovery plan for its U.S.-backed bankruptcy, according to the person.
The GM spokeswoman, Renee Rashid-Merem, reaffirmed Whitacre’s endorsement of Henderson today.
“He and the rest of the board are unanimously backing Fritz and are giving him the support he needs to achieve the goals that have been set forth for the company,” Rashid-Merem said. “Relative to business matters involving the board, or presumed conversations, our board meetings are confidential, and we won’t comment on them.”
No Deadline
The board hasn’t set a deadline for judging Henderson and his team, Whitacre said in the Aug. 27 interview. Directors will meet today and tomorrow in Detroit and may decide whether to sell, keep or close the money-losing Opel unit in Europe, people familiar with the options have said.
Taxpayers have a stake in Detroit-based GM’s fate because the Treasury is the largest shareholder after providing $50 billion in restructuring aid. Henderson, 50, must end losses of $88 billion since 2004 and revive sales amid the weakest U.S. auto market since the 1970s. He took over in March after the task force asked Rick Wagoner to step aside.
Five themes shaped the advisers’ Aug. 3 critique of the largest U.S. automaker, the person said. Besides finding insularity, a need for new blood and lack of accountability and urgency, the task force concluded that managers accept good- enough results instead of demanding excellence, the person said.
The presentation ran about 30 pages, and was introduced by Bloom and led by Wilson and another adviser, David Markowitz, the person said.
The task force isn’t commenting on the meeting, said Meg Reilly, a Treasury spokeswoman. The government’s approach to GM is to encourage “constant discipline in all of GM’s forthcoming decisions by testing assumptions at every juncture,” she said.
‘Unsustainable Position’
“Long-term success requires a fundamental change to the corporate culture that contributed to the unsustainable position GM found itself in just a few months ago,” Reilly said. “We have seen great progress with GM management in approaching new decisions with a more-critical eye.”
President Barack Obama named Bloom as senior adviser for manufacturing policy on Sept. 6. He will continue to direct the auto task force. The “recognition of Mr. Bloom’s work is well deserved,” GM said in a statement.
Henderson and his team can satisfy Whitacre provided they show progress and speed corporate decision making, said James Kahan, a former AT&T executive who worked with the GM chairman for 20 years and remains a friend.
Onus on Management
“On the other hand, if management ignores the board, doesn’t take the board’s concerns as the highest of priorities and doesn’t deliver results, then I assume the board would act on that,” Kahan said. “The onus is on senior management.”
Management accountability hasn’t been valued at GM, the task force said in its presentation to the board.
Poor financial results didn’t bring dismissals, controls were weak, consumers’ wishes weren’t considered and opportunities to win more buyers with brands such as Saturn were missed, the board was told last month, according to the person familiar with the task force’s briefing.
Whitacre said he has been meeting with members of GM’s new executive committee, other employees, dealers, government officials and industry figures outside the automaker, without being specific.
“We have a big job to do here,” Whitacre told select salaried employees in two meetings last week, according to participants. He said in one session that employees should expect changes during the next 12 weeks, a person familiar with that forum said.
Henderson said in an Aug. 31 interview he is moving to reshape GM attitudes at the board’s direction.
[...]
Advertising Overhaul
One area of concern for Whitacre is that GM overhaul its advertising and spend more on its remaining U.S. brands, said people familiar with his views who asked not to be identified because those conversations were private.
Whitacre said spending on advertising will rise “significantly,” while declining to compare the new budget with earlier campaigns. He met in his San Antonio office in late July with Henderson and Vice Chairman Bob Lutz to review advertising and marketing plans before the board’s Aug. 3-4 session.
“What Ed brings to the party is a great appreciation for the role of advertising and communication in the role of changing a company,” Lutz said in an Aug. 13 interview. “He is convinced we need an all-out effort in communication and that we have a limited time window to do it.”
Will to Win
Whitacre wants to win, no matter what the task, said people who know him. That trait was crucial in his selection as chairman by the auto task force, a person familiar with the decision said.
“He’ll give them leeway,” said Kent Hance, a friend and one-time classmate of Whitacre’s who is now chancellor of Texas Tech University in Lubbock, where the engineering school bears Whitacre’s name. “But they’ll need to show what they’re doing.”
Hance, a former U.S. representative, described Whitacre as a leader who inspires respect and a desire to please among his subordinates, along with the recognition that failure won’t be tolerated.
“You don’t want to get on his bad side,” Hance said. “You stay on the good side by working hard and being persistent.”
Advisers to the federal panel offered that assessment at an Aug. 3 meeting that was closed to management, said the person, who asked not to be identified because the session was private. The aides said the board could improve the odds by being engaged with Henderson and hiring outside executives to help him change GM’s mind-set, according to the person.
