Fritz Henderson started off on the wrong foot with the post-bankruptcy board of General Motors Co. -- and failed to win its confidence, according to a book by Steven Rattner, chief of the Obama auto task force. The following are selections about the downfall of CEO Henderson from Rattner's Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry.
On Aug. 3, 2009, after General Motors Co. emerged from bankruptcy, incoming and holdover board members met the Obama auto task force before the first official board meeting. The group was briefed by Harry Wilson, a task force staffer working on GM.
Harry began the third section [of the briefing] by laying out our scathing opinion of GM's culture in bullet points that pretty much spoke for themselves. "Insularity," which Harry called "The GM Way," came first. Then "lack of accountability," followed by "[lack of a] sense of urgency," "need for more change agents," and a "culture of losing." "If you really think about GM and where they are coming from," Harry said as he pointed to a line about consistent market-share losses for thirty-three years, "they've mostly lost. Most of these managers have never won." He also knocked the company for bad supplier relations, for GMAC's misadventures in subprime mortgages and for the lack of "green" cars on the road.
The room was quiet. Some old board members were shifting in their seats. [Former interim Chairman] Kent Kresa and a few others nodded when Harry lambasted GM's bureaucracy and inability to make fast decisions. [Chairman Ed] Whitacre, rarely one to speak much, occasionally murmured, "That's right."
Harry also harped on the need for change agents at GM, people from inside or outside who would shake the place up.
"I get it. The top management is not good," interrupted Patricia Russo, the ex-CEO of Alcatel-Lucent, who was new to the board. "But do you see that spark somewhere?"
Harry paused for a long time and volunteered a name: "Bob Lutz."
"I don't think he's that good," objected Steve Girsky, the former Morgan Stanley analyst who now occupied the UAW seat on the board.
"We like that he actually knows product," said Harry. "But we need more like him that are younger."