Fritz was CFO during their period of massive losses. He, Whitacre and the Board knew he was history. They didn’t need any coaching or orders from Washington to do what they knew Washington wanted. Fritz took his recent job to put the best face on things and to be the scapegoat when the inevitable happened (bad numbers last two quarters). He knew that was what the Board and the government wanted. Now, if Whitacre, the Board and Washington are smart, they will leave BOB LUTZ (marketing) alone. With him, GM has a real chance. I think GM will turn on a dime and surprise a lot of nay-sayers.
You may be right, he may have taken the job knowing it was temporary. Rumor has it that he and Whitacre locked horns on some key strategies, particularly with regards to Saab and Saturn.
Suggested reading: “On a Clear Day, You Can See General Motors” by John DeLorean. This book was written back in the 1970’s and DeLorean discussed the poor management of General Motors at that time and how they wasted money. One executive always wanted a sandwich and a beer in his room before he turned in. His underlings rented a crane, removed the hotel window, then hoisted up a refrigertor so the big shot could have his sandwich and a beer. (this was before hotel rooms were equipped with compact refrigerators). The Chevrolet Vegas of that time period had engines with the durability of a potato chip. The cars rusted almost before they left the showroom. About this time period, the GM lines lost their identities. Chevrolet engines appeared in Oldsmobiles and nobody told the customers. Now the Chevrolet V-8 may be every bit as good as the Oldsmobile Rocket V-8, but some Oldsmobile buyers bought the Oldsmobile because of the engine. Johnny Carson joked about this: “Oldsmobile motors went into Cadillac Sevilles, so they had to put Chevrolet engines in Oldsmobiles. Chevrolets then used Waring Blender motors”. I remember back in the 1950’s there was talk about breaking up GM into separate companies because it had about 50% of the market and could be considered a monopoly. Maybe we all would have been better off if GM had been broken up into competing companies.
Henderson with his financial skills was the right guy to lead GM through the very complex bankruptcy process. It was generally recoginzed he was not a product or marketing type and woefully ignorant of international politics.
His bungling with the Saab and Opel divestment attemps, and other issues made this the right time to have him retire with his platinum handshake.
Bob Lutz is keeping the product/market ball rolling at this time, but he’s getting old. The board needs a combination of Jack Welch and Ford’s Mullaly as their next president. They also need a successor to Lutz. Those two are most certainly not found in the current orgainzation.
Since the board of directors is so powerfully in charge,
Why do they even need a CEO ?
Now there’s a cutback we can live with.
Boards are to “provide detached, intelligent oversight and guidance” to the business; they don’t do any work! Having said that, some companies get by without boards, since the families that own them meet around the kitchen table on a weekend and determine the future.
I wished Frank Stronach had gone somewhere else than Russia for his financial backing; then the deal might have gone through. GM’s board finally realized that the key value of Opel was its European presence and small car design skills. Everything else was liability, however. Now they have to chop back a militant, politicised overweight behemoth in Europe and incur all the negative publicity that generates.
"His bungling with the Saab and Opel divestment attemps, and other issues made this the right time to have him retire with his platinum handshake. "
How much did Henderson actually have to do with those deals? There must have been a project manager, and I’ll bet it was not Henderson. Also, if the B of D was deeply into the Saturn and Opel deals (they nixed the Opel deal), then shouldn’t they take a large portion of the responsibility?
“The cars rusted almost before they left the showroom.”
True. Toyotas and Hondas were particularly known for rusting out early - worse than any domestic car of the 70s. My, how far they’ve come. GM has come a long way, too.
Let’say they made Fritz a very rich “sacrificial lamb”. There is blame all around, of course. Mulally at Ford made quick work of unloading the money-losing luxury divisons. Jack Welch would have cleaned out GM in half the time!
“So GM blows off Pontiac, but keeps Buick. Why?”
Buick is incredibly popular in China…another reason is that Buick has always been a money maker (thats what I have learned, dont know if its still true) for GM. Pontiac lost its “excitement” and became as boring as Olds.
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I’ll not comment on the politics concerning the shuffling of the pawns but I will say this and this is simply my opinion.
While the the talking heads say progress is not fast enough I do believe GM is going in the right direction.
- The Camaro is a big hit weather one likes it or not. Dealers finally got some inventory but early on it was tough to get one and as soon as one got backed off the transport it was snapped up. Most dealers would not give one up on a dealer trade even if it were in their advantage.
- The Equinox is the same way. With very little advertisement the vehicle was selling like hotcakes and getting one to sell was as difficult as when the 2010 Camaro came out.
- The Traverse while not as popular as the other 2 is a very good vehicle that sells.
GM now sells good looking, quality vehicles that people want to buy. IMOO
Agree, when all is said and done GM is light years better and faster than it used to be. The 2 key issues here are quality and product attractiveness. And GM has scored well so far. They talk less about the comimg Volt now, since that will be a niche vehicle for some time to come.
No one can tell how well built a car is after just 1-2 years…Sorry…but it’s IMPOSSIBLE. Are GM cars more reliable? More reliable then what? What they use to be? Probably are! But does that mean they’re more reliable then a Toyota or Honda? We’ll have to wait and see if they are. It’ll take YEARS to determine that…maybe even decades. Introducing a one or two cars that is popular is NOT the solution. GM has far far bigger problems then that. Their whole management structure needs to be changed.
Here’s a nice article on the subject. Posted in this forum a few months ago. I liked it so much I bookmarked it.
Good article, Mike. I always felt that GM vehicles were bad, not in the Fiat sense (everything poor), but with selected major component problems such as transmissions, manifold gaskets and other bean counter caused problems.
Those problems are relatively easy to eliminate with with a focused effort. Just get rid of the bean counters and let the engineers provide the solution.
The high cost was self-inflicted by caving in to unending union demands, and having far too much overhead.
And contrary to what some people here believe…
I’m VERY VERY VERY SADDENED by GM’s failure. Growing up owning and LOVING Chevy cars and trucks. Loved their styling, their performance the ease of working on them. Also have family that works there. And the sad part is…it NEVER should have happened. If (GM/Ford/Chryco made changes years ago there would be NO Toyota, Nissan or Honda.
Maybe, maybe not. Personally I don’t see how a company as large as GM can change in 8 months especially in a down economy. Especially when bringing new product to market cycle is very long and intense.
My only opinion is they should simply dump the non selling cars and concentrate on high profit makers and trucks/suv’s where they sell.
It all perception anyway that sells. Not sure how GM can change that.
My only opinion is they should simply dump the non selling cars and concentrate on high profit makers and trucks/suv’s where they sell.
SUV’s have been on the decline for at least 3 years now.
I do agree…no way can GM make this big a change in 8 years. They might be able to get on the right track…but they still have to travel the track.
Agree that changes made years ago could have prevented this collapse. However, there would still be Toyotas, Hondas and Nissans, but in smaller numbers.
Japan, Korea and now China (as their living standards rose)have for many years focused on becoming good at consumer durables and they will be world players for a long time to come.
Aside from Maytag’s financial problems, the appliance industry did not go through the same process the car industry went through, but it still shrank. So we now have Bosch, Miele, LG, Samsung, and others, including some Chinese, replacing such previous household names as Westinghouse, Admiral, McGraw Edison, etc. Even GE, one of the few remaining names, has its appliance division up for sale.