Fritz Henderson out as CEO of GM


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We’ve been hearing rumblings for a while that board chairman Ed Whitacre was determined to change the culture at GM, and that everyone, including CEO Fritz Henderson, would be judged by a very high standard. BusinessWeek had an excellent report on this several months ago.

We learned today the Henderson has been fired by the board, and that Whitacre will take over an interim CEO. That’s quite a shake-up, and I’m sure we’ll learn more in the coming days. It’s either a sign of disarray at the new GM, or perhaps a sign that the new board is determined to set a new standard and see results.

They will almost certainly look outside of the company for the next chief. Tapping an upcoming star from the Ford stable isn’t a bad idea. Mark Fields or Jim Farley would be interesting and aggressive moves by the new GM board. Let the speculation begin!

  

Hummer might move to Tennessee

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Fritz Henderson said today that the deal to sell the Hummer brand is proceeding.

“The purchaser for Hummer is going through the approval processes in China,” Henderson said. “We’re cooperating with them. The purchaser is professional, well-advised and has done a huge amount of work. We’re supporting the process. Our expectation is that this deal can get done.”

Sichuan-based Tengzhong, a Chinese firm that builds heavy-duty commercial vehicles, is in the process of buying Hummer. Earlier, in a live Web chat on the GM FastLane blog in early June, Henderson said Tengzhong “offered the best overall alternative, and we did not have (a) broad portfolio of other buyers.”

Meanwhile, Hummer is checking out locations for its new headquarters.

Hummer, the sport utility vehicle manufacturer in the process of being spun off by General Motors, has had early discussions with Williamson County officials about relocating the company’s headquarters here, officials said.

In late June, Hummer Chief Executive Officer Jim Taylor said in an interview the company was examining the areas around Detroit as well as Nashville for the possible site of its new corporate headquarters.

Nick Richards, Hummer spokesman, confirmed this week that the automaker has had preliminary discussions with Williamson County economic development officials.

“We’ve had some initial discussion with folks in Williamson County but it’s too early to say what our plans are,” Richards said. “Right now we’re looking at all viable options for the future Hummer headquarters.”

Matt Largen, county economic development director, confirmed the recent discussions though he declined to provide details.

Chinese manufacturer Sichuan Tengzhong Heavy Industrial Machinery Co. is slated to buy the General Motors unit in a deal some expected to be finalized later this year. That deal still needs a final sign-off from the Chinese government and recent reports say China’s state planning agency might reject the deal because Hummer doesn’t fit Beijing’s gas-conservation goals for vehicles.

Moving away from GM means Hummer must find separate corporate offices.

It will be interesting to see what happens to this once-hot brand that represents many of the problems facing the U.S. auto industry which focused too much on gas-guzzling vehicles. In an era of higher gas prices and a major recession, do vehicles like the Hummer H3T pictured above have a future? Of course it can possibly survive as a niche brand, but it will be interesting to see how the brand evolves under new ownership in this new environment.

  

The “new GM” is here

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The new General Motors Company has emerged from bankruptcy, and CEO Fritz Henderson is making plenty of changes.

Fritz Henderson’s remarks this morning on General Motors’ speedy exit from Chapter 11 bankruptcy were a pretty sweeping condemnation of the old GM’s culture and structure.

His decision to sweep away entire layers of regional management, and eliminate the entire group running the North American business and taking charge himself, suggest there was a lot of redundancy.

Of course, the fact that GM is selling its Opel operations in Europe and will only retain a minority stake makes a coherent global structure more difficult. But Mr Henderson is making the best of a bad job by giving Nick Reilly the job of running international operations from Shanghai.

The theme of reducing the amount of time spent talking and prevaricating in meetings is common to GM and Ford, where Alan Mulally has made much of his effort to speed up decision-making.

Henderson also announced a new partnership with eBay to sell cars by auction online. Nobody seems to know precisely how this will work, but the symbolism is clear – GM will be innovative in the future with respect to all aspects of the car business.

Bob Lutz has also decided to stay on and postponed his retirement.

In addition to hailing the closure of the deal, chief executive Fritz Henderson outlined several changes to GM’s management, including the “un-retirement” of vice chairman Bob Lutz to oversee most creative work at the company, including global design, advertising and communications.

Lutz is a great car guy, so this is a good thing, but I wonder about putting him in charge of marketing. GM’s marketing in the past has been horrible. They wasted huge dollars on old-school sponsorships, and the have not been a leader online. GM has stated that it is more committed to online advertising, but it remains to be seen how much an old-school guy like Lutz understands new media.

  

Judge clears the way for GM to emerge from bankruptcy

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They did it. Most of the experts said the government could reorganize GM through bankruptcy in such a short time, but now a judge has cleared the way and the “new GM’ will emerge as a new company.

The path is now clear for General Motors to leave bankruptcy protection in record time as a leaner company that is better equipped to compete in a brutal global auto market.

On Thursday, a judge’s order allowing GM to sell most of its assets to a new company went into effect, despite a last-minute appeal by plaintiffs in a product liability case.

GM spokeswoman Julie Gibson said U.S. Bankruptcy Judge Robert Gerber’s order became effective at 12 p.m. EDT. GM lawyers are working on paperwork to close the sale as quickly as possible, after which GM would leave bankruptcy protection.

GM CEO Fritz Henderson will hold a news conference in Detroit Friday morning to explain executive cuts, management changes and the company’s plan to make money by emphasizing quality and fuel economy. He will be joined by Edward Whitacre Jr., who will lead the board of GM.

Once the world’s largest and most powerful automaker, the “new GM” will become government-owned, but leaner and greener, cleansed of debts and burdensome contracts that nearly dragged it into liquidation. But the new company faces tough international competition and the worst auto sales market in more than 25 years.

John Pottow, a University of Michigan Law School professor who specializes in bankruptcy, said opponents of the sale had little legal recourse to block it because their issues were shot down by higher courts in Chrysler’s bankruptcy case.

“It’s done,” Pottow said. “I knew they were dead as soon as the Chrysler case was decided.”

He expects GM to close the deal and emerge from bankruptcy on Thursday in 39 days, a record for a company its size, he said. GM spokesman Tom Wilkinson said he could not give a time frame for when the sale will close.

The “old GM” will wind down all the assets that won’t be going over to the new company. It will be interesting to see what happens to all the old GM brands.

  

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