January 27, 2010
A disastrous move for General Motors.
By Peter M. De Lorenzo
(Posted 1/25, 6:00PM) Detroit. The news that “Big Ed” Whitacre would shed his “interim” title and become GM’s new CEO was no surprise, or at least it shouldn’t have been for those in this town and this business who had been paying attention.
It was clear to me from the get-go that GM’s Board wasn’t exactly beating the bushes to find the “right” person for the job. Yes, GM’s recruiter contacted several potential candidates, but there was no real effort to go after the kind of game-changer that the company so desperately needed. After all, there’s only one Alan Mulally walking around, and quickly realizing that they couldn’t duplicate his perfect combination of outstanding leadership ability and solid, engineering-based credentials – or lure him away from Ford – the search became internally-focused, as in, “Why don’t we just give ‘Big Ed’ a shot?”
I’ve said it before and I’ll say it again - don’t allow yourself to be confused or fooled by “Big Ed” Whitacre, because if you’re looking for something substantive beneath the veneer of his “aw, shucks” demeanor and carefully managed “I’m just a nice guy trying to help this country out” earnestness - the kind of something that would warrant the CEO-level credibility and gravitas he instantly expects to be anointed with in this business – well, you’re going to be searching for a long, long time, because there’s simply no “there” there.
If running a car company hinged on being approachable and saying all of the right things, then just about anyone could do it. And if that truly was the extent of the credentials needed, then “Big Ed” would do just fine.
Oh, if it were that easy.
But when you have a company that was once one of the icons of America’s industrial fabric, one that has subsequently been forced - embarrassed and humiliated - into bankruptcy and is in the midst of clawing and scraping its way back to respectability and credibility, being approachable and a nice guy counts for exactly nothing and is the very last thing GM needs.
Carefully scroll through Whitacre’s tenure at AT&T, and it won’t take much to discover that he accomplished little. Sure, he went on an acquisition spree – “it’s all about scale and scope” as he used to say when acquiring baby bells and putting them together to build the “new” AT&T, but the net-net of all of his business meanderings was a company that delivered a very mediocre financial performance. (And mediocrity was indeed bliss in this case as Whitacre walked away from AT&T with an exit package worth around $160 million.)
Not that Whitacre’s career gives him the least bit of leg up on understanding anything about the automobile business, or GM’s place in it for that matter. And any analysts out there who are suggesting that there are similarities between Whitacre and Alan Mulally - because of Whitacre’s “outsider” credentials - and that he is exactly the kind of guy GM needs right now are simply delusional.
The differences between Mulally - an engineer who was intimately involved in the intricacies of leading a multifaceted team in the mass production of highly complex machines at Boeing - and Whitacre - a corporate bureaucrat enamored with the “art of the deal” - are so pronounced that any comparisons are simply misguided and wildly inappropriate.
Combine that with the fact that Whitacre is an arrogant know-it-all who has a difficult time listening and who doesn’t cotton to being corrected when wrong, and you have a recipe for disaster. After all, it is one thing for a Bob Lutz to give-off more than a hint of arrogance – because he’s probably forgotten more than the up-and-coming executives of the “new guard” will ever accumulate in their lifetimes – but for “Big Ed” to harbor those kinds of tendencies? Not Good.
GM’s present situation cries out for a true leader. Preferably an industry veteran who has - if not direct experience in the business of designing, engineering, and building cars and trucks – a background in heavy industry. Someone who has been directly involved in the business of manufacturing real, substantive things. Not air. And not “deals.” But making products that actually contribute to this country’s manufacturing base.
This leader has to eat, sleep and breathe the nuances of the business and understand where GM once was, how far it has fallen, and what’s needed in order to get it back on track.
And this leader would do well to display a take-no-prisoners attitude and a willingness to do anything and everything in order to slap GM out of its corporate slumber, blow-up all of the hoary constituencies, pull the perennially and notoriously weak marketing function up by its lapels, and finally force the rest of the organization to be worthy of representing the growing number of excellent products the company is bringing to market.
“Big Ed” Whitacre isn’t the guy. Not even close, in fact. Armed without an innate understanding of this business - or even the faintest of notions as to what it’s all about - Whitacre’s “go along to get along” life up until now as a corporate bureaucrat and deal maker is simply irrelevant to the task at hand.
“Big Ed” Whitacre is simply the wrong guy, at the wrong time at the wrong company. The True Believers at GM deserved better. The American taxpayers deserved better. And this business deserved better.
That’s all I got.
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