At GM, chairman Whitacre stirs it up

DETROIT (AP) — At his first meeting with General Motors’ top executives after being named chairman last summer, Edward Whitacre Jr. candidly, perhaps unintentionally, issued a warning to then-CEO Fritz Henderson.

“I don’t know how to be a chairman and not a CEO,” a person at the meeting remembers Whitacre saying. “I’m a guy that likes to be in charge.”

Six months later, the former chief executive of AT&T Inc. is running America’s largest automaker after his board forced out Henderson on Dec. 1.

Despite his claims that he knows little about cars, the 68-year Texan is clearly comfortable being in charge of General Motors.

In just two weeks as CEO, Whitacre has transferred the chief financial officer to China, fired the Chevrolet and Buick-GMC brand managers, combined sales and marketing and consolidated control of its core North American market under one executive.

Whitacre seems impatient to spur the plodding culture of GM, where decision by committee, an isolated upper management and fear of risk produced mediocre cars for years.

He wants to increase GM’s sales and market share while shifting the company’s focus from trucks to cars. He also aims to repay $8.1 billion in U.S. and Canadian government loans by the end of June. Henderson’s target was late 2011.

“We’ve seen plenty of evidence that he has a very short time horizon and impatience,” says Gerald Meyers, a former chairman of American Motors Corp. who now teaches at the University of Michigan.

Whitacre, who speaks in a folksy drawl, needs to reverse the losses that forced GM into bankruptcy protection last June.

The automaker lost more than $80 billion in the four years before bankruptcy. Its U.S. market share has fallen to 20 percent. Back in 1962, before GM was worried about Toyota or Honda — or a resurgent Ford — it was more than 50 percent.

Recently, the 6-foot-4-inch Whitacre didn’t hide his disdain for GM’s bureaucracy. His message to about 800 workers at in a Detroit suburb: Make decisions. Take risks. Move fast. Be accountable.

He needs the work force to heed his message.

At stake are billions in government loans and 45,000 U.S. jobs at a company that once was synonymous with American industrial might.

GM’s shift from trucks is already under way. Trucks account for 57 percent of U.S. sales compared with 60 percent in 2006.

GM has launched six new vehicles since July — all cars or car-based crossovers — that are selling well and have been favorably reviewed by critics.

In his telecom days, Whitacre showed an instinct for correctly calling changes in the market.

He recognized early on that wireless technology was going to transform the phone business, says Victor Schnee, a telecom industry analyst at Probe Financial.

GM’s prior management, on the other hand, failed to adjust to market changes.

During the 1990s, GM made billions on high-profit pickup trucks and SUVs but management was caught flat-footed when buyers switched to smaller vehicles this decade.

The company chose to invest millions in a clever hybrid system for trucks and SUVs instead of cars.

When gas prices spiked to $4 per gallon in 2008, GM sold about 10,000 hybrid trucks, while Toyota sold almost 160,000 Prius hybrid cars.