By on September 4, 2009

Fritz Henderson got a thumbs-up from the Board of Directors just days ago, but it seems that Chairman Ed Whitacre doesn’t want anyone to get comfortable. The Freep‘s Tom Walsh just posted a column describing GM execs as “rattled” by Whitacre’s recent revelation that at the New GM executives must earn their keep.

On Wednesday, Whitacre told a group of GM salaried staff — in one of several “diagonal slice” meetings, so called because they mix people from all levels — that he expects to see lots of changes in the next 12 weeks. Changes every day.

So, is the party over? Surely GM’s brass knew that there would be some accountability, someday. Right?

‘I found it stunning,’ one GM executive told me Thursday, after hearing that Whitacre had spoken so pointedly to the employee group about the urgency of producing visible changes in 12 weeks . . . Another GM officer described Whitacre as ‘frighteningly direct’ in conversation, making it clear that every top executive’s job at the automaker is on the line, and that heads could roll in the next two or three months if there’s not significant progress in vehicle sales, market share and profitability.

Stunning? Frighteningly direct? Whitacre is merely doing the minimum required to get GM ready for an IPO planned for next summer. The White House wants out of GM, and the UAW would probably like to dump its equity as well. But who’s going to buy in if GM doesn’t radically turn itself around over the next 9 months?

And really, how are they going to turn sales and market share around? The problem with Whitacre’s scare-’em-into-competence approach is that all the incentive is to make GM look good in the short term. Which means temptation to cut corners on long-term strategy to pull off the IPO. The terrified reaction to Whitacre’s tough talk proves that GM culture change hasn’t changed. Will turmoil and turnover at the highest levels right now really make a difference in time for next Summer’s IPO?

The IPO delay watch begins now.

Get the latest TTAC e-Newsletter!

Recommended

19 Comments on “GM Chairman Scares Execs with Actual Expectations...”


  • avatar
    slateslate

    ok….so I’m a GM executive.

    I’ve seen and survived round and round of layoffs and buy-outs. If I decided to leave Michigan, I wouldn’t be able to sell my house at a decent price. My children probably all have said goodbye to Michigan after college. I’ve seen GM’s market share decline dramatically since even the relative hey-day of 1999.

    It’s 2009 and Whitacre comes in….and only now I’m “stunned” at the need and demand for visible change.

    WTF? Do these people live on the same planet as the rest of us?

  • avatar
    Bruce from DC

    I’m stunned that the executives are stunned. Do they really think GM’s fall into the hands of a government/bankruptcy rescue is the result of some unfortunate circumstances, beyond their control?
    Ed, I think you’re a little hard on Whiteacre, by assuming that this is just a lipstick-on-a-pig maneuver to support an IPO next year. It could be . . . but it might not be. At least give Whiteacre the benefit of the doubt; if you’re going to get an organization to change direction, you don’t tell the people that it’s going to be done next year, or next month, or even next week. You tell ’em its going to be done NOW! That way, those who need to be stunned — like the anonymous exec — will be stunned, hopefully into some sort of constructive action. And given that Whiteacre is a Bell-head (i.e. an old telephone monopoly guy), I think we should give him credit for taking names and kicking butt.

  • avatar
    rnc

    Whiteacre is a Bell Head, but he’s also the person who turned SWB (the 2nd smallest baby bell), into the most powerful telco during deregulation (when cable, local and long distance and cell started competing and were free to merge, takeover and destroy each other). I would say he knows how to run a competitive business in a competitive field.

    And I’m as short on GM as the next but TTAC bitches and bitches about GM and lack of accountability and making changes and now that someone is, that’s wrong? It’s one or the other.

  • avatar
    esg

    If only Gettelfinger would shave his mustache. For GM to survive and prepare for an IPO, the unions need to drop their price drastically now. That is the only chance. The ball is in the union court now.

  • avatar
    pnnyj

    I’m stunned too.

    I never expected to see anyone connected with GM to actually demand any sort of real performance and accountability.

    I’m stunned, but in a good way.

  • avatar
    wsn

    Capitalism: market determines whether someone earned his keep.

    Communism: the Chairman and/or his minions determine whether someone earned his keep.

  • avatar
    Dynamic88

    From Deming’s 14 points

    8.”Drive out fear”. Deming sees management by fear as counter- productive in the long term, because it prevents workers from acting in the organisation’s best interests.

  • avatar
    Happy_Endings

    How long until Whitacre is marginalized/quits?

  • avatar
    FloorIt

    Glad to hear Whitacre is kicking butt. A few months ago the blogosphere consensus was why this guy & would he keep the status quo at GM & given his statement “I know nothing about cars”.

    @Dynamic88:
    GM has ignored Deming and his ideas since…well..forever. Maybe scaring the execs first then starting Deming ideas is the way to go.

