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New Leaders Hold Detroit’s Prospects in Their Hands

Fritz Henderson
CNBC.com
Fritz Henderson

Frederick A. Henderson, a Detroit native known as Fritz, is the quintessential General Motors man. The son of a Buick sales manager, he has spent most of his adult life at G.M., often parachuting into troubled G.M. operations around the globe.

Now, as G.M.’s new interim chief executive, he faces the biggest challenge of all — keeping G.M. itself afloat.

Mr. Henderson has spent time in 45 countries, heading G.M. operations in Latin America, Asia and Europe and gaining an encyclopedic knowledge of its far-flung operations. In 2006, he returned to the United States as G.M.’s chief financial officer just as the current crisis began.

Ten months after Mr. Henderson took over G.M.’s Latin American operations in 1997, Brazil’s economy collapsed and Mr. Henderson was forced to make layoffs and close factories. He responded with the development of small, inexpensive cars that became regional best sellers.

While he was in Asia, starting in 2002, G.M. expanded in China and bought a majority of the Korean automaker Daewoo, which provides G.M. with small cars for overseas markets. In Europe in 2004, he managed to cut 12,000 jobs, despite a six-day wildcat strike in Germany.

Through it all, Mr. Henderson gained a reputation as a bulldog. He helped engineer the sale of a majority of G.M.’s financial arm, GMAC, to the private equity firm Cerberus, but was also a major player in GMAC’s ill-fated move into mortgage lending.

Now, Mr. Henderson will have to see if all his years as a roving G.M. repairman can pay off.

Kent Kresa, the new chairman of G.M.’s board, is no stranger to government oversight, having been chief executive of Northrop Grumman, one of the largest military contractors, for 13 years.

At Northrop, Mr. Kresa’s main customer — the government — provided the company’s revenue and helped guide its strategy. Mr. Kresa has said that he welcomes government oversight of the automaker, as long as the federal overseers are people who understand the business.

He has gone through corporate turnarounds himself. When it became clear in the mid-1990s that Northrop was going to become an also-ran in military aviation, he steered the company into military electronics and information technology, and then began a corporate acquisition spree.

After leaving Northrop in 2003, Mr. Kresa joined the G.M. board and the politically connected Carlyle Group, a private equity firm in Washington.

Mr. Kresa remained a staunch defender of G.M.’s chief executive, Rick Wagoner, even after auto industry executives were greeted with derision and criticism by Congress last fall. Mr. Kresa told The Associated Press in December that Mr. Wagoner had done an excellent job and did not deserve to be sacked.

“If you look at it carefully,” Mr. Kresa said, “you’d find that Rick’s done a good job.”

If anyone understands the concept of speed it is Sergio Marchionne, the Fiat chief executive. He is known both for his love of fast cars and his ability to deliver fast corporate turnarounds.

He now has 30 days to meet the Obama administration’s deadline for negotiating a Fiat-Chrysler partnership.

Since becoming Fiat’s chief in 2004 — he was hand-picked by the Agnelli family who founded Fiat — Mr. Marchionne has delivered one of the auto industry’s most impressive turnarounds, bringing profits to an automaker that seemed in a death spiral.

Mr. Marchionne pulled the cobwebs off Fiat’s cumbersome bureaucracy, brought a can-do culture to a hidebound organization and gave free rein to young talent. Fiat soon began to grab market share, turning losses into profits. It has brought out popular new products, like the compact and technologically advanced Fiat Bravo.

A chartered accountant, Mr. Marchionne, a dual Canadian and Italian citizen, has worked and studied in Canada, including getting a master’s degree in business from the University of Windsor, right across the river from Detroit. Like many in Detroit, Mr. Marchionne believes in the historical heritage of great car brands and feels that heritage gives both Fiat and Chrysler a competitive advantage over the efficient, but bland, cars produced by Japan.

Mr. Marchionne is also not shy in his taste for the fast lane. Two years ago, he crashed his Ferrari 599 GTB Fiorano — and walked away with hardly a scratch.

Edward Montgomery, who has worked in both government and academia, was a supporter of Barack Obama’s in the presidential campaign, and his praise for Mr. Obama’s economic plan for working-class Americans found a way onto the campaign Web site.

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Now, Mr. Montgomery, the new director of Recovery for Auto Communities and Workers, has the chance to turn words into action as he helps the workers and communities hardest hit by the downturn with government aid and job creation programs. Mr. Obama said Monday that Mr. Montgomery would be a “strong advocate.”

Mr. Montgomery is dean of the University of Maryland’s College of Behavioral and Social Sciences, the university’s largest school. He was also part of the Obama transition team on Labor Department issues.

In the Clinton administration, he was the Labor Department’s deputy secretary and frequently spoke out about the importance of manufacturing in providing good jobs for American workers and their families.

In Michigan, Ohio and Indiana, those are comforting words.

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