The abrupt removal of Fritz Henderson, the General Motors chief executive, on Tuesday is not a plain vanilla boardroom coup. He was sent packing eight months after his mentor and predecessor, Rick Wagoner, was despatched. The latter had accumulated more than $80 billion of losses in eight years at the head of the company but that cannot be blamed on Mr Henderson. He was busy fixing the hole in the roof left by the previous tenant.
To lose one chief executive might be a misfortune, to lose two seems careless. Mr Henderson’s sacking is best seen as the work of GM’s owner, the US taxpayer and its trustee-in-chief, the man in the White House. The President blessed the appointment of Ed Whitacre to lead the board of sickly GM after the ejection of Mr Wagoner. Mr Whitacre is an industry outsider, a former boss of AT&T and latterly has clashed in his new job with his chief executive, when the latter pushed hard for a GM public offering next year. The new GM chairman is outspoken, prone to off-the-cuff chats with the workforce — politically astute behaviour that is likely to endear him to GM’s blue-collar staff.
The owner and trustee in Washington wants Mr Whitacre to be GM’s new broom, the outsider who sweeps away the decrepit industrial baggage of Motown, as Alan Mullally, the former Boeing chief, is perceived to be doing at Ford. Mr Whitacre remade AT&T by reassembling pieces of the old US telephone monopoly, “Ma Bell”.
Small wonder then, that the GM chairman didn’t support Mr Henderson’s strategic retreat — the bungled sale of Saab and, more importantly, the attempted sale of Opel to Magna International, the Canadian auto parts company and its partner, Sberbank. At the 11th hour, GM’s board vetoed the deal. Something caused worry — the loss of GM’s European division, the potential transfer of technology to an ambitious and controversial Russian competitor, GAZ, the motor company owned by the tycoon Oleg Deripaska.
Mr Whitacre didn’t like Mr Henderson’s retreat to Detroit but it is the view from the White House that now matters at GM and that is why GM lurches and stumbles on its road to recovery. It is difficult at the best of times for a board to define an independent strategy under the gaze of a 60 per cent shareholder. But when that majority is held by the state, the difficulty is compounded by high politics. The President must listen when the powerbrokers on Capitol Hill complain about the loss of a contract or a factory.
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GM is not the only American company wrestling with a frightening and confusing shareholder. Bank of America is losing its chief executive, Ken Lewis, who originally engineered the takeover of Merrill Lynch with the support of the US Treasury but latterly came under political criticism. The US Treasury is reported to have hired an executive search company to find directors for AIG, the insurer that nearly failed in the sub-prime crisis and is now 80 per cent owned by the US Government.
Running private companies is a new thing in Washington and it is clear the Obama administration has yet to learn how to do ownership-lite. In France, these problems are solved by the seamless and effortless transition of civil servants to boardrooms and back again, an idea that might tempt the President but which he would be wise to resist.