The task force’s analysis suggests there will be close board scrutiny of Henderson, a 25-year employee, as he tackles a corporate culture that dragged GM into bankruptcy. Directors were told that GM is too insular, has too little accountability and lacks urgency in decision making, the person said.
“Everybody recognizes that things have to change going forward,” Chairman Ed Whitacre said in an Aug. 27 interview. “Fritz recognizes that. He knows our feelings about the corporate strategy and plan. I think he will succeed.”
Whitacre said in the interview that he recalled the presentation, while declining to discuss details. A GM spokeswoman said today that Whitacre wouldn’t comment further. Henderson declined to comment yesterday when asked about the meeting, which he didn’t attend.
The 90-minute session at GM’s Technical Center in Warren, Michigan, served as a handoff from the federal overseers of the biggest U.S. automaker and was the first since the 13-member board was revamped by the Treasury with 7 new directors led by Whitacre, 67, a former AT&T Inc. CEO and chairman.
Advisers’ Assessment
When the board asked how the task force viewed Henderson’s prospects for a GM turnaround, lead adviser Ron Bloom responded, “Sixty percent yes, 40 percent no, or 40-60, depending on who you ask,” according to a person familiar with the meeting.
“More 60-40,” said another adviser, Harry J. Wilson, who crafted GM’s recovery plan for its U.S.-backed bankruptcy, according to the person.
The GM spokeswoman, Renee Rashid-Merem, reaffirmed Whitacre’s endorsement of Henderson today.
“He and the rest of the board are unanimously backing Fritz and are giving him the support he needs to achieve the goals that have been set forth for the company,” Rashid-Merem said. “Relative to business matters involving the board, or presumed conversations, our board meetings are confidential, and we won’t comment on them.”
No Deadline
The board hasn’t set a deadline for judging Henderson and his team, Whitacre said in the Aug. 27 interview. Directors will meet today and tomorrow in Detroit and may decide whether to sell, keep or close the money-losing Opel unit in Europe, people familiar with the options have said.
Taxpayers have a stake in Detroit-based GM’s fate because the Treasury is the largest shareholder after providing $50 billion in restructuring aid. Henderson, 50, must end losses of $88 billion since 2004 and revive sales amid the weakest U.S. auto market since the 1970s. He took over in March after the task force asked Rick Wagoner to step aside.
Five themes shaped the advisers’ Aug. 3 critique of the largest U.S. automaker, the person said. Besides finding insularity, a need for new blood and lack of accountability and urgency, the task force concluded that managers accept good- enough results instead of demanding excellence, the person said.
The presentation ran about 30 pages, and was introduced by Bloom and led by Wilson and another adviser, David Markowitz, the person said.
The task force isn’t commenting on the meeting, said Meg Reilly, a Treasury spokeswoman. The government’s approach to GM is to encourage “constant discipline in all of GM’s forthcoming decisions by testing assumptions at every juncture,” she said.
‘Unsustainable Position’
“Long-term success requires a fundamental change to the corporate culture that contributed to the unsustainable position GM found itself in just a few months ago,” Reilly said. “We have seen great progress with GM management in approaching new decisions with a more-critical eye.”
President Barack Obama named Bloom as senior adviser for manufacturing policy on Sept. 6. He will continue to direct the auto task force. The “recognition of Mr. Bloom’s work is well deserved,” GM said in a statement.
Henderson and his team can satisfy Whitacre provided they show progress and speed corporate decision making, said James Kahan, a former AT&T executive who worked with the GM chairman for 20 years and remains a friend.
Onus on Management
“On the other hand, if management ignores the board, doesn’t take the board’s concerns as the highest of priorities and doesn’t deliver results, then I assume the board would act on that,” Kahan said. “The onus is on senior management.”
Management accountability hasn’t been valued at GM, the task force said in its presentation to the board.
Poor financial results didn’t bring dismissals, controls were weak, consumers’ wishes weren’t considered and opportunities to win more buyers with brands such as Saturn were missed, the board was told last month, according to the person familiar with the task force’s briefing.
Whitacre said he has been meeting with members of GM’s new executive committee, other employees, dealers, government officials and industry figures outside the automaker, without being specific.
“We have a big job to do here,” Whitacre told select salaried employees in two meetings last week, according to participants. He said in one session that employees should expect changes during the next 12 weeks, a person familiar with that forum said.
Henderson said in an Aug. 31 interview he is moving to reshape GM attitudes at the board’s direction.
[...]
Advertising Overhaul
One area of concern for Whitacre is that GM overhaul its advertising and spend more on its remaining U.S. brands, said people familiar with his views who asked not to be identified because those conversations were private.
Whitacre said spending on advertising will rise “significantly,” while declining to compare the new budget with earlier campaigns. He met in his San Antonio office in late July with Henderson and Vice Chairman Bob Lutz to review advertising and marketing plans before the board’s Aug. 3-4 session.
