GM: Farewell, Fritz

General Motors now ex-chief executive Fritz Henderson during a news conference in Shanghai, October 13, 2009.

Image: REUTERS/Aly Song

After a contentious eight-month tenure and weeks of mounting strain, General Motors' board of directors ousted chief executive Frederick "Fritz" Henderson. Hard-charging chairman Ed Whitacre said he was stepping in on an interim basis. Reigns firmly in hand, the former AT&T boss now has an unobstructed shot at remaking the embattled GM as he sees fit.

Henderson's departure marks the final vote of no confidence in the culture of the old GM, which since at least the 1930s habitually grew executives from its own ranks. Henderson, a 25-year GM veteran, was appointed to the job in March after the government forced the resignation of another homegrown executive, chairman and CEO Rick Wagoner.

Since then, GM reorganized itself in bankruptcy court with crucial government loans worth about $59 billion. The U.S. now owns a 68 percent stake in GM and Canada 8 percent. But, Henderson’s tenure was mostly marked by fits and stutters; deals to sell off ailing brands Saturn and Saab abruptly fell apart. And last month, the board undermined Henderson's plan to sell European maker Opel to Canadian parts supplier Magna, resulting in an embarrassing about-face. The cracks in the board's confidence have been apparent since at least August. GM's recently launched "satisfaction guaranteed" ad campaign prominently featured Whitacre, not Henderson.

Now, Whitacre must find a suitable CEO to jump-start the Detroit giant's sleepy, insular culture. The model is clearly Ford, which brought in outsider Alan Mullaly in 2006, a move considered controversial at the time. Since then, Ford's fortunes have fared much better than Detroit rivals', and Mullaly's move to leverage the company down to its logo before credit markets froze made the soft-spoken former Boeing executive seem like a whiz.

But, finding a leader for GM will be tough. Government money comes with a bundle of strings, including pay restrictions. And a recovery for GM is sure to be slow. Yesterday, GM reported that vehicle sales for November fell 2 percent, to 151,427, compared with the same month last year. Overall, the four brands GM will continue to operate have posted only modest gains since the company's restructuring.