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Dr. Michael McDermott David McGeorge May 4, 2010

BUSM 520 Assignment 1 Provide a critical overview of the leadership qualities demonstrated by the CEO during crisis . Dr. Michael McDermott David McGeorge May 4, 2010. General Motors CEO ED WHITACRE Overview of Leadership Qualities. GM’s Crisis. Problems Escalated in 2008

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Dr. Michael McDermott David McGeorge May 4, 2010

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  1. BUSM 520Assignment 1 Provide a critical overview of the leadership qualities demonstrated by the CEO during crisis Dr. Michael McDermott David McGeorge May 4, 2010

  2. General MotorsCEO ED WHITACREOverview ofLeadership Qualities

  3. GM’s Crisis • Problems Escalated in 2008 • Spike in Fuel Prices • Recession • Decrease in Demand for Gas Guzzlers • Loans More Difficult • Lost $88B since 2004 • U.S. Market Share drops from 53% to 19% • June 2009 GM Filed Chapter 11 Bankruptcy • 4th Largest U.S. Bankruptcy • The Largest Industrial Company • $91B Assets

  4. Former GM CEOs • Rick Wagoner, (57) CEO 2001 - 2009 • Lost $88B between 2005 -2009 • Asked to Resign by Obama • Lack of effort to reduce debt & cut cost • Fritz Henderson, (51) CEO 2009 • Asked to Resign after 8 months • Not Enough Progress after Bankruptcy

  5. GM CEO • Ed Whitacre, 68 • Former CEO of SBC / AT&T - 1990 • Acquired AT&T • Grew from $22B to $234B Market Value (1990-2007) • Retired from AT&T • Appointed GM Chairman in July 2009 • Accepted GM CEO in December 2009

  6. IT’S NOT YOUR FATHER’S GMWithWhitacre In The Driver’s Seat • Accelerating • Fired or Retired 5 Executives • Introduced 7 Outsiders & Reassigned 20 Managers • Changing Gears • Simple ads & auto magazine endorsements • Sold Saab, Hummer, & Overturned sell of Opel • Picking Up Speed • Promised to pay $8.4b to US & Canada by end of June - Paid in April

  7. Whitacre Demonstrates High Level of Emotional Intelligence

  8. Which Leadership Style?

  9. SEVEN TRANSFORMATIONS of LEADERSHIPWhere is Whitacre?

  10. Is Whitacre In The ZONEof FUNDAMENTAL LEADERSHIP? • Results Centered? Yes • More Proactive, Optimistic, Invested, & Persistent • Internally Directed? Yes • Not intimidate by conflict • Other Focused? Yes • Committed to the collective good of GM • Externally Open? Yes • Doesn’t ignore signals that suggest a need to change

  11. Comments about Whitacre • According to Bill George, Professor HBS, Whitacre made tough decisions, He became the face of GM, Regained trust in GM • Joe Phillippi, Auto Trends, said that even long time hard workers are worried about loosing their job • People close to Whitacre say he would rather cope with trauma than accept the status quo at a company that lost $84.3m in a day in 2008 • Vice-Chairman Stephen Girsky, said that Ed’s view is that GM is more complicated than it needs to be • Jim Kahan said that Whitacre realizes the biggest change GM needs is culture. • One person said that he only knew Whitacre by reputation as a “strong, no-nonsense guy who is tough, fierce, and wants to win. As I got to know him, he was those things and a nice guy as well. He believes that we were born with one mouth and two eyes and should use them in that proportion.”

  12. Does Ed Whitacre Have The Right Combination?

  13. Works Cited • video clip of Ed Whitacre • http://www.facebook.com/video/video.php?v=150256327685 • http://www.youtube.com/watch?v=97YDsiRd5u0 • http://www.4wheelsnews.com/major-leadership-changes-are-done-says-gms-ceo-ed-whitacre/ • http://articles.chicagotribune.com/2010-01-12/news/1001110356_1_fritz-henderson-ed-whitacre-general-motors-ceo • http://www.billgeorge.org/page/how-ed-whitacre-is-rebuilding-general-motors • http://blogs.wsj.com/deals/2009/06/09/the-411-on-ed-whitacre-gms-new-chairman/tab/article/ • http://www.businessweek.com/magazine/content/10_19/b4177048204431_page_6.htm • http://www.businessweek.com/magazine/content/10_19/b4177048206865.htm

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