“What Ed brings to the party is a great appreciation for the role of advertising and communication in the role of changing a company,” Lutz said in an Aug. 13 interview. “He is convinced we need an all-out effort in communication and that we have a limited time window to do it.”
Will to Win
Whitacre wants to win, no matter what the task, said people who know him. That trait was crucial in his selection as chairman by the auto task force, a person familiar with the decision said.
“He’ll give them leeway,” said Kent Hance, a friend and one-time classmate of Whitacre’s who is now chancellor of Texas Tech University in Lubbock, where the engineering school bears Whitacre’s name. “But they’ll need to show what they’re doing.”
Hance, a former U.S. representative, described Whitacre as a leader who inspires respect and a desire to please among his subordinates, along with the recognition that failure won’t be tolerated.
“You don’t want to get on his bad side,” Hance said. “You stay on the good side by working hard and being persistent.”
09-09-2009, 01:05 AM
#2
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Join Date: Dec 2002
Location: Charleston, WV
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Assuming the economy recovers...there is no reason for GM not to recover. They seem to have their act together with their new cars. I wonder what the odds on Chrysler are? Chyrlser Defaulted on Loan, Treasury says The "Old Chrysler" is still in trouble 
09-09-2009, 04:53 AM
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Join Date: Mar 2001
Location: The Golden State
Posts: 13,711
There seems to be tendancy on the internet lately to take a published story, then flip it over fit some idea that simply wasn't said. The last one was done on purpose by someone rewriting an article and omitting and adding things.
I think this one was done accidently by misreading or missing key parts of what was being said. Heck, check out the very 1st line in the posted story:
Another article also gives more background on this:
That was not directed at GM, it was directed at Fritz Henderson.
GM's own new Chairman, Ed Witacre also put ALL GM management on notice. This includes the CEO. There is a thread where 100% of members cheered him on when he "layed down the smack" to GM's upper management. The pressure is on.
That 60% confidence in Fritz comes from the fact that all of the members of the GM executive committee are long-time GM executives, the very people who by being in key positions are viewed as having drove the General Motors Corperation into the ground. The general view seems to be that Fritz might succeed. The doubt about him pulling it off is due to being a high ranking member of the Old GM, and formerly part of the culture that doomed GM. A view that many here shared when he 1st became CEO.
The new GM board of directors is the exact opposite of the old rubber stamp BOD GM had before bankruptcy. They are being very aggresive in running the company. They are asking questions. They are empowering the CEO, then holding him (as well as other executives) accountable for results. Comments from soon-to-be-ex CFO Ray Young, who (in a stunning display of tonedeafness) said to the press and analysts that the new GM would " likely would not disclose financial information when it emerged from bankruptcy since it would be a private company".
Putting a headline like "Auto Task Force gives GM 60-40 odds" is misleading, and makes it seem like the Auto Task Force is somehow writing GM off.
That's not the case, and that's not what was meant.
NOBODY said General Motors had a 60% chance of surviving.
It was Fritz that was given a 60% chance of leading that turn around.
Everyone from the CEO to the members of the Board Of Directors has made it very clear that Fritz and the rest of GM's senior management must show results and adopt a new attitude, or their going to be out.
Ask Ray Young.
That's twice this week......Lets start getting it right, please.
I think this one was done accidently by misreading or missing key parts of what was being said. Heck, check out the very 1st line in the posted story:
General Motors Co.’s board was told by the Treasury’s auto task force that Chief Executive Officer Fritz Henderson has about a 60 percent chance of fixing the automaker,
When GM's new board of directors was briefed in early August, one member asked Bloom how he viewed Henderson's ability to lead a GM turnaround. Bloom responded, 60 percent yes and 40 percent no, as did Harry J. Wilson, a former top auto adviser who has since left the auto task force. Bloomberg News first reported the exchange and government officials did not dispute the account.
http://www.detnews.com/article/20090...CFO+likely+out
http://www.detnews.com/article/20090...CFO+likely+out
GM's own new Chairman, Ed Witacre also put ALL GM management on notice. This includes the CEO. There is a thread where 100% of members cheered him on when he "layed down the smack" to GM's upper management. The pressure is on.
That 60% confidence in Fritz comes from the fact that all of the members of the GM executive committee are long-time GM executives, the very people who by being in key positions are viewed as having drove the General Motors Corperation into the ground. The general view seems to be that Fritz might succeed. The doubt about him pulling it off is due to being a high ranking member of the Old GM, and formerly part of the culture that doomed GM. A view that many here shared when he 1st became CEO.
The new GM board of directors is the exact opposite of the old rubber stamp BOD GM had before bankruptcy. They are being very aggresive in running the company. They are asking questions. They are empowering the CEO, then holding him (as well as other executives) accountable for results. Comments from soon-to-be-ex CFO Ray Young, who (in a stunning display of tonedeafness) said to the press and analysts that the new GM would " likely would not disclose financial information when it emerged from bankruptcy since it would be a private company".
