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‘New GM’ Overhauls Its Corporate Culture, Sales and Marketing as Automaker Exits Bankruptcy

GM’s Automotive Strategy Board—made up of regional presidents and global function leaders—and its Automotive Product Board will be replaced by a single, smaller executive committee that will meet weekly.

September 16, 2011
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General Motors exited bankruptcy with an overhauled sales and marketing structure, a promise of more management changes and a message that a leaner and meaner automaker is ready to win back American consumers and pay back taxpayers.

“Business as usual is over at General Motors,” CEO Fritz Henderson said Friday, July 10, in a press conference. “Everyone associated with the company must realize this and be prepared to change—and fast.”

GM’s Automotive Strategy Board—made up of regional presidents and global function leaders—and its Automotive Product Board will be replaced by a single, smaller executive committee that will meet weekly, Henderson said.

The group will focus on business results, products, brands and customers. It will cut GM’s decision-making team in half and eliminate the company’s matrix structure, Henderson said.

A key member will be Bob Lutz, the former chief of product development who had been scheduled to retire as vice chairman and senior advisor at the end of the year.

Lutz, 77, is taking a new position as vice chairman in charge of creative design, brands, marketing and communications. He will report to Henderson.

Chiefs of GM’s brands, marketing, advertising and communications will report to Lutz, who had been succeeded by Tom Stephens, vice chairman of product development. Lutz will also work with Stephens and design chief Ed Welburn “to guide all creative aspects of design.”

GM is eliminating its North American strategy board and the North American president position held by Troy Clarke. Henderson said he will head the money-losing North American unit.

“I have a number of moves that need to be made in the next couple of weeks, including with Troy, but the job no longer exists at this point,” Henderson said.

With Lutz’s move, Henderson said, GM will split its marketing and sales functions.

This will result in changes in Mark LaNeve’s job as GM North America’s vice president of vehicle sales, service and marketing, Henderson said.

“Sales will report directly to me,” he said. “We actually have a huge amount of change going on. Mark is head of sales today. We have a huge number of changes to take place between here and the end of this month, and Mark is responsible for hitting the sales numbers this month.”

Henderson said GM will have new positions in place by the end of the month. Those will involve some retirements and some people leaving the company, he said. Some people will receive new appointments within the new GM.

“I would have had this done had we closed July 31st, but we closed July 10th,” Henderson said. GM filed for bankruptcy June 1 and originally projected its exit could take as long as two months.

A whirlwind 39-day bankruptcy for GM concluded with the closing of a deal to sell key operations and the core brands to a new company majority-owned by the U.S. government.

Shaking up GM’s long-criticized corporate culture will be a key issue for Henderson as the 100-year-old automaker seeks to relaunch itself.

Steve Rattner, head of the Obama administration’s auto task force, said this week that it would be natural for Henderson to cut layers of management to make the company “a bit closer to the ground, leaner and meaner.” Henderson took over as CEO when his predecessor, Rick Wagoner, was ousted by the task force at the end of March.

The close of the court-approved sale would mark the completion of an unprecedented effort by the U.S. government to save GM and Chrysler from liquidation by slashing debt, labor costs and dealerships.

The new GM will have slashed its debt and health care obligations by $48 billion and dropped almost 40 percent of the dealers from an unprofitable network.

GM also will take advantage of a new labor contract with the United Auto Workers that the company says will put its hourly operating costs on par with Japanese competitors led by Toyota Motor Corp.


Filed by Chrissie Thompson of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com

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