Overcoming an entrenched corporate culture is the biggest question mark for General Motors Co management as it tries to maintain viability following its near failure this year, the former chief of the Obama administration's autos task force said on Wednesday.
Steven Rattner, in his most extensive comments on the unprecedented government-led restructuring, also said that post-bankruptcy recovery efforts at GM and Chrysler, which has teamed with Italy's Fiat, will not happen overnight and are not even assured.
For Chrysler, the biggest challenges are its need to regenerate its product line up and to manage a significantly leveraged balance sheet, Rattner told an industry forum at the National Press Club.
Chrysler will unveil its new business plan next month.
Regarding GM, he said, few companies have changed their cultures without introducing new blood.
The administration forced the resignation of former GM Chief Executive Rick Wagoner last spring. Rattner called him a decent and honorable executive who, like the majority of other senior officials at the company, had risen through the ranks.
But to the task force, it seemed obvious that any CEO who burned through $44 billion of cash in 15 months should not continue, Rattner said.
We did not feel GM was well managed. The culture is very insular. They basically thought the problems related to everything but management, in a way, Rattner said. It needs a shake-up.
Rattner, a former journalist and founder of private equity firm Quadrangle Capital Partners, has said the automaker's current chief executive, Fritz Henderson, had been enthusiastic about his promotion and had asked not to be tagged as an interim choice.
Fritz will be the first one to say he understands that he has to show the new board he's the man for the job, Rattner told reporters after his formal remarks. No one signed any lifetime contract.
With the government holding 60 percent ownership in GM, the board was overhauled after bankruptcy. The new chairman, Ed Whitacre, came from outside the company.
In addition to Wagoner, top U.S. sales executive Mark LaNeve and North American President Troy Clarke, whose job was eliminated in the restructuring, have left the company.
In response to Rattner, GM said it was focusing its time and resources on products and creating a culture that will lead to success.
Looking back doesn't help us with the important work we have in front of us, the company said.
Wagoner, who retired in August with a package worth $8.6 million, has not commented publicly on his ouster or similar criticism by others about GM's management culture.
Chrysler had no comment on Rattner's remarks.
(Reporting by John Crawley; Editing by Richard Chang, Phil Berlowitz)