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GM plows ahead with restructuring as sales chief Mark LaNeve exits

CEO Fritz Henderson says the company has moved aggressively and successfully launched new cars. Still, there's turnover in top management, and September sales were down 45% compared to a year ago.

October 08, 2009|Martin Zimmerman

General Motors Co., amid weak auto sales, is making progress in restructuring its operations three months after emerging from bankruptcy, its top executive said, although turnover continues to afflict the company's upper management.

The company's top U.S. sales executive, Mark LaNeve, is the latest to go. The company said Wednesday that he would leave Oct. 15. Within hours, GM named Susan Docherty, general manager of the automaker's Buick-GMC division, to replace LaNeve.

Chief Executive Fritz Henderson, installed after predecessor Rick Wagoner was ousted by the Obama administration in March, said the company had made progress in cleaning up its balance sheet, winning customer acceptance of new vehicle models and reducing costs by closing factories and cutting workers since it exited bankruptcy in July.

"Over the past 90 days since we created the new GM, we've already launched a number of new fuel-efficient, highly successful cars and crossovers; introduced a new marketing campaign that highlights our best-in-class fuel economy, quality, warranty and safety performance; sworn in a new board of directors; and overhauled our management," Henderson said Wednesday.

He said consumer reaction to GM's newest vehicles had been "very positive." In the U.S., newly launched vehicles, including the Chevrolet Equinox, Cadillac SRX, Buick LaCrosse, GMC Terrain and Chevrolet Camaro, all exceeded sales expectations in September, he said.

Even so, GM's September sales were down almost 45% compared with a year earlier -- one of the worst showings among the major automakers.

GM executives blamed part of the decline on a hangover from the government's "cash for clunkers" program, which prompted many consumers to buy vehicles in August that they might otherwise have purchased in September.

However, they also acknowledged that the company was facing economic head winds, especially slack consumer confidence caused in part by the rising unemployment rate.

To help spur demand, GM a month ago launched a new advertising campaign titled "May the Best Car Win."

GM's recent marketing initiatives, including its new advertising campaign, have been shepherded by GM executive Bob Lutz, who took over marketing responsibilities from LaNeve in July.

LaNeve, 50, whose responsibilities included working with GM's shrinking dealer network, is leaving to take a job at another company, Henderson said.

"Mark LaNeve's departure does not come as a surprise. Sales and market share in the U.S. have continued to slide, and the sales guy is always the one who bears the blame," said Michelle Krebs, senior analyst for, in her report for

Among other management changes at GM this year, Edward E. Whitacre Jr., former head of AT&T Inc., was named the company's chairman. There have been other executive departures, as well as questions about whether Chief Financial Officer Ray Young will stay with the company.

GM's search for management talent has been complicated by the U.S. government's plans to clamp down on executive pay at companies that received federal bailout funds, said Tom Wilkinson, a spokesman for the automaker. That group includes GM, which has received $50 billion in federal loans to help it restructure.

"It's a little tough to recruit people when you don't know what you're going to be able to pay them," Wilkinson said.

Docherty, 46, ran GM's Western Division, which includes California, from 2006 to 2008. Henderson said GM would look outside the company to replace Docherty at Buick-GMC.

"This will infuse new ideas and an outside perspective into our marketing efforts," he said.

Henderson said the company was aiming to return to the ranks of publicly traded companies in the second half of 2010, although he said that was contingent on achieving unspecified goals regarding cash flow and profitability. The company released no specific financial information Wednesday, saying it would give an update on its financial status in mid-November.

Henderson expressed disappointment that the planned sale of GM's Saturn brand fell apart last week, but he said plans to sell its Swedish Saab unit and its stake in European automaker Opel continued to advance. He also noted that the company missed its Sept. 30 date for closing the sale of its Hummer division but said talks with a buyer were continuing.

Henderson also said GM wouldn't reach the employment reduction goals it had set for this year. The company will end the year with 49,000 U.S. hourly workers, above the year-end target of 40,000. Instead of having 23,000 salaried workers by year's end as planned, it will have 23,000 to 24,000.


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