Exclusive: General Motors CEO Fritz Henderson
This is a rush transcript from "Glenn Beck," May 14, 2009. This copy may not be in its final form and may be updated.
GLENN BECK, HOST: Tonight, we're going to start things a little bit differently, because there are a lot of important things going on today in America and I want to get right to it. Everybody else is going to talk about Nancy Pelosi; we're going to touch on that. But I have to go back to — I don't understand this economy. It doesn't make sense to me.
It is said and has been for a very long time, "As goes General Motors, so goes America."
Well, here for his first cable news exclusive interview is General Motors CEO, Fritz Henderson.
Hello, Fritz. How are you are, sir?
FRITZ HENDERSON, CEO, GENERAL MOTORS: Good, Glenn. How are you are?
BECK: Very good.
I want to do — before we get into this, full disclosure: I do advertising for you on radio. I am what's called a "G.M. ambassador." But I want to be able to look my audience in the eye and tell you, that doesn't mean any other than me — to me other than this. I believe in General Motors' cars. I drive — I had their cars. Before they were a client of mine, I was a client of theirs. I bought them myself. I have a Saturn and a couple of other G.M. cars. That's it.
The minute they start making crappy cars, I ain't beholden to General Motors. They make great cars.
OK. Fritz, with that being said, I am a believer.
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HENDERSON: Glenn, thank you.
BECK: You're welcome.
I am a believer. I'm tired of people saying, "Oh, Americans don't make good cars." They haven't driven an American car, obviously, for a very long time.
However, with that being said, you're now in bed with the federal government. We have cars now possibly going to be made by a company run by unions and the government.
What kind of nasty K-car are we going to be getting in the future?
HENDERSON: Well, Glenn, neither the UAW nor the UAW VEBA nor the federal government has demonstrated any interest in running our business...
BECK: Wait, wait, wait.
HENDERSON: I think, in terms of product, you're going to have...
BECK: The president just fired your predecessor.
HENDERSON: You're going to have — you're going to have...
BECK: I mean, that — if that's not running your business, what is?
HENDERSON: To a consumer, you know, what is General Motors about? What's a Chevrolet about? What's a Buick about? It's about the product. It's about the service. It's about, you know, their local dealer.
And it's our job to make sure we deliver them fantastic vehicles.
BECK: OK. Well, help me out because you have some conflicts. I just made — before we went on the air, I just made — I just made a note of the people now that are involved in "helping you," quote, unquote.
You have the government. Their agenda is pro-union and green. It's got to be green and efficient.
Then you have the unions. Their agenda is job growth, higher wages and legacy costs.
On the other side, you have the consumer that just wants a good car and a fair price.
Then you have the shareholders that want low cost and high profit.
How do you possibly serve all of these masters? How do you make that work?
HENDERSON: Competing priorities.
Well, it starts with the customer and the product, actually. The only way to make it work, the only way to win in the business is to get the products right, and then, frankly, sell them to customers and make the customers excited about your cars, take care of customers. And when we do that, we can make a lot of these things work, Glenn. That's the way it starts and that's the way it ends.
BECK: But, Fritz, I have driven — I don't even know if you know this
— but I drove for about a month your hydrogen car. I actually made a time capsule for my children on your hydrogen — what is the name of the hydrogen car?
HENDERSON: It was basically an Equinox fuel cell.
BECK: OK, fuel cell car. It's absolutely — notice he already just said it "was," an Equinox fuel cell. This car is absolutely amazing. And when I was driving it, I not only — I not only did a piece on it on television, but I also did it on radio, and I made a time capsule for my children and said, "This is the car of the future, kids." It runs on water. It's a fuel cell. The only thing they have to get right is the battery.
George Bush, this government pushed for hydrogen. We're going to be hydrogen. This week they just came out and said, "Yeah, hydrogen really is not going to work."
I've driven the great car of the future. They also said they think the Chevy Volt might be too expensive.
How can you possibly run a company like this?
HENDERSON: First of all, appealing to the future customer in having the right of future technology is a critical part of any business, including ours. You participated in the Project Driveway. It was a validation that fuel cell vehicles are real, can be fantastic vehicles.
HENDERSON: Obviously, there are cost issues. They can be fantastic vehicles. But the cost of that, we have to continue to work the cost to get down. Otherwise, it won't be — it won't be commercial transactions. But we did prove the technology.
And with respect to the Volt, we will prove the technology. We will launch the vehicle before the end of next year. So, it's about — in our case — offering a variety of technologies so we can be part of the future.
BECK: But — Fritz, when I first started to do commercials for General Motors, the — I flew up to Detroit and I met with all of them, and I was being squirrely. I don't know. We'd never met. So, I don't know if you know me or listen to my show or watch my show at all, but I can be squirrely.
