“I never cease to marvel at how many notables now wish to anoint themselves as the change agent who finally created the now-successful General Motors”, writes Bob Lutz in a Forbes opinion piece entitled How Ed Whitacre Saved GM In Just 10 Months, And Other Fables published in February. Lutz’s piece presents a first-person rebuttal of the notion that ex-GM Chairman and CEO Ed Whitacre had a significant impact on GM as described in the ex-CEO’s book American Turnaround, and makes for a wonderful read.
Having presented the idea that Whitacre wasn’t all that and a bag of potato chips, Lutz then goes on to list President Obama and “his hand-picked fix-it team” of Steve Rattner, Ron Bloom, and Harry Wilson as other supposed examples of GM’s change agents. Lutz then realigns his focus on Whitacre, describing Big Ed’s time at the company as “wandering around uncovering employees who were insufficiently entrepreneurial, cautious or didn’t have enough “can-do” spirit.” And that’s just the opener, which means that it only gets better from here.
According to Lutz’s succeeding words, Whitacre solved each area of GM’s inefficiency by spreading “the gospel until all of GM’s hundreds of thousands of global employees got the word and quickly set about creating compelling new products, thus rocketing the company to financial success.” Lutz follows that marvel up with another one just as good, saying that he has an ocean front property in Nebraska to discuss with the reader if he actually believes any of Whitacre’s fables. He then points to two things that truly saved and transformed GM:
The first was a government-orchestrated and funded financial restructuring that equipped the automaker with “a balance sheet that didn’t drain away all of the operating profit.” Lutz writes that the Obama administration, along with Rattner, Bloom, and Wilson, should be credited for that.
The second is GM’s product renaissance, one that actually took place way before anyone at GM encountered Mr. Whitacre as the head honcho. Lutz points to the “entirety of the Chevrolets, Buicks, GMCs and Cadillacs that were launched to huge acclaim in ’09, ’10, ’11 and ’12”. These “were conceived, designed, engineered and sent on their three-to-four year journey to introduction by the “old”, pre-bankruptcy GM team. You know, the incompetent, slow, clueless, unimaginative bunch led by Rick Wagoner, Fritz Henderson and [Lutz himself]. [They] did every one of those winning products for which some 90-day wonders would now like to be retroactively credited.”
But in Lutz’s now-familiar fair and honest nature, he adds that Whitacre did add some value: “He fought for speed and hated complexity”, pointing to Big Ed’s tenure at telecom giant AT&T, which isn’t “generally viewed as a paragon of lightning-fast agility”, something that “would suggest that it was a prolonged battle with an uncertain outcome.” Lutz then goes on to recall Ed’s “most notable contribution to design” — a remark made during a Cadillac styling session: “Professing to know nothing about cars (true), he nevertheless opined that Cadillacs had the look of “old-fashioned Choo-choo trains”.”
Lutz and company “…digested that opaque bit of input and elected to stay with what [they] had.” The jet-flying ex-exec wraps up his entire piece by crediting Whitacre with being a good leader who made an incremental improvement to the company. “But to suggest that he is the architect of GM’s current success is a bit like crediting the rooster with making the sun come up.”
The GM Authority Take
That is just the “Maximum truth-be-frankly-told” Bob Lutz we’ve come to know and love. The piece is full of juicy, delicious, and mind-blowing material (at least for GM enthusiasts) that challenges the notion that Mr. Whitacre was GM’s savior in his brief ten-month-long tenure as the company’s chief. And for that, we thank Bob for the clarification.
But that’s not to say that Mr. Whitacre didn’t contribute. From what we’ve read of Big Ed’s book, he cured more than a handful of managerial- and executive-level problems that were hindering The General, such as Fritz Henderson’s seeming inability to deliver a tangible restructuring plan of the automaker’s top-level management team; keep in mind that we have yet to hear from Mr. Henderson himself, who now serves as chairman and CEO of SunCoke Energy and probably has better things to do with his time… after all, he’s the only one of the trio who is not retired.
And with that, we can’t help but notice that this Old GM-New GM-transitionary-GM leadership trifecta is turning into a C-level pissing match the likes of which we haven’t seen since the ousting of a few GM executives in the early 90s. Our only question is, who will be next to air the dirty laundry?