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As the Crankshaft Turns…

18th December 2009

GMC gets its 3rd General Manager in a month…GM announces the “small car” it will build at its Orion Township plant…Obama signs dealer arbitration bill…GM speeds development now that it actually has cash to spend.  All this and more on today’s episode of As the Crankshaft Turns.

As The Slandy Report told you, Mike Richards, hired to lead Buick-GMC, left after only 8 days on the job.  Well, now Buick-GMC has a new leader.  Brian Sweeney, formerly Buick-GMC sales manager, takes over the division after months of turmoil.  The division is desperate for sales, and chairman Ed Whitacre has said that executives will not have long to show results.  Sweeney has been replaced by Jennifer Costabile, 47, a 25-year GM veteran.

In May, GM announced after a competition between 3 plants, that it would build an unnamed new small car at its Orion plant in suburban Detroit.  The unnamed has now been named.  The next generation 2011 Chevy Aveo will be built at the plant next year.  The present Aveo is made in South Korea, and the next version was supposed to be made in Mexico or China.  A big win and a new small car for the US!!

President Barack Obama on Wednesday signed legislation that would give rejected GM and Chrysler dealers access to neutral arbitration if they want to be reinstated, kicking off a a 6½ months arbitration process.

GM and Chrysler now have 30 days to send letters to the owners of about 2,150 rejected dealerships informing them of their rights under the new law and spelling out the reasons that their franchise agreements were terminated.

With Obama’s signature, the eliminated dealerships have 40 days to give notice that they intend to seek arbitration.

And finally, GM’s Bob Lutz announced that the General is pulling ahead many product programs now that it has the cash to fund them.  Lutz specifically mentioned the next-gen Chevy Malibu, which has been pulled ahead by a year.  It will now go on sale in 2 years, instead of 3.  Lutz also said all of GM’s future cars will have a chrome strip surrounding the side window glass.  “Nothing adds perceived value to a car faster than that chrome surround around the side glass because it is a hallmark of German and Japanese luxury products,” said Lutz.  “If you skimp on $50 of chrome, you are reducing the customer’s perceived value of the car by $500 or $600,” he said.
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Brent Dewar

Brent Dewar

Susan Docherty, newly minted VP of sales service and marketing, lost one of her key lieutenants today.  Brent Dewar, VP of Chevrolet, and one of Docherty’s direct reports under last week’s changes, announced that he will “retire” effective April 1, 2010.  In the meantime, he will act as an advisor to Mark Reuss as he transitions to his new role as president of North America.

One can assume that Dewar’s “retirement” wasn’t planned in advance and was the result of the latest management changes because he was only recently repatriated to the US and because Docherty had reported to Dewar in a previous position.  It seems that Dewar didn’t think he should be reporting to Docherty and/or Reuss – maybe he thinks he should have been given the job that Docherty got.  Or maybe Dewar was seen as a holdover of the “old GM” regime, having spent 31 years at the General.  Maybe Reuss and Docherty told him that maybe he wasn’t going to fit in at the “New” GM.

Jim Campbell

Jim Campbell

Replacing Dewar is Jim Campbell, who will be moving to Chevrolet from his position as General Manager, Fleet and Commercial Operations.  Before running GM’s Fleet and Commercial Operations, Campbell held various positions in field sales, retail incentives, marketing and customer relationship management.  He has played important roles in many product launches including the Chevrolet Impala, Monte Carlo, Colorado and Corvette.

Jim Bunnell will be responsible, in the interim, for Fleet and Commercial Operations until a replacement has been named to replace Jim Campbell.

In other General Motors news, Michael Richards, who was just named Buick-GMC general manager December 1, seems to be out.  Although GM has not announced this (and will not comment), there are reports in the Detroit Free Press and Bloomberg News that Richards is gone.  Richards, a former Ford marketing executive, had a reputation for treating employees poorly.  Maybe his new bosses heard about that reputation and decided that he didn’t fit with their vision for the future.  Maybe a little more due diligence would have been smart.

