Welcome to Detroit, Mr. Whitacre

whitacre_fishbowl.gi.top.jpgBy Alex Taylor III, senior editor


NEW YORK (Fortune) -- The honeymoon is officially over.

Three months after he replaced Fritz Henderson as CEO of General Motors, Ed Whitacre is getting a rude introduction to life in a single-industry town.

Following the reorganization of sales and marketing in North America last week, the latest in a series of management changes that saw some veteran executives relieved of their jobs, the Detroit media unleashed a torrent of criticism.

It didn't matter that Whitacre, according to an insider, wasn't even responsible for the North America changes. Those decisions were delegated to North American chief Mark Reuss.

Or that GM had gone bankrupt under an earlier administration, so presumably some shifts in personnel were due.

No, some familiar faces were losing their jobs, and that was cause for concern.

Worse, according to the hometowners, some outsiders -- non-car people, in fact -- were ascending to key positions in finance, communications, and elsewhere.

First to take offense was Detroit News columnist Daniel Howes, who accused Whitacre of "management by musical chairs." Howes asked, somewhat rhetorically, whether the changes might "reap the kinds of internal resentment that delivers less performance."

Next came Automotive News, the trade weekly that lands on every auto executive's desk on Monday morning.

In an unusually critical editorial about a local hero, it declared "GM should start moving metal, not managers," and added "multiple staff changes have been confusing and off-putting for dealers and other stakeholders."

Then influential Detroit blogger Peter De Lorenzo weighed in with an open letter to Whitacre on his Autoextremist Web site. "I'm getting the distinct impression that you clearly don't have a clue as to what you're talking about, no matter how many 'aw shucks, I'm just a nice guy trying to help y'all out' platitudes you spread around," wrote De Lorenzo. Just in case Whitacre didn't get the point, De Lorenzo added, "I have a suggestion: Seeing as I don't believe you're bringing anything of value to the table...I suggest you settle into a more suitable role as official company 'greeter.'"

As an outsider who came from the telecommunications industry, Whitacre already had two strikes against him. Auto people like to think of their business as uniquely complex and requiring years of experience. Non-industry people, such as the marketing experts who infiltrated GM during the brand-management era of the mid-1990s, often get rude receptions and, not surprisingly, don't last long in their jobs.

Whitacre also suffers from being compared to the one outsider in recent times who has made good: Ford CEO Alan Mulally, who came from Boeing. But what many people forget is that Mulally was also treated suspiciously at first as some sort of foreign body. It was only through the force of his personality, as well as by posting good results at Ford (F, Fortune 500), that he came to be accepted. Alan Mulally is now treated as a saint.

Complicating all this is that Whitacre doesn't schmooze the media. He seldom grants interviews and doesn't hang out with editors and publishers in Bloomfield Hills or Grosse Pointe. He is more likely to dine at a food court in GM headquarters than the Detroit Athletic Club. Says one longtime industry observer: 'When a new leader comes to town who doesn't play the old game, the locals get their feelings hurt."

What Whitacre will be judged on, in the end, is not how he played the game but the results he was able to achieve. Already, GMers give him credit for shaking up the culture, moving up younger executives, and setting a simple, understandable goal for the company: Sell more cars.

If he succeeds, the booing will cease and, he will find himself very quickly embraced by Detroit's car guys. But assessing Whitacre before the numbers come in says more about the insular culture of Detroit than it does about him. To top of page

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