GM management shuffle continues
Three days after the ouster of Chief Executive Fritz Henderson, General Motors Chairman Edward E. Whitacre Jr. announced a deeper management shake-up at the automaker, naming new presidents for the company’s North American, European and other international divisions.
The moves come as GM attempts an ambitious comeback that began in Bankruptcy Court this spring. The government-owned company has dropped or sought to sell the Pontiac, Saturn, Saab and Hummer brands, closed hundreds of dealerships and laid off thousands of workers.
But Whitacre has said the company must move more swiftly to right itself. “People need to work together to ‘unfreeze’ the organization,” Whitacre told employees on Friday, according to a copy of his talking points. “We need to show action.”
“I want to give people more responsibility and authority deeper in the organization and then hold them accountable,” Whitacre said in a statement.
Through its bankruptcy reorganization, the company freed itself of billions of dollars of crippling debt. It has also closed plants and pared operating costs in an effort to thrive even if automobile sales, which have plummeted during the recession, remain down.
But the company, which is 61% owned by the federal government, has not yet shown that it can turn a profit. Last month GM announced that it lost $1.2 billion in the first 83 days after it emerged from Chapter 11 bankruptcy protection.
The management changes announced Friday were accompanied by shifts in the company’s growing Asian enterprises. GM said it would transfer a 1% stake in its China car venture, Shanghai GM, to partner SAIC Motor. The companies began cooperating in 1997 when they formed Shanghai GM. GM will create another venture with SAIC to sell small vehicles in India.
“Changes in the worldwide economy have created new opportunities in emerging markets,” Hu Maoyuan, chairman of SAIC, said in a statement. “By leveraging our individual assets and those of our China joint ventures, SAIC and GM are in a strong position to introduce competitive products outside China that will satisfy the needs of consumers in India and other high-potential global markets.”
As part of the management shake-up, Mark Reuss, who oversaw GM’s operations in Australia and New Zealand, takes over leadership of the company’s key North American division. The division faces additional scrutiny because the U.S. government has invested $50 billion directly in the company.
Nick Reilly, currently head of GM’s international operations, will lead GM Europe. Tim Lee will replace Reilly and oversee Asia-Pacific, Latin America, Africa and Middle East operations.
Whitacre also tapped auto industry veteran Bob Lutz and former auto analyst Stephen Girsky as his advisors. Both will retain their positions at the company, Lutz as vice chairman and Girsky as a member of the board.
“Steve brings an understanding of the worldwide industry, Wall Street, and he knows a lot of people in the business,” Whitacre told employees, according to a copy of his talking points.
Whitacre, who is acting chief executive, is expected to give an update on GM’s business on Dec. 8.
Whoriskey writes for the Washington Post.
