At GM, pressure is on for No. 2 man

By KATIE MERX

He’s one of the few auto executives to oversee operations in every part of the world.

DETROIT — The pressure is on for General Motors Corp.’s newly appointed president and chief operating officer Frederick (Fritz) Henderson to drive profits at the global corporation that recently reported its worst earnings ever.

But the Detroit native likes pressure. He seeks it out.

“I love doing things other people think can’t be done,” Henderson likes to say.

And those who know him and work for him say he’s good at accomplishing the difficult.

But the hurdles that lie ahead of Henderson, 49, who is now at the day-to-day helm of GM, are expected to be at least as difficult to clear as those the company already has crossed. As the automaker’s No. 2 executive, he is seen as the most likely successor someday to Chairman and CEO Rick Wagoner, who is 55.

Henderson was a key player in last year’s labor talks with the UAW. He helped to forge a landmark, cost-cutting contract that is expected to save $5 billion in labor costs by 2011. He also was crucial to resolving a labor impasse at Delphi Corp. last year.

And, although he has had a hand in the automaker’s North American turnaround that has sliced $9 billion in annual fixed costs since 2005, he has been unable to turn the massive corporation into a profitable, positive-cash-flow business that is free of accounting embarrassments.

The automaker recorded a $38.7 billion loss in 2007. While it was primarily a paper loss driven by a tax accounting rule, one of the reasons GM took the write-down was because it was unable to forecast with certainty a return to profitability. The 2007 loss came on top of numerous restatements by the corporation’s once-vaunted accounting and finance division.

Still, there is an exceptional level of confidence inside and outside of GM that if anyone can right this business today, it is Henderson.

Henderson is one of the few automotive executives to have presided over operations in every region of the world.

He was president of GM’s operations in Asia Pacific; Europe; and Latin America, Africa and Middle East before Wagoner asked him to come back to Detroit to serve as chief financial officer in January 2006.

The board at the world’s largest automaker elected Henderson to be president and chief operating officer in February — putting him squarely in charge of the automaker’s global business — after allowing the positions to sit vacant for nearly five years.

Those who know Henderson say he is eager to take a crack at fixing what’s wrong and improving what’s right in the day-to-day operations of the company. Henderson, it’s said, wakes up every day with a detailed plan for how he will improve the organization.

Henderson has worked at GM for most of his professional career, except for a short stint at Price Waterhouse in Detroit between receiving his bachelor’s degree in business from the University of Michigan in 1980 and a master’s degree in business administration from Harvard Business School in 1984.

Henderson won praise from an unlikely source for his ability to keep his cool in high-stress, high-stakes negotiations. UAW President Ron Gettelfinger — hardly known as a cheerleader for corporate executives — credited Henderson with being the leader who eventually brokered the labor deal between Delphi and the UAW that was necessary to help move the auto supplier out of bankruptcy.

Following the prolonged and strained negotiations, Gettelfinger said: “If it hadn’t been for Fritz Henderson and his team at GM, this agreement would never have come about.”