Another Savior for GM? Fritz Is Back.

February 23rd, 2010
Ed Whitacre Jr., GM CEO

Would you buy a new car from this man?

Who could have written this script? Fritz Henderson has been rehired, this time as a consultant at $59,000 a month (which comes to around $3,000 an hour for the 20 hours his monthly contract requires). His boss, Ed Whitacre (right), the one who had fired him, will be getting a $9 million pay package. That’s about $4,500 an hour.

Fritz is probably worth the money (his rate is pretty typical for top executive ranks in U.S. corporations); Ed surely is not. In any case, it’s another bad story coming to light about GM. One of our regular commenters, randy, had this to say:

So the government makes them hire a board chairman who knows nothing about the car business, who then forces out Fritz and takes his job as CEO too, all while retaining the product guy [Bob Lutz] who got them into trouble in the first place, and now wants Fritz to tell them what to do.

One of GM’s PR people, Renee Rashid-Merem, defended the arrangement this way: “Ed is a long-serving veteran CEO and chairman, and while his package is higher than Fritz’s, it is significantly lower than that of our peer companies.” The whole arrangement is disgusting, and these jerks should be paid nothing. As I said last week, “They should be working for $1 a year.” Not $4,500 an hour.

Fritz HendersonHenderson (right) at least has a lifetime of GM experience, knowledge, and contacts that could serve the company well. Whitacre has said, “I don’t know anything about cars.” But he sure knows how to line his pockets. In his tenure at AT&T, he made millions and turned in a very middling performance.

Alan Mulally, former Boeing CEO, came to Ford with a $3 million pay package, but has turned the company around while keeping it out of bankruptcy. Insiders at GM have been outraged by the Henderson rehiring and by the lack of any real transformation at the company. Scroll down for comments here.

Worst of all, we are stuck with these guys, as the government reportedly pulled in Whitacre on the advice of Steven Rattner, the former Car Czar. The Obama administration, I think, was right to take over GM, but made a major misstep in how it handled the management issues.

We are all going to suffer from that bonehead play.

How can the government, as majority stockholder, set GM on a new course? What should it do now that it has given away most of its leverage?

—jgoods

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  1. Travis
    | #1

    This is pure insanity, Randy nailed it. There have been ideas on this blog that would serve GM well… ideas that wouldn’t cost the General 4500 damn dollars an hour.
    GM is finally getting its product in line (mostly) but management needs to follow suit.

  2. | #2

    If management pulls down those kinds of salaries, it’s no wonder GM can’t figure out how to build cars that will appeal to the general American public and get competitive mileage. Those guys clearly won’t ever need to worry about dollars and cents the way most Americans do.

  3. Filip
    | #3

    These clowns are everything that capitalism and free market isn’t. If they require such salaries, have them go to private companies, not owned by the tax payers.
    Now that GM is mostly gov’t owned, these kind of tricks will start popping up. Everyone will try to milk the cow for as long as there is milk trickling down.

  4. randy
    | #4

    But who do we know that has turned incompetence and lack of accountability into an art form? The U.S. government, of course, the puppeteers now running GM.

  5. | #5

    Whitacre admits he knows nothing about cars well hes in good company with idiot Lutz who knows less. GM products outside the US are good cars award winning designs in Europe from Opel/Vauxhall best seller for 20 years in Australia with Holden Commodore and thats against Camrys why arent GM smart enough to import these. Building more useless shit on ancient pickup frames isnt going to work try building what is proven as popular elsewhere.

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