Business

GM chairman Whitacre has hands-on approach

DETROIT — 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 CEO 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.

Internally, GM executives said, Whitacre is sending a clear message through the organization that urgency and change are required.

"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.

While that's a notion with plenty of doubters — some citing the fact that Whitacre is 68 and already retired from one CEO role — the talk stems from the fact that his involvement in GM is unlike that of previous independent board members, in great part because of his job as a non-CEO chairman. He's spending several days a month in Detroit and has set up an office with staff members in the Renaissance Center.

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

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

Whitacre is making an impression throughout GM and to the outside world as he takes a high-visibility role.

He became the face of the post-bankruptcy company in TV ads launched in September.

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, according to one GM insider.

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.

"The men and women behind these great vehicles want this company to succeed, and they want it to succeed badly. And they know it starts as being responsive as possible to customer demand," Whitacre said last week at Texas Lutheran University, where he briefly taught following his AT&T retirement.

Whitacre as chairman and Fritz Henderson as CEO is a different leadership structure than before bankruptcy, when Rick Wagoner held both roles and received little pushback from the company's directors.

As part of the nearly $50 billion U.S. taxpayers provided to keep GM alive, the automaker was required to change a majority of its board members, and Whitacre was chosen to become chairman once the automaker emerged from bankruptcy in July. Wagoner had been fired by government overseers in March and replaced by Henderson.

From the start, Whitacre made it clear that he wanted the latitude to make decisions at GM without having to worry about the government butting in.

"So far, they've been true to their word. They have let us run it," Whitacre said during his speech in Texas. GM has so far declined requests to interview Whitacre one on one.

It was roughly three months ago that Whitacre began meeting with workers throughout the company, telling them to expect to see constant change over the following 12 weeks.

Since then, GM's board has scrapped plans to sell off Opel to Canadian auto supplier Magna International and its Russian bank partner, Sberbank.

People familiar with the deliberations said board member Steve Girsky played a big role in convincing the board to change course on Opel. He convinced members that GM couldn't afford to lose it, but could afford to keep it.

"We asked ourselves as a board... 'How can you be a global player and not play all over the globe?' " Whitacre said this week.

Whitacre also has suggested that a public stock offering ranks behind paying off the $6.7 billion in U.S. government debt on GM's books.

On some issues, GM management has apparently won.

Whitacre's board tried to push GM management to move up the launch of the Chevrolet Cruze small car, according to a person familiar with the discussions.

The second-quarter launch already was seen as overly ambitious.

So GM officials announced in October that the Cruze launch would be delayed until the third quarter of 2010.

Gerald Meyers, a business professor at the University of Michigan, said Whitacre is walking a fine line between holding the organization together and trying to shock it into change.

While it is clear that Henderson is under pressure to get results, Meyers said Whitacre will give his CEO time to perform.

"He's going to be given enough room to run," the professor said. If Whitacre "moves now, it will be viewed by the whole organization as precipitous; he didn't give the guy a chance."

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.

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