Putting a headline like "Auto Task Force gives GM 60-40 odds" is misleading, and makes it seem like the Auto Task Force is somehow writing GM off.
That's not the case, and that's not what was meant.
A week earlier (to last week's blunt meeting with key GM staff), (Ed Whitacre) had told Bloomberg News that Chief Executive Officer Fritz Henderson was the right leader for GM "at this point in time" and said the board had not set a deadline for judging Henderson's success
http://www.freep.com/article/2009090...rocks-GM-execs.
http://www.freep.com/article/2009090...rocks-GM-execs.
It was Fritz that was given a 60% chance of leading that turn around.
Everyone from the CEO to the members of the Board Of Directors has made it very clear that Fritz and the rest of GM's senior management must show results and adopt a new attitude, or their going to be out.
Ask Ray Young.
That's twice this week......Lets start getting it right, please.
Last edited by guionM; 09-09-2009 at 05:19 AM.
09-09-2009, 11:46 AM
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As for what was meant, that's a little more subjective IMO. An indictment of the handpicked CEO is an indictment of the company and its leadership as a whole in most people's eyes. I mean..
Fritz was *THE* guy chosen to lead the GM reorg, therefore the task force, et al either:
- chose the best man for the job
- picked a name out of a hat
If we assume the task force (et al) are rational people, then we assume they chose the best guy for the job.
- the best guy for the job only has a 60% chance of success in 'their' estimation
- It stands to reason that the second best guy will have a lower chance of success
- the third best guy will have an even lower chance of success
Of course, then you get into the issue of whether the task force (et al) even knew how to pick the best guy, which of course begs the question of hw they can predict odds of success if they can't even predict the right guy to lead to success.
So i return to my initial statement then. The leadership picked the CEO, and even they are not confident in him. Especially if fritz fails, how can anyone with a straight face think they will get it right the second time? Therefore, an indictment of the handpicked CEO is an indictment of the company and its leadership as a whole.
09-09-2009, 01:25 PM
#5
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Posts: 1,502
Hey, I wrote the post title, but I certainly wasn't trying to misrepresent the content.
Bull****. I certainly did not do this 
Seriously, **** you.
The article shown here was copy-pasted directly from the link. I simply dropped a few paragraphs to fit into the forum post limits, as indicated by the ellipsis.
Seriously, **** you.The article shown here was copy-pasted directly from the link. I simply dropped a few paragraphs to fit into the forum post limits, as indicated by the ellipsis.
09-09-2009, 02:10 PM
#6
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Join Date: Dec 2002
Location: Charleston, WV
Posts: 1,505
Hey, I wrote the post title, but I certainly wasn't trying to misrepresent the content.
Bull****. I certainly did not do this Seriously, **** you.
The article shown here was copy-pasted directly from the link. I simply dropped a few paragraphs to fit into the forum post limits, as indicated by the ellipsis.
Bull****. I certainly did not do this
Seriously, **** you.The article shown here was copy-pasted directly from the link. I simply dropped a few paragraphs to fit into the forum post limits, as indicated by the ellipsis.
09-09-2009, 02:35 PM
#7
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Join Date: Sep 2002
Location: Oakland, California
Posts: 9,710
Hey, I wrote the post title, but I certainly wasn't trying to misrepresent the content.
Bull****. I certainly did not do this Seriously, **** you.
The article shown here was copy-pasted directly from the link. I simply dropped a few paragraphs to fit into the forum post limits, as indicated by the ellipsis.
Seriously, **** you.The article shown here was copy-pasted directly from the link. I simply dropped a few paragraphs to fit into the forum post limits, as indicated by the ellipsis.
Lighten up flow... you missed the next sentance Guy wrote...
There seems to be tendancy on the internet lately to take a published story, then flip it over fit some idea that simply wasn't said. The last one was done on purpose by someone rewriting an article and omitting and adding things.
I think this one was done accidently by misreading or missing key parts of what was being said.
I think this one was done accidently by misreading or missing key parts of what was being said.
09-09-2009, 05:44 PM
#8
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Location: Roseville, MI, USA
Posts: 1,496
This is a ****ty thread title meant to spur reaction.
And on the topic of Fritz......it's about time somebody said he has a slim chance. He simply stepped into Wagoners spot and didn't even have to "audition" he was simply next in line. Fritz has done nothing to answer serious questions about GM's future.
I'm going to love the Lutz Era of 2010.
And on the topic of Fritz......it's about time somebody said he has a slim chance. He simply stepped into Wagoners spot and didn't even have to "audition" he was simply next in line. Fritz has done nothing to answer serious questions about GM's future.
I'm going to love the Lutz Era of 2010.
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