Editorial: General Motors Zombie Watch 4: A House Divided

Robert Farago
by Robert Farago

Matthew 6:24: “No man can serve two masters; for either he will hate the one and love the other, or he will be devoted to one and despise the other.” Applying this biblical admonition to General Motors, it’s clear that the federal bailout will accelerate rather than retard its ultimate demise. The automaker’s corporate culture was dysfunctional before the feds took the reigns back when its over-compensated suits made sure that failure was impossible (and not in a good way). Now that GM employees must answer (at least in the theoretical sense) to both management and politicians, it’s twice as screwed-up. As I indicated in this morning’s Wall Street Journal Op-Ed, the political interference with the company’s operations is already underway. Well of course it is. And it will continue. As will GM’s descent into oblivion. Simply put, there’s no way GM can get its house in order when Uncle Sam is the landlord. SNAFU × 2.

Today, GM CEO Fritz Henderson reported for work. In and of itself, that’s about as bad a sign of GM’s ongoing failure as you could get. Lest we forget, Henderson is old-school GM: the former CFO who watched the company’s balance sheet go tits up. Henderson is also guilty by association: the hand-picked successor to GM’s phenomenally failed CEO (also former CFO) Rick Wagoner.

The fact that Henderson made it to the top of GM diseased corporate caste system is all you need to know about his suitability as a turnaround artist. Inmates. Asylum. Administration. That sort of thing.

This stout defender of GM’s status quo emerged from yesterday’s meeting with The Presidential Task Force on Automobiles (PTFOA) proclaiming that his job was safe. Ish. While Fritz expects to remain large and in charge of the small and getting smaller automaker as it exits bankruptcy, “nothing’s guaranteed.” How . . . reassuring.

In a familiar sort of way, it’s the same set of weasel words PTFOA jefe Ron Bloom used to hedge his promise not to keep plowing taxpayer money into the quagmire increasingly (and accurately) known as Government Motors. Am I the only one bothered by the fact that, despite having not one but two masters, GM’s strategy is still in flux?

I reckon two things are certain: GM’s death and your taxes. GM and its new presidential overlord are doing all they can to counteract that politically unpalatable reality, trying to make it seem as if there’s hope for change. Their latest attempt to give wing to these (recurring) delusional flights of fancy: the new Chairman of GM’s Board. GM supporters seized on former telecoms magnate Edward Whitacre’s appointment as a sign of “fresh” thinking.

Back on planet Earth, why the Hell interim BOD director and PTFOA lackey Kent Kresa picked a man without any automotive or manufacturing background is an interesting question. As in “clueless old white guys that not-so-interim GM CEO Fritz Henderson can con with a spreadsheet for $50,000, Alex.”

“He was someone who [PTOFA chief] Steve Rattner knew, or knew of,” Mr. Kresa told the New York Times, by way of explanation. And now Kresa says he’s searching for other board candidates “who have been involved in companies where there has been a dramatic change in the marketplace.” Oh, I know! What about the guy who put Kodak in the shitter?

No, wait; he was on the last GM BOD. And I guess Kresa’s looking for candidates who saw a dramatic change in the marketplace and reinvented a chronically unsuccessful company with a huge, bumbling bureaucracy into a leaner, greener, faster, smarter and enormously profitable participant in same. (Experience working for politicians a plus.) He just forgot that last bit.

Not that it really matters. A board chairman is, at best, a watchdog. (You might say Whitacre is a lapdog, but I couldn’t possibly comment.) Even if Eddy W. understands that culture eats strategy for lunch and caps Fritz’ ass, it must be remembered that GM’s Board of Directors is merely a front for the Powers That Be.

The PTFOA is the real BOD. They are the masters to whom the bankrupt automaker’s employees—which includes Whitacre—must answer.

So, ultimately, it must be asked: what the fuck do THEY know about the car business? I know: it’s not a new query. But it’s one that remains unanswered, even as GM continues to suck-up taxpayer billions and realign itself for the future.

By thy deeds thy shall be known. Only one problem: the deed required is a complete rehabilitation of a car company that’s screwed its customers for decades. Even if GM built a Camry and Lexus-killer, it would take them another decade and at least another $100 billion to recover their missing marketplace mojo.

Given the “dramatically changed” US auto scene, no one but the feds would sink that kind of cash into a GM-shaped money pit. And neither should we. That’s not a politically palatable conclusion, but it’s the God’s honest truth.

Robert Farago
Robert Farago

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  • "scarey" "scarey" on Jun 13, 2009

    @long126mike-June 12th, 2009 at 12:50 pm So, to summarize: GM’s executives suck and government (especially left-of-center government) sucks.As long as one shares the Norquist viewpoint, nothing the government does will ever be right, [s]save fund the military and cops.[/s] Fixed that for ya.

  • Potemkin Potemkin on Jun 14, 2009

    "Not only does Whiteacre know nothing about the car business," Whiteacre is a political appointee and we all know how well that works, remember good old Browny at FEMA. That's what's wrong with the government meddling in private enterprise. Look forward to more clueless appointments at GM. Every senator will be wanting to give his big contributors do nothing jobs at GM.

  • 3-On-The-Tree Lou_BCsame here I grew up on 2-stroke dirt bikes had a 1985 Yamaha IT200 2-strokes then a 1977 Suzuki GT750 2-stroke 750 streetike fast forward to 2002 as a young flight school Lieutenant I bought a 2002 suzuki Hayabusa 1300 up in Huntsville Alabama. Still have that bike.
  • Milton Rented one for about a month. Very solid EV. Not as fun as my Polestar, but for a go to family car, solid. Practical EV ownership is only made possible with a home charger.
  • J Love mine, but the steering wheel blocks dashboard a bit, can't see turn signals nor headlights icons. They could use the upper corners of the screen for the turn signals. Mileage is much lower than shown too, disappointing
  • Aja8888 NO!
  • OrpheusSail I once did. My first four cars were American made, and through an odd set of circumstances surrounding a divorce, I wound up with a '95 Nissan Maxima which was fourteen years old and had about 150,000 miles on it.It was drove better, had an amazing engine, and was more reliable than any of my American cars. This included a new '95 GMC pickup that went through five alternators in under two years while the dealership insisted that there was no underlying electrical problem while they tried to run the clock on the warranty.That was the end of 'buy American'. I've bought from Honda and VW since, and I'll consider just about anything except American now.
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