Henderson Said to Have Flunked Review on Fixing GM
General Motors Chief Executive Officer "Fritz" Henderson resigned after the board of directors concluded he hadn't done enough to fix the finances and culture of the biggest U.S. automaker, a person familiar with the matter said. On Tuesday, the board gave Henderson, 51, a 100-day review on his performance since GM's bankruptcy exit, said the person, who asked not to be identified because the discussions were private. While Henderson had made progress, it wasn't enough, said the person, who didn't have specifics about the evaluation. Chairman Ed Whitacre took over on an interim basis, giving the former AT&T Inc. CEO and chairman a chance to put his stamp on GM and pick a permanent chief. Henderson, a 25-year GM employee, became CEO in March when President Barack Obama's auto task force asked Rick Wagoner to leave as part of a U.S. rescue. "They're looking to rebuild the company in a completely different form," Maryann Keller, president of consultant Maryann Keller & Associates, told Bloomberg Television. "They're looking to bring in someone who has a completely different perspective." The search for a new CEO "begins immediately," Whitacre said in a statement released by GM after today's board meeting in Detroit. Revenue surprise, further cash drainsWhitacre, 68, was selected by the auto task force to run a revamped board when Detroit-based GM left Chapter 11 with the government as majority owner. The personnel decisions were made by the board, not the Administration, a U.S. official said. Henderson's tenure spanned GM's slide into bankruptcy on June 1 and a July 10 exit, backed by $50 billion in federal aid. He surprised analysts last month when GM reported generating $3.3 billion in cash in the third quarter and said it would begin repaying federal loans early. At the same time, he said GM lost $1.15 billion and would consume cash again this quarter. Whitacre told reporters today in Detroit that Henderson "has done a remarkable job leading the company through a time of challenge, and momentum has been building over the past several months, but we all agreed changes needed to be made." He didn't take questions or elaborate on the executive shake up. That assessment differed from the one Whitacre had given in a Nov. 10 interview at his office in Texas, when he said the directors backed Henderson, whose posts at GM included serving as chief operating officer and chief financial officer under Wagoner. "We have some momentum now, there's a lot of enthusiasm," Whitacre said then. "We're all cautiously optimistic. The board is fully behind Fritz; he's working hard." Whitacre said he will now be working at GM's Renaissance Center headquarters in Detroit on a "daily basis." Pressure to reform and take GM publicGM has formed a search committee to recruit a new CEO, said Chris Preuss, a company spokesman. The automaker notified U.S. officials about Whitacre's ascent and Henderson's departure, Preuss said. Vice-Chairman Robert Lutz will speak at the Los Angeles Auto Show Wednesday in place of Henderson, Preuss told reporters in Detroit. Henderson was under pressure to return GM to profit after more than $88 billion in losses since the end of 2004. He was expected to change the automaker's culture, prepare GM to start repaying loans, and hold a public stock sale by the second half of 2010. GM reported a $1.15 billion third-quarter loss on Nov. 16. With Henderson in charge, GM has had deals to sell its Saturn and Saab brands fall apart. The automaker also decided last month to keep the Opel brand, rather than sell it as planned. GM is cutting its U.S. brands from eight to four, keeping the Chevrolet, Cadillac, Buick, and GMC brands. In addition to ending its affiliation with Saab, GM is winding down Saturn and Pontiac and has a deal to sell Hummer to Sichuan Tengzhong Heavy Industrial Machinery, based in Chengdu, China.