Between The Lines: Freep's Whitacre Whitewash

Robert Farago
by Robert Farago

In four day’s time, my byline will appear on this website for the last time. During the previous nine-and-a-half years, I’ve watched the mainstream automotive press slowly evolve from paid cheerleader to . . . nope that’s it. No progress there. Despite having written literally thousands of diatribes against the media’s willful ignorance on the auto industry, I’m still galled that people who call themselves professional journalists have such little moral fiber and testicular fortitude. Only more so, now that GM and Chrysler’s endless turnaround promises have been revealed as a combination of epic self-delusion, outright lying and near-as-dammit criminal conduct (e.g. we never got the bottom of that SEC accounting case). This morning’s Detroit Free Press continues the tradition. “ GM Chairman Ed Whitacre clear he’s in driver’s seat” is the worst kind of non-journalism—the kind that enables the rape of the American taxpayer by a bunch of egocentric incompetents.

More than four months on the job as General Motors’ chairman, Ed Whitacre has sent several clear signals about who is in charge: Ed Whitacre.

The board, under Whitacre’s direction, last week undid the deal crafted under Chief Executive Officer Fritz Henderson to sell Germany-based Opel. Then, this week, Whitacre suggested GM might not become publicly traded again as quickly as Henderson and other GM officials had suggested.

Writer Tim Higgins’ puff piece paints Whitacre as an “activist” Chairman of the Board. Which is both true and a major uh-oh, especially for anyone who thinks a Board of Directors should approve major corporate decisions before they’re made. In the examples above, Whitacre reversed Henderson’s decisions. In other words, Whitacre gave his CEO enough rope to hang himself—then lost patience and strung-him-up.

To his credit, Higgins tries to signal the fact that there’s some loose artillery rolling around RenCen, albeit via a “longtime insider.”

“He’s a very hands-on guy. I really question how long before he just wants to call all of the shots himself,” a longtime insider said.

After highlighting Whitacre’s monomaniacal aspirations via a fictional source, Higgins feels obliged to do the fair and balanced thing via another composite character.

“A tight grip” by Whitacre “and an activist board do not equal a lack of confidence in management,” a veteran GM executive said.

Of course not. So much so (not so?) that Higgins felt compelled to throw in this little tidbit.

A GM spokeswoman noted Thursday that Whitacre has stated that Henderson has the full support of the board.

Obviously; provided you define “full support” as public humiliation. But there’s only so much faux insider analysis a writer can rely upon before even the most Kool-Aid quaffing camp follower feels the urge to Google “Jayson Blair.” And so Higgins gives us the plain facts surrounding Whitacre’s guardianship of our $52 billion “investment” in the nationalized automaker. No wait; sorry. Anecdotes.

During meetings with midlevel executives, he has balked at GM’s PowerPoint culture.

“I hope you didn’t bring charts,” Whitacre said at one such meeting to a group of executives who had, of course, arrived with a stack of charts.

“I want to get to know you,” Whitacre explained in his heavy Texas drawl, according to one GM insider.

OK, that’s creepy. And as much as I agree that GM’s culture is a stunning example of PowerPoint putrefaction, the flip side of factoids is not warm fuzzies.

Is Higgins really suggesting that Whitacre puts people ahead of profits? ‘Cause as much as I believe in the sanctity of human careers, you kinda need a handle on the numbers to do that take-in-more-money-than-you spend thing. And if Whitacre is such a people person, why hasn’t he fired anyone? LaNeve? O.K., how about all the rest?

By now you’re probably thinking I’m being hysterical; Higgins is simply telling it like it is. Here comes the serious fluff.

On a visit to GM’s Arlington, Texas, assembly plant, Whitacre — who retired as AT&T CEO and chairman — sounded more like a car guy than a phone guy.

The plant’s union president, Enrique Flores, UAW Local 276, told members in a recent note that Whitacre “stated that he personally believes the Escalade should remain a rear-wheel drive, framed vehicle, not a crossover type of vehicle.”

Under the old GM, one would be hard pressed to find board members wandering the assembly lines, talking about vehicle platforms with UAW members.

It’s a good thing that Whitacre doesn’t want to make the Escalade into a crossover; Cadillac already has one. Anyway, I’d be a hell of a lot more impressed with Eddy’s car guy chops if he talked to, I dunno, car guys. Or, God forbid, customers. Hey! How about hanging-out with customers for other brands? Or talking with automotive journalists? If not to pick their brains, then to reaffirm the company’s commitment to transparency.

GM has so far declined Free Press requests to interview Whitacre one on one.

And there you have it: the guy who’s really making the decisions at GM these days won’t talk to the press. I guess he prefers to let Henderson take the fall do the talking. It’s such an important point, Higgins makes it twice.

In several interviews with reporters, Whitacre has voiced support for Henderson. He also has said he’s gaining more optimism for GM’s future. “As Mr. Whitacre has stated several times, Mr. Henderson has the full support of the board,” GM spokeswoman Renee Rashid-Merem said.

“We are getting into fighting shape. We’re not there yet. We still have a long way to go, but we are definitely on our way,” Whitacre said this week.

Good old GM. It’s always on its way somewhere. Make that “oblivion.”

Robert Farago
Robert Farago

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  • Pch101 Pch101 on Nov 14, 2009
    Washers, dryers, refrigerators, freezers, dishwashers, ranges None of that is heavy manufacturing. Cars involve far more parts, R&D, suppliers and assembly work. There are a lot more balls to juggle with building cars and far more lag time between initial design and final release. That means that there are more opportunities for mistakes, and it takes longer to bounce back from mistakes because the cycle times are so lengthy. In terms of production logistics, cars have more in common with shipbuilding and aircraft than they do with household appliances. Most heavy manufacturing is a wholesale business. In theory, car production is also a wholesale business -- the customers are actually the dealers -- but in practice, the manufacturer does have to manage the retail channel as well. It's part Proctor & Gamble, part Boeing. There aren't many industries that play in both arenas so closely.
  • Buickman Buickman on Nov 14, 2009

    all the best to you Robert, thanks for the insight and the laughs. you are truly one unique dude.

  • Lorenzo The unspoken killer is that batteries can't be repaired after a fender-bender and the cars are totaled by insurance companies. Very quickly, insurance premiums will be bigger than the the monthly payment, killing all sales. People will be snapping up all the clunkers Tim Healey can find.
  • Lorenzo Massachusetts - with the start/finish line at the tip of Cape Cod.
  • RHD Welcome to TTAH/K, also known as TTAUC (The truth about used cars). There is a hell of a lot of interesting auto news that does not make it to this website.
  • Jkross22 EV makers are hosed. How much bigger is the EV market right now than it already is? Tesla is holding all the cards... existing customer base, no dealers to contend with, largest EV fleet and the only one with a reliable (although more crowded) charging network when you're on the road. They're also the most agile with pricing. I have no idea what BMW, Audi, H/K and Merc are thinking and their sales reflect that. Tesla isn't for me, but I see the appeal. They are the EV for people who really just want a Tesla, which is most EV customers. Rivian and Polestar and Lucid are all in trouble. They'll likely have to be acquired to survive. They probably know it too.
  • Lorenzo The Renaissance Center was spearheaded by Henry Ford II to revitalize the Detroit waterfront. The round towers were a huge mistake, with inefficient floorplans. The space is largely unusable, and rental agents were having trouble renting it out.GM didn't know that, or do research, when they bought it. They just wanted to steal thunder from Ford by making it their new headquarters. Since they now own it, GM will need to tear down the "silver silos" as un-rentable, and take a financial bath.Somewhere, the ghost of Alfred P. Sloan is weeping.