Breaking Views: GM must explain resignation

(Reuters Breaking Views) - General Motors needs to explain why chief executive Fritz Henderson is resigning. Replacing the group’s driver could well be a good thing. After all, Henderson belongs to the old guard who drove the carmaker into bankruptcy. And as Fiat and Ford have shown, new blood from outside the industry helps power a turnaround. But the lack of an explanation from GM sends some worrying signals.

Granted, it should come as no surprise that there were growing tensions between the chief and his board - Henderson, for example, was more publicly optimistic about an initial public offering next year than chairman Ed Whitacre Jr.

But Henderson’s abrupt exit implies that the board had no contingency plans, which is worrying in its own right. Granted, finding a new chief for a company kept alive by government aid is hardly easy, as Bank of America is discovering. But if the board had plans to oust Henderson, they ought to have some idea of his replacement already.

Of more concern, though, is what this says about GM’s strategy. The Chapter 11 process was supposed to allow the company to shrink to a more manageable size with fewer distractions from its far-flung operations. Since emerging from bankruptcy, though, the new board has decided to keep Opel rather than sell a majority stake to Magna and may be prevaricating over what to do with Saab since the sale to Koeniggsegg fell through. A renewed push to build a global empire should not be in GM’s future.

If it is the case that the directors are simply finishing the work car tsar Steve Rattner began when he fired former boss Rick Wagoner in March, they have nothing to fear from saying so. But whatever the reason for Henderson’s exit, they need to come clean quickly.

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