Z284ever

http://www.businessweek.com/magazine...iscussed_ssi_5









News November 20, 2008, 5:00PM EST
The Man Who Could Run GM
Fritz Henderson, groomed to replace CEO Wagoner, has a strong track record—and a way with unions

Henderson has a history of being thrown into trouble spots and solving problems Adnan Abidi/Reuters

By David Welch



Of the three auto executives begging Congress for a bailout, General Motors Chairman G. Richard Wagoner Jr. looks the most exposed. Politicians have said that a Detroit management shakeup is long overdue, while the commentariat has been crackling with outraged calls for the GM chief's scalp. For weeks, Wagoner said he was staying put—despite presiding over $33.8 billion in losses in the past three years—and GM's board backed him. But after the Washington hearings on Nov. 19, he told reporters that he would step aside if that would help GM get a bailout.

Assuming Wagoner pulls the ripcord, GM would likely promote an insider: heir apparent President and COO Frederick A. "Fritz" Henderson.

Is he the man to fix America's largest carmaker?

Henderson, who has spent half of his 49 years at GM, is a creature of Detroit. Like Wagoner, he hails from the company's finance ranks and is not a "car guy." Henderson, who declined to comment, has largely echoed his boss's assertion that GM's massive restructuring efforts will allow it to bounce back when the economy improves.

"SENSE OF URGENCY"
Then again, Henderson is no Wagoner. Where the boss is measured and aloof, Henderson is fast-talking and direct. He attacks problems with gusto, which is why GM sent him to trouble spots on three continents. "Fritz has a real sense of urgency," says Joseph Phillippi, principal of firm Auto Trends Consulting. "His intensity would be a big plus."

Earlier this decade, Henderson shored up GM's flailing European operations. He needed to cut jobs and came out swinging—announcing 12,000 layoffs even before inking a deal with union bosses. The move sparked a wildcat strike in Germany, but Henderson got his way. He also helped introduce the Chevrolet brand to Eastern Europe. After years of losses, GM Europe made $357 million in 2006 and a small profit last year. (Those gains have deteriorated along with the global economy.)

During a two-year stint in Asia, Henderson simplified GM's brand strategy. The company used to sell Saturn, Chevrolet, and cars from former partners Isuzu, Suzuki, and Subaru in Japan. Henderson focused solely on Chevy. He can't take all the credit, but Chevy is now GM's global brand.

Since returning to Detroit nearly three years ago, Henderson has spent much of his time negotiating with the United Auto Workers. The deal he cut with the union will save GM billions a year. "If it weren't for Fritz and his team," said UAW President Ron Gettelfinger at the time, "this deal would never have come about."

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, assuming he got the post, likely would need government help. It's not clear that, once enthroned, his boldness and clear thinking would be enough. That said, two years ago Henderson told BusinessWeek that "no brand has a God-given right to exist." Imagine Rick Wagoner saying that

jg95z28

I saw that article and was thinking the same thing... who would want the job? (Not now at least.)

guionM

I'm going to make a prediction and remember that I made it first.

Ric Wagoner will announce he's steping aside within the next 2 months if not sooner.

Why?

After the congressional hearings, GM is quickly becoming the poster child of what's wrong in the auto industry.

Ford looks halfway decent because they said they can last till after 2009 while the other 2 all but said they are about to collaspse. Chrysler won big brownie points when Nardelli was the only one to say he's settle for a $1 per year salary in order to secure loans for Chrysler. Wagoner seemed to do alot of double talk, and didn't seem to understand that anything he said about GM's products today would be connected to GM's condition today, and the hearing was all about tomorrow.

Wagoner is in a no win position right now.

He stays on, and unless he pulls off a miracle on December 2nd, GM's not likely to get funding.

If he does stay on, and GM gets it's funding, if he quits or is forced out at any point while GM is under funding guidelines, Wagoner will not get a generous severence package, let alone the pay he's been getting ($23 million if I remember).

I believe he's going to bail while he still can and keep his contract's severence package.

I believe it will happen within the next 2 months.

Again, I said it first.

Z284ever

Oh, I don't think you need a crystal ball to predict Wagoner's fate Guy.

Dragoneye

I don't think he's a bad 'leader', honestly...Many of the positive shifts and changes within the company have been under his direction. The entire restructuring over the past years has been largely his doing...He was responsible for getting GM into China, for hiring Lutz and reviving product, and he's not stupid. But I'm not so niave to think there isn't someone better for the job.

I've been hearing "Fritz for CEO" rumblings for a year, now...This will be interesting to watch...in a sad sort of way.

Good Ph.D

Well, lots of people don't like Wagoner, but unless the bail out comes with a bunch of pink slips how much more effective can he be?

Gripenfelter

GM rejected my resume/application for CEO.

They didn't share my vision of expanding the ZR1 and LS9 into the minivan/SUV/and family sedan line ups.

Plague

You know, I think there is a surprising large niche market there, just as long as you could have minivan and SUV coupes with sticks as well as an LS9. They must also have a sub 13 1/4 mile and weigh under 3500 pounds.

AdioSS

R63 AMG competitor

rlchv70

And cost under $30k.

Caps94ZODG

OMG Buickman must be doing cartwheels in his dealership!! lol

OutsiderIROC-Z

Got my vote.

guionM

Ric Wagoner is a very, very smart guy. He also is concerned and very aware of how the decisions he makes impacts those people who work at GM as well the local economies that depend on GM. Unlike GM executives in the recent past, he freely recognizes he's not a car guy and placed car guys in key product positions and has given freedom to to those guys. He's also, as you point out, the key to GM's expanding in China, now the world's 2nd largest car market. And GM is in a dominant position there now.

GM's products have bounced back strongly. Quality is better, interiors are better, styling is better. But the problem is and always has been in GM's decision making process, which burns up time and runs out the clock till the last minute.

There's been plenty of time to change this. GM's current problems had it's beginings under the last CEO, and Wagoner early on was unfairly blamed. Since then, although I feel he got together a crack product team, and had been good at raising money in difficult situations, I don't think he's been as good changing GM's processes or it's bureaucracy.

That's where I feel he (and GM) has gone wrong.

Big Als Z

Fritz sounds like he will carry Rick's mentality foward, but with his own way of doing things.
I agree that Rick did a good job with what he had to deal with. I think that now with GM having a new direction, a new focus, and an infusion of cash, its time to hand the torch off to Fritzy.
I agree with Guy that the next hurdle for GM is middle management bureaucracy of getting cars through when needed. Faster reaction would give people the perception that GM is a faster and smaller company.

Plague

I always forget some of the important things...