Workplace Culture

With Culture Change Under Way, General Motors Shifts Focus Elsewhere

By Staff Report

Oct. 7, 2009

In General Motors’ first public review of its performance since emerging from bankruptcy 90 days ago, CEO Fritz Henderson said the restructuring process has allowed the company to change its culture and focus more time on customers and products, though the automaker hasn’t shed as many workers as it originally intended.

The difference between the old and new GM is where executives are able to spend their time, Henderson said.

“It’s where we spend our time as a leadership team, and spending more time on product and customer issues and far less time on” structural issues, Henderson said during a conference call with reporters and analysts on Wednesday, October 7. “That has fundamentally changed in the last six months.”

The company, which has received $55 billion from the U.S. government and expects to detail the state of its finances in mid-November, also said it has not shed as many U.S. workers as originally planned when it entered bankruptcy June 1.

Since the end of 2008, GM has reduced its hourly headcount to 49,200 from 62,000. Without commenting further, Henderson said the attrition rate of hourly workers has been slower than expected. The company wanted to end the year with about 40,000 hourly workers in the U.S.

The company also decided to retain more salaried employees than originally planned in its restructuring. A year ago GM employed 29,700 salaried workers in the U.S. and expected to have close to 23,000 by year’s end, but the company still has 24,300 salaried employees on the payroll.

Henderson attributed the difference to the company’s decision to retain salaried workers from parts maker AC Delco, which it has not sold.

And, Henderson said, GM has retained workers in key technical areas. The company’s push toward building electric vehicles has led to increased demand for engineers with experience in that area.

Since the company emerged from bankruptcy it has consolidated and streamlined its North American and international operations and replaced its two strategy and product boards with a single executive committee led by Henderson.

Henderson said he updated employees on the state of the company in a town hall meeting this week, stressing the company’s new focus on the customer and product, risk-taking, accountability and speed.

“We’re fostering an environment where people are prepared and accept taking risks for the future,” he said.

With many of the changes to its corporate structure and debt obligations complete, Henderson said the company can focus on developing products customers want.

“The most important thing we need to work on is how do we remain competitive in the market and transform the culture” of the company, he said.

—Jeremy Smerd

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