Frederick “Fritz” A. Henderson—a 1984 graduate of the Harvard Business School—resigned as CEO of General Motors on Tuesday after the Board of Directors asked him to step down, a move that stunned the auto industry.
G.M. Chairman Edward E. Whitacre announced he would serve as the interim chief executive in a press conference Tuesday, making him G.M.’s third chief executive in nine months.
Although Henderson appeared to be making some progress to outsiders, he did not implement changes quickly enough to satisfy the Board’s desire for change.
“While momentum has been building over the past several months, all involved agree that changes need to be made,” Whitacre said at the press conference, according to the New York Times. He added that G.M. was “on the right path,” but needed to move more quickly under new leadership.
Henderson’s resignation comes eight months after the Obama administration forced the resignation of former CEO G. Richard Wagoner—a 1977 graduate of the Business School.
The government, which owns 60 percent of G.M., did not play a role in Henderson’s resignation, said a G.M. spokesperson cited in the New York Times article.
Henderson, who has worked at G.M. for 25 years, may be too closely tied with the company to provide bold changes, according to Business School professor Joseph L. Bower ’59.
Although G.M. has not provided details on its search for a new chief executive, Bower said that the company would most likely look for an outsider who “would do things that were just too difficult for Henderson [as an insider].”
He added that it is important for G.M. to move quickly.
“G.M. doesn’t have forever to fix itself,” he said. “The papers tell us that the board concluded that Henderson was a good man, but he was not willing to move fast enough transforming G.M. into a 21st century company.”
Yet Bower and some of his colleagues at the Business School said that a change in leadership during this pivotal time for G.M. could hinder the company’s transformation.
“The one thing you don’t want to have when you go through this sort of situation is a crisis of leadership,” Business School professor James B. Harreld said. “You do not want to see two dips, two crises of leadership in such a short period of time.”
Business School professor Malcolm S. Salter ’62 said he did not know if the change would benefit G.M., but questioned the quick timeline that the Board seemed to want the CEO to follow.
“At some point there is a speed limit,” he said.
In an earlier e-mailed statement, Salter wrote that the breech between Fritz and the board was “a shame.”
“Another good man takes the fall for failing to immediately turn around a problem that was decades in the making before he came on the scene,” he wrote.
Salter, who taught Henderson at the Business School and also knew Wagoner from his time at Harvard, said that both were “men of strong values in a very tough industry.”
He described Henderson as a “serious student...an energetic class participant and a really smart guy.”
“He worked well in groups and was a total pleasure,” Salter added. “He invested and he performed, what could be better?”