The business of business is business.
That Gertrude Stein-like statement, attributed to economist Milton Friedman (who, I think, is unlikely to have been channeling Ms. Stein) is the lesson that should be learned from Ed Whitacre, Jr.’s continuation as chairman and CEO of General Motors on a more-permanent basis. At least he will no longer be “acting.”
Whitacre said, “The board of directors asked if I would be willing to stay on at GM and help continue the company’s road back to success. Having spent the past few months learning the business, meeting with our employees, customers, suppliers, and dealers, and working with the GM leadership team, I was both honored and pleased to accept this role. This is a great company with an even greater future, and I want to be part of it.”
A few points. Whitacre is retired from AT&T, where he’d been the chairman and CEO. AT&T is an infrastructure company. It’s not a phone company. It is about networks and lines and coverage. It is about services, not physical objects. It is, essentially, a business that doesn’t make things like cars and trucks—although it is a business that uses cars and trucks.
Note he said “Having spent the past few months learning the business.” That is an acknowledgement of something that hasn’t often been heard from Detroit executives from any company until lately: an admission that he doesn’t know everything.
But also note that this is something that is learnable. Too often people in Detroit—executives and those who cover the industry, alike—seem to think that this is some sort of super-secret, profoundly difficult industry that you must be a devoted acolyte to for many, many years, at which point you will be numbered among the ranks of “car guys.”
No, it is a business. A business that can be learned. A business that can be managed.
“We’ve made significant progress in the past couple of months”—he came on in December—“so much that I can confirm with certainty that we will pay back in full the U.S. Treasury and Canadian and Ontario government loans by June,” he said.
Now, there are all manner of factors leading to that, including the massive restructuring that was initiated by his predecessor, Fritz Henderson. It also includes the array of new cars and crossovers that were initiated under Henderson’s predecessor, Rick Wagoner.
But Whitacre has the job. And he seems to be doing a good job of it. And I’m guessing that has a whole lot more to do with an understanding of business than torque curves.