Ed Whitacre's Postcard From The Auto Bailout

Ed Whitacre freely admits "I knew nothing about cars. Zero." Which made the out-of-the-blue phonecall from Steven Rattner all the more strange. But he does know management, and that's why Team Auto reached out, because General Motors management was all kinds of bad, and that needed to change now that taxpayer money was at stake.

In his memoir American Turnaround, Ed Whitacre gives his side of the reinvigoration of General Motors. It's another slice in the ongoing dissection of What Just Happened in the American auto business, and Whitacre sets up the story by asking, "How could I even consider taking the reins of a company whose business I knew nothing about?"

The book is written like a chat with Ed Whitacre himself; the words on the page almost twanging. The plain, direct language make the 271 pages of American Turnaround go quickly. The book was released February 12th, and as with any memoir, be sure to pick up a few grains of salt or look into some other perspectives so you can form your own opinions about the history that's now being written down.

There will be critics who write off American Turnaround as a vanity piece written by a typical big-business type adept at tooting his own horn. A memoir by its very nature is going to be filled with a lot of I, Me, Mine, and the inherent inertia in the car business will see Whitacre accused of trying to take credit for things set in motion by the leadership he kicked out. The criticisms might be missing the point, or worse, misinterpreting. Whitacre didn't swashbuckle in like, say, Bob Lutz, brimming with ideas about product development. Instead, he came in and looked at the way the business of GM was run, and according to his account, it wasn't firing on all cylinders. That seems to square with other reports, regardless of what you believe caused it.
For a better understanding of the man and his motivations, Whitacre spends time giving background on his childhood and work history and how his experiences at Southwestern Bell, SBC and AT&T shaped his management philosophy and practices. A couple of points are continually hammered home throughout the text. One of Whitacre's core beliefs is that management is responsible for the success and failure of a company, and another is that people are the number one asset of any business.

It became clearer and clearer that there was no sense among top managers that anything was in need of fixing.

"To hear GM management talk," Whitacre says, the collapse wasn't their fault." But peering through the murky layers of General Motors structure, it became clearer and clearer that there was no sense among top managers that anything was in need of fixing. This outsider's account of putting sunlight onto GM's jaundiced inner workings suggests that GM succeeded, and ultimately failed, both in spite of, and because of, itself.

Perhaps you could argue that American Turnaround is an exercise in back-patting self-aggrandizement, but Whitacre's 40-plus years in telecom surely afforded him a comfortable retirement and a pretty healthy sense of accomplishment, to the point where there's no need to puff out his chest and feed his ego.

The deeper point is that management at GM, the car guys, are the ones who rode this thing into the ground.

It may seem counterintuitive to criticize, and ultimately replace, the CEO of a car company for being a car guy, but that's what happened at GM with Whitacre as Chairman of the Board. The deeper point that's made more clearly is that management at General Motors, the car guys, are the ones who rode this thing into the ground with a complicated structure where nobody was clearly in charge, endless Powerpoint obfuscation and a plodding march to the beat of "it's always been done this way."

It's not a screed, but Whitacre doesn't shy away from indicting business-as-usual operators like Rick Wagoner and Fritz Henderson, and there's even a page and a half about Bob Lutz, everyone's favorite executive quote machine. The easy-reading tone and personal background helps readers come away with a friendly impression of Ed Whitacre, and that's likely by design. Nobody wants to write a personal account of what a jerk they are. Sure, there are going to be points of contention, but a memoir is not supposed to be a balanced and exhaustively researched volume. The conversations here are paraphrased from memory, leaving the door wide open to debate.

Whitacre's assertion that he doesn't know anything about cars comes through in the instances he does write about vehicles.

American Turnaround is an easy, interesting read that isn't really about cars. Whitacre's assertion that he doesn't know anything about cars comes through in the instances he does write about vehicles, and you get the sense that he was content to leave the car stuff to the car people while he concentrated on the top levels of GM. In the end, though, not being a car guy while running a car company doesn't seem to be such a bad thing if you're trying to push decisions and a sense of ownership down to every employee, instead of being coccooned on the 39th floor of the Renaissance Center. Give the car guys the power to make great cars, and support them with an effectively run business seems to be the mantra preached here. Of course, if you're both a good leader of a global car business and a car guy, so much the better.

If you want to read about chrome and horsepower, you might find Bob Lutz's Car Guys vs. Beancounters more intriguing, and Once Upon a Car by Bill Vlasic is a well-rounded chronicle of the entire bailout situation, while the Washington side of the story is told by Steven Rattner in Overhaul. But if business management intrigues you at all, American Turnaround is instructive and fascinating and definitely worth reading.

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