A lean, green GM needs new leadership
Tomorrow, it's likely that the new GM will be born. And word has it that it's going to fire 450 managers and change its corporate color from blue to green. I am not sure whether other people buy cars based on the color of the corporate logo or even the number of managers the company employs -- but I know that these don't matter a bit to me. I am more interested in which company makes the best cars.
And changing GM so it makes cars that more people will buy is probably the key to its survival. That's why keeping Fritz Henderson as CEO of the new GM looks to me like an idea whose time has passed. What's needed is someone with a compelling track record of taking a traditional and previously successful company that is down on its luck and bringing it back to life.As I suggested in May, the person to do that is Louis Gerstner whose book, Who Says Elephants Can't Dance, does a nice job of describing how he took International Business Machines (IBM) from death's door in 1993 and brought it back to life. Gerstner did an interview on Bloomberg TV recently in which he criticized the auto task force. Although not the best way to endear himself to the task force, this interview made me think that he might be interested in serving.
He would be the best person I can think of for the job. Gerstner has the ability to come into an organization as an outsider, figure out what needs to be fixed, decide who should solve what problems, and then lead the charge for change.
In an organization like GM, addressing those challenges will be extremely difficult and critical to those who depend on the new GM to succeed. As Gerstner said about GM, "It denied the fact that customers really didn't want the products they had. They wanted to stay with what they did." This is the right diagnosis and I believe Gerstner has what it takes to turn around the problem.
Gerstner had effusive praise for Obama and I think Obama should use all his persuasive skills to get Gerstner to change his mind about serving. Since the U.S. now owns 61 percent of GM, it is in our financial interest that Obama convince Gerstner to run the new GM.
Peter Cohan is president ofPeter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.