Management Turnover as Change Agent

Friday, August 14, 2009

GM's New Chairman Takes His Responsibilities Seriously

GM’s new chairman, Ed Whitacre the former AT&T chairman and CEO, appears to be taking his news responsibilities seriously. According to a story by David Welch in BusinessWeek,

General Motors’ recently installed CEO, Frederick A. “Fritz” Henderson, has had just one board meeting with his new slate of directors. And already they are giving him pressure to show better results.

… (Henderson’s) first board meeting shows a stark contrast from GM’s old board. With a few exceptions, the previous directors showed a lot of patience with ousted Chairman and CEO Rick Wagoner. He racked up some $80 billion in losses since 2005 but kept solid backing. The old board also had to focus mostly on costs since the automaker has been in nearly constant restructuring mode for years.

… At the meeting, new Chairman Ed Whitacre, who had previously been chairman and CEO of AT&T (T), and several other directors pressed Henderson on how the company would build revenue, strengthen its brands, and communicate the message that its new products are competitive. “All of their questions were on revenue,” Henderson said, adding that they asked, “What are your metrics? How will you hold yourself accountable?”

While the government has been constantly under criticism for getting involved in the auto industry’s affairs and bailing them out so far, it has demonstrated far more moxy in relation to management than previous shareholders. Let’s hope the new board can really get some results out of GM’s new CEO, Fritz Henderson and his management team. Stay tuned.

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