That’s what I think – how about you?  Please leave your comments below.

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Last week, GM’s new (and third one this year) CEO Ed Whitacre announced major leadership changes, moving swiftly to put a management structure in place that he and the board feel will better position GM for continued growth and profitability.  Gone is the change that Fritz Henderson made, splitting sales from marketing.  Sales and marketing are now recombined under Susan Docherty, newly appointed as VP of Vehicle Sales, Service & Marketing (“VSSM”, which also includes Service Parts and OnStar).

Bob Lutz, who was put in charge of marketing and public relations in the previous shakeup, is going back to the product side, where he will be a special advisor to Chairman and CEO Ed Whitacre on product and design.

So where does this leave Tom Stephens, who assumed the title of vice chairman of global product development when Lutz went to marketing?  Tom must have been thinking that Pete Townshend had taken over GM.  “Meet the new boss, same as the old boss…”  Whitacre tossed a bone to Stephens by adding purchasing to his responsibilities, but if this newest realignment doesn’t work, Stephens won’t get fooled again.

Perhaps the biggest change of all, though, is the reappearance of a president of North America, a job that went away earlier this year when Troy Clarke “resigned”.  Mark Reuss, who only recently was repatriated to North America as VP of Engineering, is appointed President of North America.

Aside from the obvious issues with leadership churn, I think these changes mostly make sense.  Sales, service and marketing belong together, and it makes sense to have somebody in charge at the North American level.  When the General dismantled North America, it tried to globalize everything, including marketing.  Sales and marketing, by their very nature, are not global.  They are regional or local.

More than anything else, the new “temporary” CEO is promoting people into positions of power that will have loyalty to him, not the previous regimes.  And it sends a signal to the rest of the company that he is serious about accountability in the organization going forward.

That’s what I think – how about you?  Please leave your comments below.

There were other changes as well.  See the full announcement below.

To improve accountability and responsibility for market performance in North America and around the world, several key leadership changes were announced today by GM Chairman and CEO, Ed Whitacre.

“I want to give people more responsibility and authority deeper in the organization and then hold them accountable,” Whitacre said.  “We’ve realigned our leadership duties and responsibilities to help us meet our mission to design, build and sell the world’s best vehicles.”

Mark Reuss is named president of GM North America.  Reuss was briefly vice president of Engineering after leading GM’s Holden operations in Australia in 2008.  Reporting to Reuss will be Susan E. Docherty, who is appointed vice president, Vehicle Sales, Service and Marketing operations.  Also aligned under the new North American group will be Diana D. Tremblay, who is named vice president, Manufacturing and Labor Relations.  Tremblay was most recently vice president of Labor Relations.  Denise C. Johnson is named vice president, Labor Relations.  Johnson was most recently vehicle line director and chief engineer for Global Small Cars.

Nick Reilly is named president, GM Europe.  Reilly has been leading the restructuring efforts in Europe with the Opel/Vauxhall operations and will leave his role leading GM International Operations.

Tim Lee is named president of GM International Operations, overseeing GM’s Asia-Pacific, Latin America, Africa, and Middle East operations.  Lee was most recently group vice president, Manufacturing and Labor Relations.

Bob Lutz remains vice chairman and will act as advisor on design and global product development.

Thomas G. Stephens remains vice chairman of Global Product Operations, and will now take on global purchasing in his organization, which will continue to be lead by Robert E. Socia, vice president, Global Purchasing and Supply Chain.  Karl-Friedrich Stracke is appointed vice president, Engineering, reporting to Stephens.  Stracke was most recently executive director of Engineering.

