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Book: New CEO helped sink Fritz at GM

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Book: New CEO helped sink Fritz at GM

Charles Child

Automotive News -- September 13, 2010 - 12:01 am ET

Daniel Akerson, the new CEO of General Motors Co., played an important role in then-CEO Fritz Henderson's downfall last year, says Steven Rattner, a former member of the Obama auto task force.

In his new book, Overhaul, an Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry, Rattner sheds light on Akerson. The book goes on sale Oct. 14.

Rattner, who helped recruit Akerson to GM's post-bankruptcy board, calls the graduate of the U.S. Naval Academy "still Navy-tough." Akerson does not suffer "fools lightly -- a big plus, I thought, for incoming directors of GM," Rattner writes.

Clashing with management

Steven Rattner, whose book goes on sale Oct. 14, helped recruit Akerson to GM's post-bankruptcy board.

Akerson made his mark at the reconstituted board's first meeting last year after bankruptcy. He told the group that when his private equity firm, Carlyle Group, bought a company, he expected CEOs in their first meeting to lay out their vision.

But at the board's first meeting, CEO Henderson conspicuously neglected to spell out his vision for GM -- which Rattner says Henderson later acknowledged was a mistake.

Later in 2009, Akerson argued against a plan, which Henderson supported, to sell Opel to parts maker Magna International and a Russian bank. Akerson said GM was getting too little in the deal, struck when Opel and the industry were bottoming out in early 2009, according to Rattner.

Akerson's view prevailed. In late 2009, GM decided to keep Opel and restructure it.

Akerson and other new board members also clashed with management over a plan to spend about $1.2 billion for a new four-cylinder engine. Akerson and others sought a detailed financial analysis that spelled out the return on investment.

GM executives, Rattner says, were "baffled and upset." It wasn't clear which cars would get the new engine, so detailed analysis was difficult, they believed.

"They also did not believe -- with some justification -- that a rate of return on a single element of a car can be accurately calculated," Rattner writes.

Less patience for old GM

In November, board members were disenchanted with Henderson and were wondering who could replace him. Whitacre eventually was chosen, but Akerson was considered, Rattner says.

"Akerson, a former CEO, declined to be considered, citing his obligation to Carlyle and lack of enthusiasm for living in Detroit," Rattner says.

But this summer, when Whitacre decided to leave, Akerson changed his mind about the job.

"Akerson and Whitacre possess the same kind of toughness and decisiveness," Rattner writes. "Akerson, younger and more energetic, will likely have even less patience for the old GM ways than Whitacre did."

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100913/OEM02/309139854/1432#ixzz0zQ58vFhw

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