General Motors Co Chairman and Chief Executive Ed Whitacre announced a broad shake-up of the automaker's senior leadership on Friday, tightening his grip on the company three days after replacing its CEO. The shake-up suggests that Whitacre, the 68-year-old former AT&T chief who became chairman of GM when the automaker emerged from a government-funded bankruptcy in July, could remain interim CEO for some time, possibly a year or more, analysts said.
-- Bob Lutz to advise on design, product development
-- Names Mark Reuss president of GM North America
-- Nick Reilly to lead GM Europe
-- GM and SAIC announced plans for a new India joint venture
"I want to give people more responsibility and authority deeper in the organisation and then hold them accountable," Whitacre said in a statement. The changes included shifting Vice Chairman Bob Lutz to a senior advisory role and naming Nick Reilly, the head of GM Europe, to oversee the restructuring of its Opel unit.
Reilly, 59, who ran GM's operations in Asia, had recently been dispatched to Europe to smooth over the board's decision to retain Opel rather than sell a majority stake, a move favoured by European governments and union leaders. Reilly's appointment to head Europe comes as GM readies a restructuring plan for the Opel unit and the automaker seeks to thaw relations with its European workforce.
The announcement by Whitacre followed the GM board's replacement of CEO Fritz Henderson, a long-time executive who guided the automaker through a government-funded bankruptcy. The changes gave some of GM's younger executives more control over the automaker. None of the new appointments came from outside the company.
"You wouldn't shake up the management if you expect a new person to build his own team," said Logan Robinson, a long-time auto industry executive and professor at the University of Detroit Mercy School of Law. "If you're going to stay long-term, you're going to choose the team you want," Robinson said. "It's what we see in the latest round of changes."
IHS Global Insight analyst John Wolkonowicz said he expected Whitacre to remain CEO until after an initial public stock offering, in part, to prevent US government pay restrictions from hampering the search. "What he is trying to say is 'we've got to move fast and we've got to move efficiently and we have to forget the way GM used to do it,'" Wolkonowicz said.
Lutz, 77, who put off retirement to head marketing for the new GM after its emergence from bankruptcy in July, has been reassigned as vice chairman and adviser on design and global product development. Tom Stephens, 61, remains vice chairman of global product operations and takes on the global purchasing role, GM said. GM's former head of global purchasing, Bo Andersson, left the automaker in June.
GM named Mark Reuss, 46, president of GM North America and appointed Tim Lee, 58, to take over Reilly's former role and lead its operations in its Asia-Pacific, Latin America, Africa and Middle East regions. The shake-up comes the same day GM and Chinese partner SAIC Motor announced plans for a new India joint venture. GM also said it would sell 1 percent of its 50-50 China joint venture with SAIC to its Chinese partner.
Whitacre and other executives addressed workers at the Warren Technical Center near Detroit, and his comments were broadcast to GM employees around the world. He has scheduled his first business update as acting CEO for Tuesday. Whitacre, a tall Texan known for his hands-on style, was named interim CEO on Tuesday after Henderson resigned in a split with the board.
Henderson was asked to step down after eight months, with the board looking for a quicker restructuring, the second abrupt departure of a GM CEO in 2009. His predecessor, Rick Wagoner, was forced out in March by the Obama administration.
GM has struggled to complete restructuring plans in the nearly five months since it emerged from a swift bankruptcy nearly 61 percent-owned by the US Treasury. Negotiations to sell its Saab and Saturn brands fell through in the latter stages. And in a reversal, GM's board opted to retain Opel.