GM Gets a New Boss

And at least for the moment, it’s Ed Whitacre, the former AT&T (ATT) CEO who took over as Chairman of the General Motors board post-bankruptcy. Fritz Henderson, the CEO who replaced Rick Wagoner at GM after Wagoner was dramatically fired by the President of the United States, is out. The auto industry is, according to the New York Times, “stunned,” but that’s a patently ridiculous assertion, as various media outlets, including Shifting Gears, have been speculating that Fritz’s days were numbered pretty much from the day he took the job. (It’s worth noting that he had to ask former not-quite-car-czar Steven Rattner to not name him “interim” CEO).

What was stunning was that he resigned on the eve of media days at the Los Angeles Auto Show, where he was supposed to deliver the keynote address ... tomorrow morning! Bob Lutz, who recently emerged from retirement to take charge of GM marketing and immediately put Whitacre in a TV ad, will be filling in (which means that the keynote might now actually be something worth writing about). Lutz is in his late 70s, and Whitacre is in his late 60s, while Fritz was born in 1958. Take this for what it’s worth, but the idea of a couple of older dudes taking over GM isn’t such a bad outcome, as they might remember when GM was cool. Henderson was part of a technocratic Boomer cadre that turned GM in to a company that was capable of selling its main European dvision, Opel, to a consortium of Canadians and Russians. For Whitacre’s board, this was a horrifying outcome, crushed as soon as Cash for Clunkers gave GM a little sales momentum, and probably the thing that sealed Henderson’s fate after 25 years at the General.

We should note at this point that the U.S. Treasury currently owns 60 percent of GM, but evidently it has no idea what’s going on in the executive suites of its Detroit holdings. According to the NYT:

“A spokesman for the Treasury Department, Andrew Williams, said government officials were informed of the resignation after it happened.”

This is absolutely unfathomable, even if getting rid of Fritz was obviously the best option for the taxpayer. Nevertheless, it does confirm speculation that the post-bankruptcy GM was segregating into fiefdoms, with Henderson in one realm and Whitacre-Lutz in another. The NYT Wheels blog is now even considering the possibility of a full-on Lutz comeback, to CEO no less.

There are some significant business issues that this move brings to the fore, however. They all center on GM being in a position to do an IPO next year before the midterm elections. Henderson had advocated for that, while Whitacre was less enthusiastic. This raised the question of whether Henderson was too much Washington’s man, while Whitacre sought to take the new GM public once the company could consistently make money again, rather than simply look as if it could repay the taxpayers’ investment.

Soooo ... awkwardness. On the one hand, jettisoning Henderson makes sense if GM hopes to compete on product and continue to sustain a viable European presence, as well as develop smaller, more fuel-efficient cars based on Euro platforms and engines in the future. On the other hand, the non-Opel sale, coupled with this latest move by Whitacre’s board, makes it appear very much as if GM isn’t afraid of becoming a political liability for the Obama Administration in 2010.

The obvious question now is: If Whitacre chooses to step down as CEO, will he elevate Lutz, or will GM seek fresh blood? And if so, will anyone in or around the White House have a say in who that might be?