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NINETY EIGHT REGENCY

Fritz Henderson 'never had a chance' as GM CEO

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Fritz Henderson 'never had a chance' as GM CEO

Longtime GM staffer and short-term CEO moving on after tumultuous tenure

David Shepardson / Detroit News Washington Bureau

Birmingham

Of the tens of thousands of jobs lost during last year's terrible automotive downturn, Fritz Henderson's ouster after just eight months at the top of GM stands out. Henderson, pushed out last December by the company's board because he wasn't moving fast enough, has earned some vindication after being asked three months later to return as an adviser to GM on its vast international operations.

But looking back, Henderson -- who spent half of his life at GM -- realizes his tenure as CEO was probably doomed as the last of a series of lifelong GM managers who had lost credibility with the industry and the government.

"I was inherited -- not selected," Henderson said, referring to the Obama administration's decision to make him CEO in March 2009 after firing Chairman and CEO Rick Wagoner.

"The fact that I was inherited was always an issue, from Day One," Henderson said in his first extended interview since leaving GM.

He hadn't been picked by GM's new board, which was installed after his appointment. And they didn't seem confident that he was different from his predecessors.

President Barack Obama said recently that GM and Chrysler "had to fundamentally reorganize, with new management that would re-examine the decisions that led to this mess and chart a path toward viability."

Many believe Henderson wasn't given a fair shot at fixing the company. GM had been out of bankruptcy nearly five months when Henderson was shown the door. "It's clear that Fritz never had a chance," said Steve Miller, the former chief executive of Delphi Corp.

GM chairman and now-CEO Edward Whitacre Jr. has replaced nearly all of the top management. Since July 2009, GM has replaced or moved into new positions 12 of the company's top 13 executives -- with only Tom Stephens remaining in his job.

Like many former auto executives in Michigan, Henderson is looking for a job. In addition to his consulting work for GM, he has a contract with the Southfield restructuring specialist AlixPartners. He has kept a low profile since leaving GM but, at 51, he's not ready to slow down.

"I really want to open a new chapter in my career," he said during a 90-minute interview at the Townsend Hotel over sandwiches. "I just want the company to do well. I want to make sure that my 25 years of dedication to the company didn't go for nothing."

Henderson doesn't think he could have done anything differently to prevent the board from dismissing him.

"I think in good faith (the new board) wanted to get to know me. The board just wanted more change," he said.

Wagoner out, Henderson in

On March 27, 2009, Henderson learned he was going to become GM's CEO. He got the word from Wagoner, soon after Wagoner was asked to step down by Steve Rattner, the Obama administration's top auto adviser.

Wagoner and Henderson had flown from Detroit to Washington for a morning meeting.

Rattner pulled Wagoner aside for a private chat ahead of the meeting to give him the bad news: He was out.

A week earlier, Rattner had met individually with Henderson and Wagoner. "My antennae really went off," Henderson recalled.

Rattner didn't hint that he might be replacing Wagoner, but asked Henderson what he wanted to do.

"I told him I just wanted to fix the company."Henderson went back to GM's Washington office and got a call from Rattner offering him the job.

"It isn't how I would ever want this job, but if you want me to do this job, I'll do this job," Henderson said he told him. He asked for just one thing: that he notbe called "interim CEO."

On Sunday, Rattner got back to Henderson and said he wouldn't be called interim.

Rattner told The News that the auto task force hoped that Henderson would keep the job long-term.

"But the board, in its wisdom, concluded a stronger break with the past was necessary," he said.

Ideas shelved

Henderson said he was pleased with GM's restructuring progress during bankruptcy, but said he wanted to address the pension shortfalls it faced by freezing the UAW pension fund, as the company had done with its salaried pension fund.

That became impossible for GM once Chrysler reached a deal that didn't include changes to its UAW pension plans.

Henderson said it was his idea to consider moving GM's corporate headquarters out of the RenCen and concentrate employees at the Tech Center in Warren. Henderson said GM could have left the RenCen behind in bankruptcy as a bad asset, and saved a lot of money.

It was a volatile suggestion that some viewed as GM abandoning Detroit.

"It's not like we were going to move from Michigan. I wasn't going to go to Dallas," Henderson said.

A quick decision

As part of GM's bankruptcy restructuring, the government loaned the company $50 billion and assumed a 61 percent equity stake. The Treasury appointed five directors, and Whitacre became chairman. Whitacre, the former head of AT&T, is doing the job as a public service, Rattner said.

"(Whitacre) didn't want to be CEO or chairman," Rattner said. "I don't think he wants to do this one day longer than he has to."

GM emerged from bankruptcy in July, and the new board had its first meeting in August. Henderson said it was immediately clear that Whitacre wanted to decide quickly whether to keep him as CEO.

After the Dec. 1 board meeting, Whitacre came to Henderson's office and told him during a 15-minute meeting that the board unanimously asked him to resign. The public announcement came a few hours later.

Henderson was disappointed, but not surprised.

Henderson had been criticized for not doing enough to recruit outsiders to the new GM even though he had approached and interviewed Chris Liddell from Microsoft to become chief financial officer. That hire wasn't finalized until after his departure.

Henderson's biggest clash with the board was over the fate of Opel. If he had to do it over, he says, he would have changed direction earlier to retain Opel, rather than selling a majority stake.

Thanks from community

As part of his job search, Henderson, who joined GM in 1984, said he's met with 10 private equity firms and five search firms. As a battle-tested executive who has worked in fast-growing markets such as China, Brazil and Russia, Henderson thinks his competitive advantage is in "industrial businesses, broadly defined."

Most who stop Henderson at an airport or on the street thank him -- even though many were hurt by GM's bankruptcy.

In January, at a University of Michigan basketball game, a man shook his hand and said he had worked at GM for decades, but never sold any stock.

"I'm sorry to hear that," Henderson said.

The man cut him off and said: "I just want to thank you for everything you did for the company and wish you the best. I think you got a raw deal but you did what was right for the company," Henderson recalled.

"This type of feedback reminds you that the work was worth it."

From The Detroit News: http://detnews.com/article/20100617/AUTO01/6170335/1148/auto01/Fritz-Henderson--never-had-a-chance--as-GM-CEO#ixzz0r7At6v4S

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