GM chief to dealers in Orlando: Our company is back on track
4:22 PM EDT, September 24, 2009
The head of General Motors came to Orlando on Thursday on the final stop of a multi-city tour to assure dealers that their status is safe, the company is stable and some good products are in the pipeline.
Some dealers, of course, may not be that stable. Pontiac has “almost wound down,” said Frederick A. “Fritz” Henderson, president and chief executive officer, adding that deals to sell Saturn, Hummer and Saab are pending.
Going from eight brands to four “was a tough decision,” Henderson said. “We have great dealers, great products. Like many of the things we had to do, I don’t feel good about the decision, but I feel it was the right one.”
Another decision that Henderson said was “difficult” was to cut the ties with established dealers, as he has said he wants to shirk the GM dealer body from about 5,800 to 3,600 by the end of next year.
Among those on the chopping block: Holler Chevrolet in Winter Park and Classic Chevrolet in Altamonte Springs, both part of the Holler Automotive Group, which have been selling GM products since 1938. Henderson said he is not worried by current Congressional hearings into the process GM and Chrysler used to eliminate dealers.
Henderson got the job on April 1, but not in the way he wanted it: The 25-year GM veteran was named to the post after his successor and boss, Rick Wagoner, stepped down as part of the federal bailout of GM.
Henderson had hoped to keep GM out of bankruptcy, but shortly after taking over, GM did go bankrupt, and U.S. taxpayers ended up owning nearly 61 percent of the company. The recovery, Henderson said, is on schedule, and he hopes GM can go public again next year.
Henderson, 50, has spent most of his GM career outside the U.S., and since two-thirds of GM’s volume is from foreign sales, he was a natural candidate to head the company. Known as a money man — he has an MBA from Harvard Business School — Henderson is learning the product side quickly.
Henderson spent Wednesday evening at Carl Black Buick-Pontiac-GMC in Orlando, and presided over the unveiling the 2010 Buick LaCrosse and GMC Terrain.
Henderson is “an awesome guy,” said Carl Black General Manager Omar Rodriguez.
In an interview with reporters Thursday, Henderson said the restructuring of GM is nearly complete. GM’s present inventory of vehicles is about 500,000 less that it was early this year, reflecting the manufacturing cutbacks needed to match the market.
Henderson said the days of 17 million total vehicle sales in the U.S. seen just a few years ago may be gone for a long time, and he predicts the 2009 market will end with about 10.5 million sales, of which GM has just over 19 percent.
Next year, he expects the U.S. market sales to grow by about 1 million. Even if it doesn’t, Henderson said GM is now structured to break even in a market that has just 10 million total sales, with GM holding 18 percent of the market.
The Saturn sale to a group headed by racing magnate Roger Penske is proceeding on schedule, and Henderson hopes the Saab sale to a European group headed by Swedish supercar manufacturer Koneigsegg will succeed. Less certain is the pending sale of Hummer to a Chinese heavy equipment manufacturer, though Henderson’s past tenure as the head of GM’s Asian operations should help. If that deal fails, it is likely Hummer will die, he said.
Henderson said that the “Cash For Clunkers” was an effective sales tool, “short and sweet” and lasting just 45 days. September’s post-Clunker sales have been grim — Edmunds.com predicts GM’s September sales will drop 46.1 percent over September, 2009, and 37.8 percent from August, which was propped up by the clunkers program.
“But since the program was short and sweet, the hangover should be short, too,” he said.