I Do Not Want Ed Whitacre Jr. to Run My General Motors

The US taxpayer owns 70% of GM. Why are we permitting someone with no knowledge of the automobile industry to seize control of GM on an interim basis?

The first head to roll was Rick Wagoner's and that came at the same time as the bankruptcy.  Now, Fritz Henderson is out as CEO of GM following failures to close deals to sell Saturn and Saab, leaving Ed Whitacre Jr. to appoint himself as the interim CEO.  The appointment seems about as ridiculous as Bob Nardelli's appointment at the helm of Chrysler.  Nardelli, of course, is gone, but the American public is asking why we cannot find competent leaders of our auto companies.

Whitacre somehow became Chairman of the Board in June when the government was anxious to make changes to the board as the company went into bankruptcy.  He seemed an odd appointment to the Board at the time.  A 68-year old retired billionaire who had retired from a 43-year career in telecom, Whitacre publicly admitted no knowledge of the auto industry but vowed to learn. 

To be clear, Whitacre had an average career as a telecom leader.  While he can be credited for rising from humble beginnings as a telecom engineer, Whitacre profited handsomely through guiding most of the post-ATT mergers and getting nice payouts on closing.  The culmination of his career came when he managed as CEO of SBC to quickly guide acquisitions of ATT Wireless, Bell South and then ATT.  As a leader, however, he was largely known to difficult and mechanical.  He is known throughout the telecom industry to have lacked imagination and to have appointed others, like Ralph De La Vega, now the CEO of ATT Wireless, who failed to seize the opportunities that the internet offered.  Instead of acting quickly to seize the opportunities that the internet offered and partner with content players, Whitacre tried to stymie the open access and net neutrality.

In his short tenure as Chairman of GM, Whitacre immediately took on a Lee Iacocca-like stunt where he tried to personally guarantee credibility of GM cars while walking through an area which was either a research lab or a factory (not clear).  The entire campaign seemed poorly thought out and was clearly timed so that Whitacre could take responsibility for cash-for-clunkers.

GM is a company which even in bankruptcy has great opportunities.  The world is full of great leaders who can help it to get there and the Obama Administration should be bringing them in.  Whitacre's record doesn't show that he is one of them.

Jason Rodgers
Jason Rodgers: Jason Rodgers was an experienced research analyst for a major bank prior to retiring to run his own investment consultancy in beautiful Lihue, Hawaii. Jason contributed articles to BestCashCow from 2008 to 2014.

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Comments

  • who cares

    December 02, 2009

    rant on.

  • Sam Cass

    December 02, 2009

    The choice seems okay to me and firing Henderson even better. Are you suggesting they bring in a car guy, the same car guys who screwed the company up in the first place. Whitacre understands complex organizations, unions, Washington, etc.

    Plus, he's only an interim CEO. His main job is to find a permanent CEO. It's about time CEO's are held accountable by the board. If they don't perform, they're gone.

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