Of GM, chainsaws, rattlesnakes, and risk

December 8, 2009

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There's something eerie about a prediction that comes to pass. When Fritz Henderson was announced as Rick Waggoner's replacement as GM's CEO on March 30, a business blog headline read Fritz Henderson May Not Last Long at GM.



The blog, by John Gapper, associate editor and chief business commentator of Financial Times, predicted that although Henderson would be a tough and dynamic game plan changer, he was too much of a GM lifer to make the truly sweeping changes Gapper said were needed to turn the automaker around and he questioned whether Henderson would retain his post as Mr. Wagoner's successor for long.



How did he know?



I was sorry to see (Henderson) him fall in line with Mr. Wagoner's dubious insistence that GM would lose far more by going into Chapter 11 bankruptcy than restructuring outside it. Given that it has not managed to negotiate seriously with its bondholders so far, I remain unconvinced, Gapper said. He added, I would give him a 50-50 chance, which is not bad given the odds on GM as a whole, Gapper had written.



Insiders like Henderson, he said, are steeped in the traditional ways of doing things and are risk-averse. Yet, it appears that it was Henderson's riskiest initiatives—trying to sell Opel, Saab, and Saturn, that did him in.



Or was it not so much that he avoided risk, but rather that his risky initiatives did not succeed, that planted the boot behind him? His plan to sell Saturn brand to auto distributor Penske Automotive Group Inc., and to sell Saab to Koenigsegg Group were unsuccessful. The board then rejected Henderson's plan to sell GM's European division, Opel, which would have cut off GM"s reach into the European market.



In its efforts to accelerate profitability, GM's board had better make sure that the turnover from Mistepper Wagoner to Chainsaw Fritz, to Rattlesnake Whitacre to his eventual successor—is not too tumultuous for a company that has just begun to see its U.S. sales recover.



Got thoughts? I'd love to hear from you. kateb@thefabricator.com



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Kate Bachman

Editor
FMA Communications Inc.
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