GM CEO Ed Whitacre’s shakeup continues as Steve Girsky becomes vice chairman. Girsky’s rapid ascent, from a *mere* board member to one of Whitacre’s two top lieutenants (the other being recently arrived CFO Chris Liddell) represents the boss’s efforts to create a crisp, no-nonsense culture and eradicate the old woolly one. Girsky will remain on GM’s board, thus providing Whitacre with Girsky-ite allies among the directors and within the executive ranks. Girsky, who is 47 years old, is plain-spoken and wry, yet he’s also an optimist. These are traits General Motors needs as it scrambles to become a financially strong firm with a robust pipeline of desirable new vehicles.
Auto Industry, Corporate Governance, Management / Comments Off
Corporate Governance, Economy, Ethics & Morality, Management, United States, Work/Life Balance / Comments Off
A should-read column in a recent Economist magazine rebukes business leaders for letting the cultural argument go against them without putting up much of a fight.
The reasons for the anti-business deluge in much of the world are easy enough to find. In a simple, if not entirely accurate way, business people are the ones who have brought us the credit crisis and near global recession while continuing to pay themselves enormous sums.
The “Schumpeter” column in the Dec. 19, 2009, Economist lists some good things brought to us by business. A generalized prosperity unknown in times past, examples of true cooperation and creativity, and even a counterweight against too-powerful government.
I would add a couple more that are perhaps cousins of these concepts but not enunciated in the column. Modern businesses are settings for success based on merit and therefore the most effective vehicles for social mobility.
Airlines, Corporate Governance, Management, Transportation, Travel / Comments Off
The management disarray at EasyJet is shameful and sad. The European budget airline was once a no-frills trend-setter. Now it’s a poster child for how not to run a company. As DJN colleague Kaveri Niththyanathan writes (here’s her story; and blog), EasyJet’s founder, Stelios Haji-Ioannou, appears to be a big part of the problem. If you’ve met Stelios, you’ll know he’s nothing less than a dynamo; this was overwhelmingly positive when the airline was up-and-coming but has become a negative as the company matures. It’s a wonder EasyJet is still going strong, transporting 12.2% more passengers in November than a year earlier – compared with British Airways’ 3.4% decline in the same period. What EasyJet, its employees and its shareholders now need is for its founder and 15.5% owner to take a back seat and just enjoy the ride for a change.
Auto Industry, Corporate Governance, Government, Management, Restructuring, Transportation, Washington / 1 Comment
General Motors was never the kind of place where things happened fast. It is now. With CEO Frederick “Fritz” Henderson out the door, the auto maker’s post-bankruptcy board of directors has moved quickly. Directors could have given Henderson, who had been in office a mere nine months, more time to prove himself. But Chairman Ed Whitacre and the high-powered directors whispering in his ear recognize the urgency of the situation. Here’s the situation: As the global economy recovers and emerging economies speed up their growth, Whitacre & Co. want people to buy GM cars because they’re well-made, fuel-efficient and attractive – not because they’re cheap, which has often underlined a GM buyer’s thought process. “GM cars are so boring but the quality is just about okay and the price is rock-bottom so I’ll hold my nose and buy one” – this has been that thought process. Whitacre’s board wants customers to think like Ford buyers – “Wow. This car is getting great reviews, it’s fuel-efficient, it looks really good. I want this Ford.” So, who will succeed Henderson? Who can extract brilliance from GM’s peculiar cultural mix of stodgy complacency and severe low self-esteem? Can a one-in-a-million CEO candidate afford to take a pay cut? One must remember that GM owes taxpayers lots of money; the federal government’s pay czar, Kenneth Feinberg, won’t let Whitacre offer a world-class salary. And besides, who will want to run a company with the White House looking over her shoulder? This will be a labor of love for a man or woman with a visceral affection for General Motors and America’s automotive history; the wherewithal to read, digest and comprehend the statistics behind the marketing glitz – monthly sales, pricing levels, incentives, labor costs and so on; and the brains to ask the right questions and demand rigorous responses from the many thousands of GM workers who have been waiting for just such a leader. GM directors may opt for a non-automotive outsider along the lines of Alan Mulally, Ford’s CEO, who came from the aerospace industry. Mulally has presided over Ford’s resurgence. GM needs a Mulally. Alternatively, it might benefit from a Carlos Ghosn. The spark atop the Nissan-Renault success has been in a demanding dual role since 1999. Does a Detroit assignment appeal to Ghosn? Within GM’s ranks there may be some shining stars a couple of rungs down the hierarchy, but the board may be hard-pressed to find a seasoned change-agent within Henderson’s circle of top executives. Continue reading…
Auto Industry, Bankruptcy, Compensation, Corporate Governance, Economy, Executive Compensation, Management, Uncategorized, United States, Wall Street, Washington / Comments Off
Somehow, proponents of shareholder rights start to think differently if the shareholder is Uncle Sam.
You start hearing boo-hooing about hemmed-in CEOs. How is Robert Benmosche supposed to turn around American International Group Inc. if he can’t pay a king’s ransom for managers? Imagine the nerve of Edward Whitacre Jr. , the government-appointed chairman of General Motors Co., acting like, well, a chairman.
Just breaking is news that Benmosche is now telling employees he’s committed to staying at AIG after The Wall Street Journal reported Tuesday that he told the board of directors he might quit after just three months.
Bank Rescue Plan, Banks, Central Banks, Compensation, Corporate Governance, Executive Compensation, Federal Reserve, Management, Wall Street, Washington / 2 Comments
The cuts U.S. pay czar Kenneth Feinberg is requiring for top executives of seven companies taking government bailout funds, and the Federal Reserve’s proposals to regulate bank compensation more aggressively, have several provisions that smack more of populism aimed at swaying public opinion than of governance improvement.
Cutting so severely the top cash compensation for top performers at affected banks ensures they won’t be able to compete for top talent. The seven bailout firms, and the 28 banks on which the Fed proposes to focus, are hardly the only companies in global finance that could use the talents of executives accomplished enough to deserve high salaries. Why work for Bank of America when Macquarie Bank or HSBC doesn’t cap the salaries of its most talented employees?
In today’s WSJ, former General Electric Co. CEO Jack Welch weighs in on women and work, and the so-called work-life balance. The piece carries the headline, “Welch: ‘No Such Thing As Work-Life Balance.’”
As I’m a working mother, you might assume I object to what he says. Not so – with one caveat at the end of this blog.
Jack says: “There’s no such thing as work-life balance. There are work-life choices, and you make them, and they have consequences.”