Interim General Motors (NYSE: GM) Chairman Kent Kresa has hired Spencer Stuart, a New York firm, to help him locate candidates to replace at least half of the beleaguered automaker's twelve directors.The Wall Street Journal reports (subscription required) that Mr. Kresa has originally planned to conduct the search himself, but was persuaded the a search firm could perform the job more quickly. Replacing the board of directors is important politically as GM looks to present enough of a fig leaf of change to prevent President Obama from pulling the plug and plunging the company into bankruptcy.
So what should GM be looking for in directors? The ideal GM director should have absolutely nothing in common with the company's past management and its current board. For instance, Spencer Stuart might as prospective directors "Would you pay massive dividends while your company was struggling under a huge debt load and enormous legacy obligations?" "If your CEO drove the company into a ditch, would you wait for the President of the United States to demand his firing, or would you be more proactive about it?"
Ya know, deep analytical sorts of questions.
When GM's new directors will be seated depends on whether the company files for bankruptcy, which appears increasingly likely everyday. CEO Fritz Henderson said in a restructuring update today that "Given the objectives that we set for ourselves, it's more probable that we would need to accomplish our goals in a bankruptcy." If the company does file for bankruptcy, the new board wouldn't be seated until after the filing.
Nuclear power is on the comeback trail
Apple backs AT&T in continuing spat with Verizon
Closing Bell: The recession is still over, still... do you feel it?
Reader Comments (Page 1 of 1)
5-14-2009 @ 4:57AM
UAW LIVEON said...
Hey if they replace them all and put some UAW people on the board GM might make it. They need to get rid of the dunce Fritz Henderson too. Keep none of the past that put us where we are. Everyone keep demonizing the UAW workers but I believe these are the only people who can bring them out of this in the long run. Give them a voice on the board and wait and see the change.
5-11-2009 @ 10:30PM
Donovan said...
Nice thought. But unless GM starts selling masses of vehicles. It won't really matter who's on the board, or who the CEO is.
Consumers are not making big ticket item purchases. At least not enough to keep GM financially stable. Plus the banks ARE NOT doing high risk $40,000 - $60,000 car loans. High value vehicles, are now considered very high risk loans by the banks.