GM's Fritz Henderson: The New Man on the Hot Seat
March 30, 2009
By Dale Buss
DETROIT -- General Motors has always reserved its top spot for executives with strong financial backgrounds. So from that perspective, Fritz Henderson, previously GM president and chief operating officer, is a natural to take over for just-departing CEO Rick Wagoner, who also rose through the company's treasurer's office.
But the highly regarded Henderson faces at least two big problems if he hopes to extend his "interim" as GM's new CEO into a permanent gig.
First, all the financial levers that the company traditionally has used to power its business, and that have called for a money man to be at the helm, have been frozen for the past few months and are now being manipulated by the federal government. Production plans, incentive levels, stock sales, union contracts - all of these things are still nominally under Henderson's purview, but now they're under the de facto jurisdiction of the federal government's auto-industry task force.
And if President Obama forces GM into bankruptcy court as reports Monday have suggested are possible, Henderson's hands will be tied even further.
Indeed, in his first meeting with reporters after becoming GM's CEO, Henderson admitted Monday there's a greater risk that the company will have to reorganize through bankruptcy, because of greater demands from the Obama administration to get debt off its balance sheet. But he reiterated what GM executives have said for months -- restructuring outside of the court but with Washington's support is preferrable.
Second, of course, Henderson suffers immediately and irreversibly from his association with the Wagoner regime. That's why many observers give him no better than a 50-50 chance of hanging on to his new job for the long term.
It's very possible that the Obama administration simply had to have Wagoner's scalp immediately -- because of GM's failure to come up with a viable survival plan by tomorrow's deadline -- but that they can wait a while to take Henderson's. Perhaps they just want Henderson to plunge GM into bankruptcy court and preside over the triage then take his walking papers and catch up with Wagoner.
Still, if Obama actually gives GM the opportunity to pull itself up by its boostraps with government aid, many industry watchers believe that Henderson would be a good leader toward renaissance. "He's a GM lifer and incredibly capable," said Joseph Phillippi, president of AutoTrends Consulting, in Short Hills, New Jersey, said about Henderson a while ago.
Within GM's self-defined universe, the 50-year-old Henderson has been a whiz kid. The Detroit native graduated from the University of Michigan, where he was a baseball pitcher. He joined the automaker's treasurer's office in New York as a senior analyst in 1984 just after graduating from Harvard Business School.
Henderson shortly worked his way up through GMAC. In the mid-'90sfor a while he ran GM's parts-making operations. But he made the biggest splash in Brazil, where Henderson joined Wagoner and ex-GM high-flyer Mark Hogan in transforming the company's operations there into a global model.
In 2000, Henderson became the only non-European executive of GM besides Wagoner to be chosen for a six-person steering committee that was to work with Fiat on an agreement to make frames for GM's European cars. Soon he was overseeing GM in all of Latin America, Africa and the Middle East. The next year, Henderson was appointed to run GM Asia-Pacific. And in 2004, he became head of GM's European operations.
Henderson became GM's CFO more than three years ago and was elevated to COO about a year ago. As such, he has had a central role representing Wagoner in negotiations aimed at securing more and more federal loan dollars -- and at keeping GM out of bankruptcy court.
Now, it falls to Henderson to shepherd GM through the next stage of the death of the company as the world has known it. Whether he has a chance of lasting at the top beyond that, probably only the federal auto task force knows for sure.
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