General Motors Co. Chief Executive Officer Fritz Henderson has yet to change the company's culture, and U.S. pay limits may need to be eased to attract talent, the former head of the government's auto task force said.
"He's shown that he can manage," Steven Rattner, 57, said of Henderson at a Bloomberg Washington Summit today. "Whether he can fundamentally change the culture of the company is another matter."
Kenneth Feinberg, the Obama administration's special master for executive compensation, may need to bend his pay rules to attract the best executives to run GM, Rattner said. "There are very few examples in history of companies whose cultures have been successfully changed without new blood," he said.
Henderson, 50, is under pressure from GM Chairman Ed Whitacre to show urgency in returning the Detroit-based company to profit and repaying federal aid. Henderson became CEO in March after the auto task force told former chief Rick Wagoner to step aside.
"We liked Fritz," Rattner said. "We felt that Fritz had more energy and more drive and got the message that things had to change and was being groomed to be CEO and deserved a chance."
Since Henderson took over, "there has not yet been an introduction of new blood," Rattner said. "Whether that will ultimately occur, obviously I don't know."
'Very Short-Sighted'
Feinberg has limited pay of executives at companies such as GM that accepted Troubled Asset Relief Program funds from the government. As of September, the Treasury Department spent $49.9 billion for GM and $14.3 billion for Chrysler Group LLC.
"To jeopardize the return on that investment over whether, I don't mean to sound cavalier, but over whether some CEO has a $500,000 base salary or a $750,000 base salary strikes me as very short-sighted," Rattner said.
Rattner stepped down in July as head of the U.S. panel, which forced GM and Chrysler into bankruptcy and demanded concessions from unions, creditors and carmakers.
He said there was a "lot of culpability" for the carmakers' predicament, including the roles of unions and management. "They were some of the worst-run companies I've ever seen in my life," Rattner said.
His departure left Ron Bloom, a former union adviser and Lazard Ltd. vice president, in charge of the task force.
