Daniel Howes

Commentary: GM's new CEO vows to beat bankruptcy

Fritz Henderson, General Motors Corp.'s new CEO and onetime Michigan baseball player, isn't afraid to field the tough ones.

Constant carping about bankruptcy -- including a direct "B-word" shout-out Monday by the president of the United States -- doesn't help General Motors Corp. sell cars and trucks. The auto task force's blunt assessment of GM's viability plan as too optimistic, too timid, too Detroit was "stinging in some ways." No, the beleaguered automaker could not have sought federal bankruptcy protection a few months ago because crucial financing would have been unavailable.

"We would have failed," Henderson told The Detroit News in an interview Wednesday. "We almost ran out of money in December. We were very close."

Now it starts all over. The 100-year-old automaker, an archetype of American industrial might and decline, has 60 days to cut deeper, to move faster, to confront clearly unsustainable commitments of its past, to prove its culture can rise to the occasion -- though I'm not sure it can, especially with the requisite speed.

"You are wrong," he said. "We're going to get the job done. You watch. The thought that our organization is a fragile one -- I don't accept that. Our organization is resilient. They want to do what it takes. They want to win."

They're not the only ones. The specter of a GM bankruptcy, more real today than ever, casts a long, depressing shadow on Detroit, on Michigan, on GM communities, on the national economy, even on the re-election prospects of a president less than 100 days into his first term.

The cascading economic impact of GM's failure, inside or outside of bankruptcy, would have historic implications for the state and the industrial Midwest -- jobs, retirements, tax revenues, housing values, growth rates would all be affected, mostly negatively.

Henderson, 50, understands all of that. He gets the stakes. He still says an out-of-bankruptcy workout is preferable to one inside bankruptcy, but acknowledges that the government's moves to back GM warranties and provide financing dramatically changes the automaker's "bankruptcy-is-not-an-option" posture.

He gets the need for speed, too, perhaps the easiest concept of all for a guy whose 25-year career at GM has looked like that of a man in a hurry. Groomed to someday be a GM CEO, he's in the job sooner than expected because a surrogate for President Obama asked his mentor, Rick Wagoner, to "step aside" and make way for Henderson.

"People ask, 'What changes are you going to make in management, in the organization,' " he says. "None. That would be a waste of time. We don't have time. There are mechanisms to get this done. You just have to drive them hard."

Yes, you do. But the constituencies Henderson needs to drive hardest have reasons to balk. United Auto Workers leaders, strong backers of the Obama administration, figure their allies will protect them. Bondholders operating in Bailout Nation figure the feds are more likely to help them (and protect labor) than force GM into bankruptcy and risk the collateral damage to the shaky economy.

They may both be mistaken.

In his comments before leaving for G-20 meetings in London, the president signaled a clear understanding of the competing tensions in GM's predicament. There are political risks to cramming concessions on the UAW (political payback) or using taxpayer dollars to keep GM indefinitely on federal life support (fierce public backlash).

Unless, that is, Henderson and his team deliver a viable plan for GM -- in 60 days.

Daniel Howes' column runs Tuesdays, Thursdays and Fridays. (313) 222-2106 dchowes@detnews.com