GM moves quickly to change management, makes veteran car guy Lutz his adviser
DETROIT - When auto industry veteran Bob Lutz returned to General Motors in 2001 after 30 years with other companies, he quickly grew tired of GM's numbers-oriented bureaucracy, printing up post-it notes that asked, "Says Who?"
Lutz stuck his credo on walls and bulletin boards as he publicly challenged the lumbering corporate culture.
In announcing a sudden management overhaul on Friday, GM chairman and acting CEO Ed Whitacre Jr. was speaking Lutz's words when he told employees that the bureaucracy needs to end and they can take reasonable risks without fear of being fired.
"We want you to step up. We don't want any bureaucracy," Whitacre said in his folksy Texas drawl to about 800 GM workers. "We're not going to make it if you won't take a risk," he said in the address, which was broadcast to employees worldwide on the Internet.
Whitacre, 68, who has been frustrated with the pace of change, appointed the 77-year-old Lutz as a top adviser, creating an alliance of hard-charging veteran executives to lead the troubled company.
The former CEO of AT&T Inc., Whitacre heads a board that just pushed out CEO Fritz Henderson after only eight months in office.
In his 45-minute speech, Whitacre, reversed several changes that Henderson made, restoring the position of North American president and rejoining sales and marketing, which had been split in two.
Whitacre, wearing a charcoal pinstriped suit, paced across a stage, encouraging workers to make changes and get things done quickly. Several times he was self-deprecating, acknowledging that he knows little about cars and would need help from workers.
Whitacre made clear he would rely on Lutz, the company's legendary car guy, to craft GM's future and teach him the business. "Bob, with me as a pupil, you've got a tough job," Whitacre said.
Lutz's new role ends his short stint as head of marketing under Henderson. Yet it was apparent from Whitacre's speech that Lutz has his ear.
Saying he's sick of ideas sitting on desks "while we wrangle," Whitacre elevated many of the company's younger executives. Among them were, Mark Reuss, 46, who for a short time ran engineering and was named president of North America Friday; and Susan Docherty, 47, the former sales chief, who was picked to head sales and marketing. Whitacre also named Nick Reilly president of GM's European operations, which includes the Opel and Vauxhall brands.
The changes came so fast, though, that Whitacre didn't even know how to pronounce the name of Karl-Friedrich Stracke, the man he appointed to head global engineering.
"If I butchered your name, I'm from Texas, you'll understand," Whitacre said. He also invited up to the stage Denise Johnson, the new vice-president of labour relations.
"I have to make I sure I know you, too," he said, reaching down to shake her hand.
Stephen Girsky, the only one of GM's 12 board members with automotive experience, also was named a special adviser to Whitacre.
During the address, Whitacre said he is open to suggestions and encouraged employees to ask questions and communicate.
But that's in contrast to the way he managed in building regional phone company Southwestern Bell into a giant that eventually acquired AT&T, according to analysts.
Dave Burstein, editor of the DSL Prime broadband industry newsletter, said that at AT&T, Whitacre brooked no disagreement about who was in charge.
"If you don't take orders, Whitacre doesn't want you," he said.
As he led the Texas-based Baby Bell on a buying spree, Whitacre usually replaced management teams of the acquired companies, Burstein said.
Whitacre has said he wants to speed up changes so the company boosts sales and market share to make money and repay government loans.
GM, which emerged from bankruptcy protection last summer, owes the U.S. government $52 billion and hopes to repay much of it with a public stock offering.
Gerald Meyers, a former chairman of American Motors Corp. who knows Whitacre, said he will set high goals, and those who don't meet them will be ousted with little mercy. Meyers now teaches at the University of Michigan.
"He expects people to execute. Otherwise, he will replace them," Lutz said in an email Friday. "He's firm on big things, like organization and people selection, but not interested at all in detail."
Whitacre said the management changes came from a three-to-four hour session on Tuesday with senior leaders, a task that in GM's previously bureaucratic culture might take months to put together.
"I said we need to move fast, and three days is not bad, is it?" he asked the workers. "Many of the people I introduced were only told a few hours ago that they had this new job and that's a good thing."
Whitacre vowed to make the leadership team a "close knit group" with regular Monday meetings to chart progress.
"I know it's been rough, but you know all of us owe this company our best efforts," he said. "We have a chance to make this company great. If I didn't feel that I wouldn't be here, and I don't think you'd be here either."
Ken Thomas reported from Washington. AP Auto Writer Dan Strumpf and AP Technology Writer Peter Svensson in New York contributed to this report.
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