And we were having lunch and I was with a bunch of executives and I was teasing them, I'm like, "Come on, guys, tell me what's buried in the basement. You know you've got the car that runs on air and it's been there since 1956." And I was joking with them.
And I don't remember who the executive was, but they leaned across the table and they said this to me, "Mr. Beck, you know what? Can General Motors make the car that runs on water? Yes, we can. Do we have hydrogen energy? We've had that since the 1960s. Yes, we can. But what we need is leadership in Washington to not pull the rug out from underneath us every time we try to do something. If they will set an agenda, General Motors, the people that work here, the people who are the imagination and the workers can build the car."
The guy was very serious and I believed him. One of the reasons why I believe in General Motors is because I've met the people that build the cars and design the cars.
But again, you now have a government that, because he said we can't have a — we can't retool and then have the government pull away and say, "Oh, well, no, that's not going to work." That's just what they've done to you.
And — I mean, don't you think they're going to do that again?
HENDERSON: At least in terms of alternative propulsion, we don't think that's what's been done to us. We think that there is — there is an urgent need for energy policy within our country. That's the responsibility of government.
It's our responsibility to make sure that we offer consumers alternatives and that we have the right technologies ready for the future. That's our job and we're committed to getting that job done.
BECK: OK. So, you're saying that government is not your master?
BECK: OK. If the government came in and did what they did to Chevrolet — not Chevrolet, but to Chrysler this week, where the — it was reported the president cut their advertising budget. Would you say that's maybe stepping over the line or is that appropriate for the — I haven't seen that in the Constitution. But, is that — does the president have the ability to do that?
HENDERSON: Glenn, I can't — I mean, I got my hands full working for General Motors. So, I can't speak to Chrysler. I can simply say, certainly, we're appreciative of the support we've gotten from the administration starting with financing.
Frankly, we wouldn't have made it had we not received the support. That brings with it a responsibility to do the right thing for the taxpayer, for investors in G.M., and so, you know, that's — we have to get that job done.
But in terms of day-to-day managing the business, no — I mean, it's about doing the basics, doing it well. And they're not in there deciding what our advertising budget should be, nothing of the sort.
BECK: But they — but they are with Chrysler already.
I guess, you know, you just said something that I was so glad to hear you say that you had a responsibility to the taxpayer. You know, I don't know if you know this because you guys are getting beat up all the time, you're getting beat up about your jets and everything. And meanwhile, these clowns in Washington are flying in their jets.
HENDERSON: Actually, I do know that.
BECK: Yes, you do know that. But you — I don't know if you know that the American people are behind you if — if — you are responsible with everything. I personally don't want to bail out the car companies. However — OK, great. The government just went and gave you all of this money.
You have a grave responsibility with our money. You don't — the problem here is that the taxpayers give you the money, but the people in Washington are giving you the rules and those don't necessarily match. I don't know a single person — in fact, I just saw a poll this morning — not a single person thinks the government is going to be good at running car companies. It's not a good idea.
Do you have a — do you have a sense of the American people and the responsibility that you have?
HENDERSON: I think we do. The men and women at G.M. are immensely appreciative of the support we have received in what would otherwise been a complete meltdown of our business. Frankly, we've gotten the support, we've gotten the hand, we've gotten the assistance and it's highly unpopular, we understand that.
What does that mean we have to do? That means we need to get the job done and use this once-in-a-lifetime opportunity to transform our business so that we don't do this again, so that we justify that support, so that if it's a loan we pay it back, and if it's an investment, they get a return on that investment, and we become part of the future. That's our job. That's what we have to do.
BECK: What were the mistakes, Fritz?
HENDERSON: Well — actually, I made a lot of mistakes through my career. I think most executives do. But if you look back I think we've done a lot of things well...
BECK: Of General Motors, what are the things that you'd say — that was just a mistake and we screwed this up, this is where we really went wrong?
HENDERSON: Well, you know, if you basically go from 2007 to where we are now, we came out of 2007 with still a weak balance sheet. We began to transform our product, the portfolio. We were transforming our business. We had a new labor contract here in North America.
Our businesses around the globe were growing. Were profitable. We got our European business to break even. We're making money in Asia. We're making money in Latin America. So, there were a lot of things going well.
What went wrong? One, the fragility of our business particularly of our balance sheet was exposed as we saw a 45 percent decline in volume. So, we saw an implosion of demand not only here in our home market but pretty much around the globe, and it exposed the weaknesses in our balance sheet, for example, and certainly our liquidity position, and we ran out of cash.
So, what went wrong is we were — we had — we were weakened as we were coming out of '07, but we had a path to the future. And then we saw, as I said, a 45 percent decline in demand over an 18-month period, and we were just now able to withstand that.
