As you've probably heard by now, General Motors fired its CEO.
This is a big deal. In fact, when the long history of GM is finally written, this decision may well prove more momentous than the company's trip through bankruptcy earlier this year.
In deciding to part ways with Fritz Henderson, and replace him with Chairman Ed Whitacre on an interim basis, the board -- a group of high-powered outsiders installed in July -- didn't just say goodbye to a 25-year GM employee who had been the company's CEO for all of seven months.
I think they fired a whole culture.
The real problem with Detroit
As I (and lots of other industry watchers) have been saying for awhile, the biggest problem with GM all along hasn't been its relationship with the United Auto Workers, or the economy, or gas prices, or exchange rates, or any of the myriad of other things that often get blamed (especially by GM managers) for the company's woes.
The problem has been a managerial culture that seemingly refuses to acknowledge GM's real issues with product and -- more importantly -- the company's diminished stature in the automotive world.
GM doesn't own anything like half the U.S. market anymore, and it hasn't in decades. But for years, a long line of GM chief executives acted like the company's biggest problems were temporary and due to outside forces, and a return to outsized market share was just around the corner.
Sure, they paid lip service to problems with product quality, and even made some gains. In recent years, the company even took some steps to reduce dealer count and manufacturing capacity. But the culture never really changed, not even after bankruptcy, downsizing, and global humiliation. And Fritz Henderson didn't look like the guy to change it.
Apparently, that's how it looked to GM's board, too. According to a report in the Detroit News, "sources familiar with the board's thinking said directors were frustrated by the slow pace of change at GM and Henderson's apparent inability to transform the corporate culture."
So frustrated that they apparently couldn't wait another day -- GM is showing new products at the Los Angeles Auto Show this week, and this announcement will throw a wrench into the company's meticulous PR plans, which is normally a major corporate no-no.
But for the board, and those inside GM who really do Get It, it must have been maddening to watch Alan Mulally make exactly the right kinds of changes at Ford
They've got a chance to get it right now.
Copying a better idea
Ford used to advertise its "better ideas," but the best idea they've had in decades was hiring CEO Alan Mulally and empowering him to completely overhaul the company. Ford still has a long way to go, but it's made massive changes, it's hitting on all cylinders, and its future is looking bright.
GM clearly needs a touch of that magic. Of course, GM has never been afraid to copy a good idea. After Ford rocked the auto world with the megahit Mustang in the spring of 1964, GM rushed the me-too Camaro and Firebird into production. GM knew a good bandwagon when it saw one, and it knew that there was room for all of those products to be successful.
Now, GM needs to copy Ford again, and come up with their own Mulally. But it won't be simple. Mulally is often held up as an auto industry outsider, but in his prior role at Boeing
Chairman and fill-in CEO Ed Whitacre said yesterday that GM will conduct an "international search" for a new CEO, and they may well have to scour the world. Finding someone with Mulally's quick intelligence and calm fearlessness who is willing to take the job will be hard enough. Finding a similar combination of outsider-ness and applicable experience will be an enormous challenge.
But that's nothing compared to the challenges that await the person they eventually hire.
