Company ‘lifer’ who did not fit

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Fritz Henderson, who was a “lifer” at General Motors, was never a perfect match for the US government’s idea of a new broom at the carmaker they bailed out.

Inside GM Mr Henderson was widely regarded as the brightest executive and – as financial problems mounted last year – heir apparent to the then chief executive Rick Wagoner.

But he did not fit with Washington’s desire to change Detroit’s set way of doing things.

In an industry where many of the most admired chief executives, such as Fiat and Chrysler’s Sergio Marchionne and Ford Motor’s Alan Mulally, come from outside carmaking, many – including the US Treasury auto task force – wondered from the start whether Mr Henderson was the right man for the job.

Steve Rattner, who led the Obama administration’s car task force and asked Mr Wagoner to leave in March, revealed last month he and his colleagues had pondered whether an outsider would be a better bet.

“While nervous about whether Fritz could bring the change GM desperately needed, I was considerably more nervous about the likelihood of recruiting a thoroughbred CEO in the midst of the turmoil,” wrote Mr Rattner in an article for Fortune magazine.

Still, as GM’s chief operating officer and then CEO, Mr Henderson showed skill in helping to broker talks with bondholders, dealers and the United Auto Workers’ union on concessions needed to restructure in the run-up to its bankruptcy filing on June 1.

The task force stuck with Mr Henderson and, by July, with GM’s speedy bankruptcy accomplished to the opprobrium of some creditors but the applause of President Barack Obama and most of Detroit, he seemed to be the choice for the duration of government ownership and beyond.

When asked whether Mr Henderson would indeed stay, government officials tended to brush off the question. But with the appointment as chairman of Ed Whitacre, the former head of AT&T, the management dynamic changed.

It was Mr Whitacre rather than Mr Henderson who strode on to the nation’s TV screens. “I like what I found. I think you will too,” he told potential car buyers in commercials, encouraging them to choose a Chevy.

What Mr Whitacre apparently did not like were some of the executive decisions at the company.

On Mr Henderson’s watch, GM fumbled seriously at its European Opel/ Vauxhall business this year, where attempts to find an investor as the price of European government bail-out aid backfired badly.

GM’s board initially voted against his recommendation to sell control to Magna International before warming to a sale, then last month scrapping it again. The back and forth saw “a lot of infighting” between Mr Henderson and the board, one GM insider said.

In the end, Mr Henderson had to dispatch Nick Reilly, responsible for GM’s international operations, from Shanghai to Europe to finish the job of cutting 9,000 jobs at its European arm.

Efforts to sell Saab and Saturn brands to outside investors have fallen apart in the past two months.

With an initial public offering for GM expected in about 12 months, the board has to recruit a figure with sufficient standing among potential investors to float the company.

Mr Henderson, meanwhile, has found his run at the top shorter than he was led to believe. As Mr Rattner wrote last month: “Fritz ... expressed enthusiasm for his proposed promotion but asked that he not be called ‘interim’ CEO. ‘You can fire me any time you want, but at least give me a better chance to succeed,’ he said. We agreed.”

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