General Motors might be struggling, 60% owned by the US government and still losing money, but that hasn’t stopped a corporate coup from happening in the boardroom in the past few hours.
In fact, the losing money part and the government ownership may have helped bring on the coup, even though the Obama Administration said it had no part in the decision.
A statement from GM confirmed media reports that Fritz Henderson, the CEO put in to run the company eight months ago, has resigned, or more like it, been forced out by chairman Ed Whitacre, who takes over on a temporary basis.
Don’t believe that temporary line, as this Financial Times blog suggests, Henderson had a fight with the chairman.
A search for a permanent successor to Henderson “begins immediately”, Whitacre said in a statement released by GM. Directors accepted Henderson’s resignation today at a meeting in Detroit, Whitacre said in a statement.
Henderson’s time as CEO spanned GM’s slide into bankruptcy on June 1 and exit on July 10, backed by $US50 billion in US government money. Some reports suggest he was moving too slowly at making further changes at GM, especially compared with Ford where former Boeing executive Allan Mulally mortgaged the company three years ago to raise cash that has enabled Ford to survive, with new products and significant changes in the way it operates.
Whitacre, 68, is a former chairman and CEO of AT&T, the big US telco and was chosen to run a revamped GM board when the company left bankruptcy with the government as the majority owner. The reports suggest he wants to follow the Ford approach to change GM as quickly as he can.
The departure came after GM reported a 2% fall in car sales last month from a year ago, (but up 1% from October) while rival Ford reported flat sales on last year and on October. Ford sales of cars jumped 14% on a year ago. Sales of SUVs were down at Ford and GM.
Some news reports say the dispute between the two was over the GM board decision not to sell its Adam Opel subsidiary in Europe (it’s based in Germany) to a group including a Canadian car-parts maker and a Russian financial group.
As well, the sale of the Swedish car maker, Saab, has fallen over and GM is now trying to find a new buyer, and if that fails, could be forced to shut Saab, at an unknown cost. GM yesterday gave a deadline of the end of this month for a new sale of Saab.
Henderson did not issue a statement and Whitacre issued a statement, but didn’t answer questions from US media.
To further emphasise the difference with GM, Ford, which avoided bankruptcy this year, said it would increase production in 2010 in anticipation of greater demand and plans to build 58% more cars in the first quarter of next year compared with the first three months of 2009 (which is when it slashed production to try and staunch the bleeding).
GM didn’t mention its sales outlook.
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