General Motors Death Watch 191: On the Fritz
Journalism professors counsel aspiring scribes to avoid deploying numbers in the first paragraph. It’s a sensible prohibition. Although statistics (a.k.a. facts) give journos the imprimatur of authority, nothing’s more narcoleptic than naked numerology. Which is just as well. My math skills are only slightly better than my ability to pilot a Gulfstream IV. But I know a man who regularly rides in the back of one of these airborne ego-carriers, and he’s an accountant. And the CEO of GM. For the weekend, anyway. The question is, who’s next?
Now that GM CEO Rick Wagoner’s mob have reported a $15.5b second financial quarter loss without offering a concrete, coherent plan to recover the company’s lost market share or staunch the arterial spray of red ink, Wagoner’s time’s up. COO Fritz Henderson is generally tipped for the top slot. While the financial community likes Fritz, handing Wagoner’s hand-picked successor the keys to the not-so-magic kingdom would be yet another monumental mistake.
Henderson is, nearasdammit, a Rick Wagoner clone. Though Henderson’s five years younger at 50, both men are accountants. Both men have Harvard MBA’s. Both men occupied GM’s Beancounter-in-Chief (CFO) position (i.e. managed GM’s inexorable decline). Both men can read a spreadsheet like walking a dog, but can’t spot a dog [product] if it pissed on their highly polished brogues.
Bottom line: Wagoner and Henderson define the world through numbers. While Global Product Veep Bob Lutz’ epic fail indicates that GM needs a red-blooded “car guy” at the helm like they need another Lambda-platformed crossover, now is the time for big ideas, not big numbers. (God knows there are plenty of THOSE hitting the fan.)
One of the big ideas that GM needs, as it goes into and through bankruptcy, is change. If Rick Wagoner’s tenure has taught us anything, it’s that GM’s business model is completely busted. The artist once known as the world’s largest automaker simply can’t continue designing, building and selling vehicles as they have for the last 100 years. Bureaucratic fiefdoms, union intransigence, crushing overheads, lackluster products, over-generous executive compensation, scattershot marketing, superfluous brands and more— EVERYTHING must go.
The salient fact here: Fritz Henderson’s worked for GM since Michael Jackson burned his scalp for Pepsi (1984). He is, in effect, a GM lifer. In terms of the old debate about whether radical reform is best accomplished from within or without, give me a break. The chances that an executive born of GM’s corporate culture will completely destroy that culture are about as great as the chances that Zimbabwe’s Robert Mugabe will suddenly champion genuine democracy.
Like Ford CEO Alan Mulally, The General’s next general should be ready, willing and able to abandon vast swathes of territory. In fact, GM’s leader must accept the fact that The General’s global dominance is dead, and it ain’t coming back for the next ten years (at least). By word and deed, he or she must communicate to the remaining employees that any aspirations in that direction are a dangerous fiction.
The new (yes new) goal: a return to profitability, whatever it takes. If GM must reduce itself to two brands, if GM must constrict until it can make its nut on a 10 percent market share, so be it. A piercing glimpse into the obvious, perhaps, but the wider point is that GM must experience a cultural revolution.
As always, real revolution starts with chaos. To liberate the talent locked-up within GM, the new CEO must fire ALL the suits nurtured by GM’s existing entropic structure. If Bob Lutz and Fritz Henderson are reluctant to unfurl their golden parachutes, the new CEO must push them out of RenCen's executive suite with extreme prejudice. As Machiavelli counseled, the cuts must be deep and profound, leaving not a single member of the old guard to undermine reform.
Many of TTAC’s Best and Brightest have suggested that GM should move its corporate HQ from Detroit to the left coast. This is exactly the kind of take-no-prisoners thinking GM’s new boss must bring to the job. Wagoner and Henderson are oblivious to symbolism’s importance to GM’s future, and the need to communicate forcefully and effectively to all of GM’s stakeholders. Unlike Ford’s Mulally or Chrysler’s Nardelli, GM’s new broom must be a great communicator.
Ultimately, GM’s slide into disaster is a story of personal failure, of board members and CEOs who couldn’t tell their ass from a hole in the ground. If the American automaker emerges from C11, it will be a story of the personal triumph of its new CEO. GM’s survival is not a question of numbers on a screen. It’s a question of leadership. Fritz Henderson is no more the man of the hour than Rick Wagoner. So, who is?
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