  • avatar
    OldandSlow

    Is there any dead wood types still clinging on at GM? Deming or no Deming, it may be house cleaning time.

  • avatar
    Gardiner Westbound

    GM staffers are like galley slaves. They don’t know where they are, where they are going, how to get there, or if they will get there; and keep their heads down the rest of the time.

  • avatar
    Runfromcheney

    Bruce from DC :

    The GM executives do think that this is all caused by unfortunate circumstances beyond their means. When the bailout came around, all they did was blab on and on about how they are only in this mess because of the credit crisis.

  • avatar
    wmba

    Lemme see: this guy Whitacre, using the usual bombast of a guy who has made it to the top without a clue about the actual running of the organization, has laid down the law.

    More market share, greater profitability, and increased sales, all in twelve weeks.

    More delusional than GM execs themselves. Just three months to do this is absolutely ludicrous, so obviously Whitacre is as crazy as GM execs, just in a different way.

    As a Canadian with double the tax bucks per capita invested in GM that Americans have, I am not impressed. Something will happen. What, who knows?

  • avatar
    rpol35

    It’s good that this guy is all over the senior managers of the company but he’d better have some concrete idea of what he specifically wants to see “change”- wise. If he isn’t leading with some hard, specific goals, then he’s just another corporate empty suit.

  • avatar
    CarPerson

    …if there’s not significant progress in vehicle sales, market share and profitability.

    How are they going to do that? Anyone? Anyone?

    The get-together of those who do not like GM was an inspired first start. The ball is now in General Motor’s court what they learned. What is the follow-on?

    May I humbly suggest that each and every car review from everywhere be reviewed and a punch list prepared listing why no GM product appeared in the top five. (Even the critically acclaimed, in some circles, Malibu was nine in one list and thirteen in another.) The brand manager is then tasked to fix at least half the complaints.

    Here is a car review from CarPerson for pretty much any GM product:
    When slamming the door sounds like a car crash instead of a dull thump, drop $1500 off the MSRP.

    When the interior noise level is appreciably the same when the window is rolled up as when rolled down, drop $2500 off the MSRP.

    For stripping $75 (GM cost) worth of noise and temp insulation from the car, drop the MSRP $2500.

    Drop another $3500 off the MSRP for any vehicle with a greater than 35-foot turning radius.

    Drop another $3500 off the MSRP for any vehicle that cannot stop from 60mph in 135 feet.

    Drop $5000 off the MSRP for any 90-degree V6 under the hood.

    Ok, so let’s just say “value stripping” a vehicle is NOT the way to go forward with a VIABLE car company.

  • avatar
    texlovera

    Actually, I think part of Whitacre’s job is to be the hatchetman. He’s set an unobtainable goal (IMO): there is NO WAY GM will increase ANYTHING appreciably in 3 months. So, these people have effectively been given their 90-day’s notice.

    Meanwhile, he buys himself time to figure out what he REALLY wants to do, then does it with a (hopefully) new and/or “highly motivated” mangerial force.

  • avatar
    yankinwaoz

    Too bad Whiteacre can’t give the same “pep talk” to the dealers too. After all, they are the public face of GM.

  • avatar
    Aqua225

    CarPerson:

    What in the heck does a 90 degree V6 have to do with anything? GM made plenty of good 90 degree V6 engines and still does. The problem is car build quality and interior materials for folks who chose foreign over domestic designs.

    On the scare:

    I buy texlovera’s explanation. This is dynamiting at the top level of GM, with a 90 day fuse.

    I want to see GM survive, so I hope he pulls it off. In my opinion, the only way for that to happen is that most of the top level of GM hits the road, permanently (at least the road out of GM).

    I also tire of TTAC’s downplay of any move at the top. GM is damned on TTAC if they do, damned if they don’t. First TTAC condemns no movement, then condemns any movement. One could say TTAC just damns GM! (which I actually believe to be the real truth about it).

  • avatar
    CarPerson

    Flat and inline six cylinder engines are inherently a balanced design. A six cylinder V-configuration is not. It takes one, if not two balance shafts and crank trickery to achieve 120-degree firing to smooth them out. Start with a 60-degree design and half the battle is won.

    Starting with a 90-degree V6 design, usually the product of engineering shortcuts and machine tooling limitations, spells defeat at the get-go as General Motors is loathe to spend the money to design and build a 90-degree V6 engine properly.

    In the early ’60s Buick sold a 90-degree V6 that had the rocker covers bouncing off the shock towers it shook so bad. GM’s solution? Soften up the motor mounts.

    If General Motors wants to push crap out the door, the MSRP needs to take a healthy wack for every stunt they pull to balance the transaction.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Matthew Guy, Canada
  • Seth Parks, United States
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Moderators

  • Adam Tonge, United States
  • Kyree Williams, United States