General Motors ousted Fritz Henderson as chief executive on Tuesday night in a surprise move that will see the ailing US government-controlled carmaker get its second new boss in less than a year.
GM directors – who include Ed Whitacre, chairman and now interim chief executive, and David Bonderman, co-founder of private equity firm TPG – decided that the company would be better going into its initial public offering with a different chief executive, according to people familiar with the situation. “I don’t think anyone thought it [Mr Henderson’s tenure] was a disaster,” said one person. “This is a killer board.”
With about a year until the IPO, they felt they “could afford the disruption of finding an A-plus [candidate]”, the person added.
On Wednesday GM announced further a further shake-up of management at Opel that will now see its European division temporarily bereft of both a permanent chief executive and chief financial officer.
Opel said that Marco Molinari was stepping down as its chief financial officer, and that a successor would be “announced in due course.” GM said he had left GM ”to pursue other interests” as of December 1.
The division also said that Nick Reilly – head of GM’s international operations and Opel’s acting chief executive – and Walter Borst, vice president and treasurer of GM’s corporate finance arm, would join its supervisory board.
The two new appointees will replace GM veteran Bob Lutz, who the company stpped down “on his own volition” and Carl-Peter Forster, Opel’s former CEO, who quit last month after GM’s board vetoed a long-running deal to sell control of Opel to Canadian supplier Magna.
Mr Henderson’s resignation comes just five months after GM emerged from US government-supervised Chapter 11 proceedings and eight months after Washington’s car task force sacked his predecessor Rick Wagoner .
The Obama administration this time took pains to distance itself from Mr Henderson’s departure. “The decision was made by the board of directors alone,” said an official. “The administration was not involved in the decision.”
There was tension between Mr Henderson and Mr Whitacre, the former AT&T chairman who was appointed by the government, notably over whether Vauxhall/Opel, GM’s European division, should be sold.
But the ousting of Mr Henderson did not relate to one single disagreement. The new board decided a public GM would be better run by someone else, according to one person close to the situation.
A second person briefed on details of Mr Henderson’s departure said that GM’s bungled attempts to restructure Opel and sell Saab and Saturn also played a part.
“You could argue in each of those cases the fault didn’t lie with Henderson, but cumulatively they were all setbacks to their strategy,” this person said. Mr Henderson was “furious and embarrassed” when Mr Whitacre mobilised GM’s board to reject a proposed sale of Opel to Magna International at its previous meeting in early November.
Mr Henderson spearheaded GM’s efforts to sell Saab and Saturn and restructure Opel with European government aid, part of its effort to remake itself as a smaller, financially viable company.
Speaking to the Financial Times in September, he made it clear that he served at the board’s pleasure, and that restructuring GM’s core US operations around four brands and preparing it for an IPO that would see some of its government bail-out funds repaid was his main focus.
Mr Whitacre said that while “momentum had been building” at GM over several months on Mr Henderson’s watch, “all involved agree that changes needed to be made”.
“I have taken over the role of chairman and CEO while an international search for a new president and CEO begins immediately,” he said. “The leadership team ... are united and committed to the task at hand,” he said in a statement.
The US administration came under heavy criticism in March when it asked Mr Wagoner, the former chief executive, to resign. Critics complained that the government should not be choosing the management of what was then a public group.
When Mr Henderson was appointed to the job, analysts were divided on whether the Detroit veteran was the right man to break through GM’s ossified corporate culture and fixed views on its business, which led it to rack up tens of billions of dollars of losses and pushed it into bankruptcy this year.