How Ed Whitacre brought GM back from the brink

[BlackGTP]

How Ed Whitacre brought GM back from the brink
Fortune
January 23, 2013

Days after General Motors went bankrupt, former AT&T CEO Ed Whitacre took over as chairman. He found a company paralyzed by old ways and seemingly unable to change. Inside his fight to get GM moving again.

General motors filed for Chapter 11 on June 1, 2009. Eight days later the White House announced that Ed Whitacre would serve as chairman. He had to learn the business fast; six months later he replaced GM lifer Fritz Henderson as CEO. Whitacre himself would be gone after a year, resigning as GM prepared an IPO. He was replaced by Dan Akerson. In American Turnaround: Reinventing AT&T and GM and the Way We Do Business in the USA, published in February by Business Plus, he tells of organizational chaos and a near-fatal lack of urgency. Excerpted below:

In mid-July 2009, I headed out. On the flight to Detroit I had some mixed emotions, I will admit. On the one hand, I felt excited to be going to GM (GM), and very much hoped I could be helpful. But it was also a little scary. I didn't know a soul at the company, didn't know cars, and hadn't stepped foot in Detroit in years.

I touched down and was met by a GM driver. We immediately headed downtown to the Renaissance Center, a mixed retail and office space complex where GM's world headquarters is located. The RenCen was the perfect metaphor for General Motors: overblown, overdone, complicated to the max. I made my way up to the 39th floor for my first meeting of the day with GM's new CEO, Fritz Henderson.

Fritz was hunched over his desk working when I arrived. He welcomed me warmly and said he'd be most willing to help me find out anything I needed to know. Fritz was an encyclopedia of facts and figures. He also knew the global car business cold -- he could quote numbers backward and forward, which was impressive.

I had strong views as to what Fritz needed to do. To get GM back on track and employees reengaged, he was going to have to communicate a clear and compelling vision. How a business is organized is fundamental to me, so I asked for a copy of GM's organizational chart. But Fritz didn't have one. He said GM had done away with them. He was tracking everything in his head.

That was the first red flag.

Full article at link.

[BlackGTP]

One of the downfalls of promoting from within - if you've only worked for one company your whole life, thats the only way you know. Kind of like kids who were brought up by abusive parents and then go on to beat their own kids - that's the way they think family life should be. Many of the GM lifers have never seen that there is a better way.

[megeebee]

Next up was Bob Lutz, GM's vice chairman. He'd retired several times over the years, but he'd been brought back by former CEO Rick Wagoner as vice chairman to oversee the "creative elements" of products and customer relationships. What that meant, I had no idea. I got the sense that Bob's main job was to weigh in with advice and opinions about anything he wanted, anytime he felt like it.

Exactly.

[jzchev28]

Good article, don't read the comments from people at the bottom or you might want to punch people in the face... lol

[Z284ever]

Interesting read......

[GM-10]

I miss "Big Ed."

He injected alot of common sense at the top of the organization. Bob Lutz has paid a lot of complements to him over the last few years. Specifically he points out how much simplification Ed demanded from the upper ranks. One of the more pointed example is the new mission statement of GM.

"Our unyielding mission to design, build and sell the world's best vehicles has led to a healthy balance sheet and world-class products that are winning in the marketplace."

It may be hard to believe, neverthe less what you see above was a revolution at GM. It is something Whitacre basically put into place.

Simplified 'We're gonna build the best damend cars'

[Z284ever]

I miss "Big Ed."

He injected alot of common sense at the top of the organization. Bob Lutz has paid a lot of complements to him over the last few years. Specifically he points out how much simplification Ed demanded from the upper ranks. One of the more pointed example is the new mission statement of GM.

"Our unyielding mission to design, build and sell the world's best vehicles has led to a healthy balance sheet and world-class products that are winning in the marketplace."

It may be hard to believe, neverthe less what you see above was a revolution at GM. It is something Whitacre basically put into place.

Simplified 'We're gonna build the best damend cars'

I agree.

[mchicha]

This must have been difficult for everyone.
The Question is, How was Malibu Screwed?

[Dr. Show-Me]

So Lt. Dan got the job by raising his hand and nobody wanted it? Wow, talk about meritocracy!
If GM can't figure out their mission statement on a 3x5 card, they need MORE new leadership who get it.

[XP300]

There was a point in my life when I disliked Ed Whitacre. Who was this upstart, buying up bits and pieces of the old Ma-Bell?

Reality hit like a load of bricks. AT&T hired an incompetent, by the name of C. Michael Armstrong who ran amuck buying and dismembering bits and pieces of companies he bought and things he got bored with. My portion of the old Ma-Bell was going no where fast and by the looks of it, so was my lifes work, along with my pension.

Ed Whitacre came along just as things were getting really bad and bought the old AT&T just for the name. Thank you Ed, you saved my pension and those of the people I worked with. Unfortunately, Armstrong had dumped many of the pieces that could have made todays AT&T much stronger. I believe the title of this thread, because I know how Ed Whitacre worked to bring together a company, which without his direction, would probably be gone today.

GM needs a strong leader, one who looks at the total picture, establishes a goal, creates a management structure to support that goal, assigns responsibility to those in that structure and manages his team, eliminating those who do not produce positive results. In my opinion, GM doesn't have that leader at this time.

[Elvisuperman]

Wow; good read... some pretty revealing stuff.

"One of the critics on the board was Dan Akerson. Dan was pretty vocal during the executive session. He said he thought GM was one of the worst companies he'd come across in his entire life. And he was not a fan of GM cars -- he made that crystal clear."

[rand49er]

Well written ... very easy read.

[All Star]

Gives me a little more faith in Lieutenant Dan, and explains more how GM went through so much management change...fascinating read.

[DAyers]

A very good and interesting read. It provides a great deal of insight into the workings of GM uppper management from the last days of Rick Wagoner to the appointment of Dan Ackerman as Chairman and CEO.

[Evo69]

Seems to me he likes Reuss and wants him to gain enough experience in his current portfolio before assuming a CEO role. I like Reuss too, I think he got what it takes.