Whitacre's Appointment Will Damage GM

There are a number of reasons that current GM Chairman and former AT&T (NYSE:T) chief Ed Whitacre is an extremely poor choice to run the car company. The most obvious is that he has no experience, but that is only a small beginning of a list.

It is easy to say that ousted CEO Fritz Henderson was not doing what his board and the government believed he should, or was not doing it fast enough. But, during his time on the job the company moved out of Chapter 11, closed the Pontiac and Saturn brands and sold Hummer, decided to keep its Opel and Vauxhaul operations in Europe, and stabilized the drop in domestic car sales. On Henderson’s watch GM has kept a commanding position in market share in China, which has become the world’s largest car market.

Whitacre has no experience running a car company and that means that critical decision that need to be made at GM while its looks for a CEO will either be made slowly or face a heightened risk of being wrong. It is not clear that GM senior managers will do much to help Whitacre who is viewed as a narcissist interloper. He insisted on starring in a number of the ads GM used to promote its new 60-day test drive program. In the ads he admitted he did not know much about car companies.

GM had the perfect short-term candidate for the CEO’s job sitting in is executive suite. Bob Lutz, GM’s Vice Chairman of Marketing, has been a revered figure in the auto industry for years. Lutz has run GM North America and has had senior jobs at Chrysler and Ford (NYSE:F). He is without a doubt the most qualified insider to take the GM CEO job and would not be a long-term choice because he is in his 70s.

GM’s board members and the government officials who appointed them will almost certainly regret the day that they pushed Hendrickson out and regret even more replacing him with Whitacre.

Douglas A. McIntyre