General Motors Zombie Watch 10: Fritz Henderson Must, Uh, Go

So how long before New GM fires Uncle Fritz? In the most pragmatic of all possible worlds, where the Presidential Task Force on Automobiles (PTFOA) looked out for the taxpayers’ $50 billion as if it were their own—Fritz wouldn’t even BE GM’s CEO. Henderson would have been defenestrated along with Rick Wagoner. You know: the ex-CEO who groomed Henderson as his replacement. (How hard is it to connect those dots?) Henderson has assured his place in The Peter Principle Hall of Fame, capping his career as the PTFOA’s toady. And now, best case, he should follow Old GM onto the scrap heap of history. Not a chance.

The fact that Henderson wasn’t terminated with extreme prejudice the moment the United States government assumed complete control of General Motors tells us that Uncle Fritz is no Richard Nixon; the PTFOA will have Henderson to kick around some more. I repeat: the man’s a patsy.

Fritz didn’t decide to kill thousands of GM dealers. Fritz didn’t decide which GM brands to keep. Why would he? They’re family. White collar cull? Heaven forfend! We’ll use attrition. Mr. Henderson, it’s Congressman Barney Frank on the other line, asking for a stay of execution for a GM parts distribution facility in his constituency. Mary, why didn’t you forward this to the PTFOA? If I told you once—Barney! Hi! What’s that? I’ll check. Rest assured, I feel your pain. [Joke deleted].

Anyone harboring illusions that Uncle Fritz is large and in charge should note: Henderson didn’t take the stand and tell federal bankruptcy court that New GM had to be created by July 10—or die. It was Harry J. Wilson, a heretofore unknown member of the PTFOA. “We have no intention to further fund this company if the sale order is not entered by July 10,” Mr. Wilson told Judge Gerber. “It’s better to cut one’s losses.”

One’s losses? Hey Bub, those are MY losses you’re talking about. Anyway, who talks like that? Not Uncle Fritz. In fact, let’s pay a little attention to the man behind the curtain . . .

“Prior to joining Silver Point in 2003, Mr. Wilson was a principal in the private equity business at The Blackstone Group, where he completed a number of private equity investments and leveraged buyouts,” youthinc-usa.org reports. “Mr. Wilson began his career in the Investment Banking Division at Goldman, Sachs & Co., where he worked in the Energy & Power group on a range of merger and corporate finance transactions.”

Hang on; the same Blackstone Group that competed with Cerberus to buy Chrysler? Yup. Although my wife destroyed my tin foil hat whilst heating-up some chicken nuggets, it’s clear that’s a cabal of investment bankers—led by Steve Rattner and Ron Bloom—are deciding the fate of the artist known as the world’s largest automaker. While Barack Obama has publicly stated his intention to “let GM run GM” [presidential paraphrasing], nothing could be further from the truth. Uncle Fritz is so not The Man.

So why keep him around? First, remember that the general public couldn’t give a damn who’s running GM. In fact, they’ve never heard of Uncle Fritz. If they see him on the tube, well, he looks nice. Avuncular. Credible. Non-threatening. So why not?

Second, as GM’s former CFO, Henderson is an excellent pencil pusher. If you were a member of the PTFOA and wanted to grab some numbers upon which to base your otherwise uninformed decisions about the automaker’s fate, Henderson’s the go-to guy. He couldn’t save GM if his life depended on it, but Uncle Fritz knows his onions.

Most importantly of all, Fritz is a terrific fall guy. If/when GM’s NA sales fall [further] into the trash, the PTFOA can throw Henderson on the pyre. The President has taken new steps to put General Motors on the path to profitability; a management shake-up is on its way!

The PTFOA should, of course, dump Henderson now. What better way to celebrate New GM’s birth, to draw a line under Old Skanky GM, than offing the bureaucratic bumbler who helped bring The General to the brink in the first place? Passing the torch PR, and all that.

Yes, well, who would replace Uncle Fritz?

As TTAC’s Ken Elias has pointed out, there are only a handful of auto executives capable of running GM, even in its truncated form. The number who could turn the ailing American automaker around is even smaller. And none of these talents is likely to do so for $500,000: the salary cap dictated by Congress for TARP (Troubled Asset Relief Program) recipients. Also, any CEO who’d take on the job (for real) would want independence from the PTFOA. And the PTFOA can’t have that, now can they?

So Uncle Fritz will soldier on. Or not. Either way, GM is unlikely to receive the one thing it needs to survive: leadership.