“Those who cannot learn from history are doomed to repeat it.”- George Santayana (philosopher)

General Motors announced yesterday that their interim CEO Ed Whitacre would become their permanent CEO.  Whitacre is the former CEO of AT&T and was appointed Chairman of General Motors when the company emerged from their government sponsored bankruptcy.  Whitacre has been interim CEO since replacing Fritz (we barely knew you) Henderson after only an 8 month tenure at the helm of GM.  According to CNBC, “Whitacre has said Chris Liddell, who joined GM as Chief Financial Officer from Microsoft, is a leading candidate to succeed him.”

This continues a long tradition of hiring non-car executives (remember Bob Nardelli) to the top spot of our domestic car manufacturers. I am concerned about this appointment helping to continue an even larger trend, which is, the downward slide of our domestic manufacturers (excluding Ford’s recent good fortunes).

I am certain that being the CEO of a company the size of General Motors requires a distinctive skill set.   Additionally, GM currently finds itself highly indebted to the American tax payer, a situation that would make the job of any CEO more difficult.  The CEO of General Motors has an enormously difficult job that requires expertise across several business functions.  Most of these activities are probably identical to Mr Whitacre and Mr Liddell’s previous positions at AT&T and Microsoft.  These would include dealing with the press, dealing with Wall Street, deciding on a bond offering, etc…  However, there are peculiarities in the automotive industry, as there is in every industry; that require someone who has at least a tiny bit of experience in the industry.

I am certain that Mr Whitacre and Mr Liddell are exemplary executives, trained in the latest management techniques and educated in the finest schools.  But each industry goes through ebbs and flows that are unique.  The executives who have operated in an industry during different economic stages develop historical knowledge that they can then apply to future situations, which should lead to more informed and hopefully better decisions.  Mr Whitacre and Mr Liddell are obviously lacking any of that knowledge.

At The Used Car Voice, we try to think positively.  With that in mind, this could be an excellent decision for General Motors.  As a realist, I have my doubts about the success of the new GM. However, I am an American tax payer, which also makes me an extremely reluctant stock holder of General Motors.  Since I am a stock holder, I can only say…  Good Luck Mr Whitacre, I wish you all the success in the world!!

https://www.cnbc.com/id/35057419/site/14081545