J. Christopher Preuss, vice president, Communications, will now report to Whitacre; he previously reported to Lutz.

The balance of the direct report staff remains unchanged and includes CFO Ray G. Young;  John F. Smith, vice president Corporate Planning and Alliances;  Terry Kline, vice president IS&S;  Mary T. Barra, vice president Human Resources;  Mike Millikin, vice president of Legal;  and Ken W. Cole, vice president Government Relations and Public Policy.

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GM CEO Fritz Henderson Resigns

1st December 2009

Former GM CEO Fritz Henderson

Former GM CEO Fritz Henderson

Fritz Henderson, who took over as GM’s CEO when Rick Wagoner was relieved of his position in March, resigned effective today, following the monthly board of directors meeting.  GM Chairman Ed Whitacre will assume the title of CEO while GM conducts an international search for a permanent replacement.

Henderson, 51, was a GM lifer, who had been with GM for 25 years, and has been hurt by that image. The press and government have portrayed him as a competent manager and finance executive, but one who would not provide the kind of outside influence that GM needs. GM spokesman Chris Preuss denied any government involvement in the decision, calling it a “board decision.”

GM issued the following statement:

At its monthly meeting in Detroit today, the General Motors Board of Directors accepted the resignation of Fritz Henderson as Director, President and CEO of the company.

Fritz has done a remarkable job in leading the company through an unprecedented period of challenge and change.  While momentum has been building over the past several months, all involved agree that changes needed to be made.  To this end, I have taken over the role of Chairman and CEO while an international search for a new president and CEO begins immediately.  With these new duties, I will begin working in the Renaissance Center headquarters on a daily basis.  The leadership team – many who are with me today – are united and committed to the task at hand.

I want to assure all of our employees, dealers, suppliers, union partners and most of all, our customers, that GM’s daily business operations will continue as normal. I remain more convinced than ever that our company is on the right path and that we will continue to be a leader in offering the worldwide buying public the highest quality, highest value cars and trucks.  We now need to accelerate our progress toward that goal, which will also mean a return to profitability and repaying the American and Canadian tax payers as soon as possible.

In closing, I want to once again thank Fritz Henderson for his years of leadership and service to General Motors; we’re grateful for his many contributions.  I look forward to working with the entire GM team as we now begin the next chapter of this great company.

Henderson’s bio, according to Wikipedia:

Henderson was born in Detroit, Michigan. Henderson is a 1976 graduate of Lake Orion High School in Lake Orion, Michigan. He holds a Master of Business Administration degree from Harvard Business School and a bachelor’s degree in business administration from the University of Michigan’s Ross School of Business. During his time at Michigan, Henderson pitched for the University of Michigan Wolverines baseball team.

Since joining GM in 1984, he held a number of positions with the company until 1992 when he became GMAC group vice president of finance in Detroit.

From 1997 to 2000, Henderson became GM vice president and managing director of GM do Brasil covering GM operations in Brazil, Argentina, Paraguay, and Uruguay. Here he was successful in introducing small, inexpensive cars such as the Celta subcompact and the Meriva microvan, both produced in Brazil.

In June 2000, he was appointed group vice president and president of GM-LAAM (Latin America, Africa and Middle East) and in January 2002, he moved to Singapore as president of GM Asia Pacific where he was successful in expanding operations in Korea and China.

In 2004, Henderson was appointed chairman of GM Europe, based in Zurich, Switzerland, where he undertook substantial restructuring including significant reductions in jobs.

After becoming vice chairman and chief financial officer in January 2006, in March 2009, he became GM president and chief operating officer. At the time, the Financial Times quoted him as saying: “Being part of a turnround at GM when, frankly, many people don’t think it can be done, is exhilarating, if you like challenges. I have never had a dull day in my time at GM.”

When GM exited bankruptcy, Henderson said, “This is an exciting day for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers. We deeply appreciate the support we’ve received. We’ll work hard to repay the trust, and the money, that so many have invested in GM.”

In August 2009, Henderson refused to move the economically priced, rear wheel drive, Pontiac G8, to another GM marque after slashing the brand.

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