BECK: We were told that you guys couldn't go bankrupt because of all the "mom and pop" feeder — you know — suppliers that are so linked to General Motors. You know, I personally think bankruptcy is there for a reason. I think it would have — don't you think it would have been a blessing in some ways for at least you and General Motors, you would have been able to get under — out from underneath some of these legacy costs where the unions are strangling General Motors?
HENDERSON: Glenn, I would say in terms of the UAW and our unions, and not just the UAW but the CAW and many unions around the world, they have been more a part of the solution than part of the problem.
Yes, we have significant legacy costs that we're having to address. Frankly, they're trying to help us address those issues at the same time. For example, a groundbreaking VEBA agreement in 2007 wouldn't have been thought of five years before.
So, we're trying to find solutions to what is a very difficult problem. I view the unions as more part of solution than part of the problem — me, personally.
BECK: Wow, OK.
Let me go to — let me go to the dealerships. I know Doug and Dick Norris. They're — in fact, Dick worked for your father, I believe, when he first got into dealerships.
They are now down in Florida. But he started back in the '70s in Fort Wayne, Indiana, and he was a sales manager and then he got his own Buick dealership and GMC. And now, I think they're one of the biggest dealers down in Florida. And they are just good, honest, decent men.
And I saw them, what was it, in December. I went down and I was in Florida. And they happened to come to one of my shows. And they were freaking out, quite honestly, because they got every single dime that they have in this dealership. They've got families and people that are, you know, that have been working for them for years and years. They do everything they can to play by the rules and give people a square deal.
They found out about Buick being cut on a phone conference call that was going to the press. They didn't even know it and they were devastated by it. Now, they're waiting to find out if theirs is one of the dealerships that is going to be cut.
There are dealerships that have been your partners all across the country that keep getting delayed on whether — are you going to close, are you going to close, are you are going to close?
I mean, at some point, don't you have to just pull the trigger and say, "Guys, you are our partners. Here is the news." When do they find out about who's getting closed?
HENDERSON: Glenn, first of all, Buick isn't closing. Buick is one of the four core brands we're going to market with. We're very confident with the Buick brand going forward.
BECK: Sorry, it was Pontiac.
BECK: I apologize for that. Sorry.
HENDERSON: OK. Fair enough. No problem. I mean, I think in terms -
- let me come to the dealers, OK?
HENDERSON: You're absolutely right. It's incumbent on us to notify dealers — those are the dealers that aren't going to be with us in the future, we need to notify them. We're going to begin that process this week and that process basically takes place over the next, call it 30 days. And then, we need to reach out to the dealers who are going to be with us and say, how do we work together to build our future?
We need to do both of those things and will be doing it within basically the next 30-45 days.
BECK: Are they going to be — if General Motors goes bankrupt — are they going to be some of the first in line to be helped with all of the stuff that they're carrying or are they on their own, do you know?
HENDERSON: Well, the treatment, if we have to go through a bankruptcy process, how we handle the dealers is a fairly complicated thing, but I would say what we're trying to do by getting out today, in the month of May, is to begin notifying dealers, giving them advanced notice about what's going to happen to them, are they going to be with us or not. And if not, how do we work with them to buffer what is an otherwise extraordinarily difficult situation.
So, you know, that's our commitment to our dealers, transparency and let them know where they stand.
BECK: The thing with it — government came out, the president said, "Hey, by the way, we just want you to know, if there is any problem, the United States government is going to cover your warranty." And I thought to myself, Good Lord, what kind of Department of Motor Vehicles driver's license office is going to hand me a new muffler? That sounds like a really nasty idea.
What happens — if somebody is thinking about buying a new car and everybody is like, "Well, they might go bankrupt," what does that mean to the average person about — what does this mean? I don't want to get my mufflers from the United States government.
HENDERSON: I can — I can assure you you're not going to go get your mufflers at the Department of Motor Vehicles.
HENDERSON: I think, I can assure you that.
BECK: Well, would you go for me if that happens, Fritz? You'd go for me.
HENDERSON: Yes, I will, actually.
BECK: All right.
HENDERSON: You can do that. You can bank on me.
I would say a couple of things — one, we're going to get through this, Glenn. G.M., we're going to get through this. Our core brands are going to get through this. We're going to get through this with our dealers, customers and suppliers, and we're going to build a good future.
What does that mean? That means you can be confident in what the president said in March 30, I believe it was, is you can be confident that if you buy a General Motors car or truck that the company is going to get through this, number one — and number two, your warranty is going to be honored. You're going to be able to service your vehicles; you're going to be able to get parts. You can be confident in that.
That was a fairly extraordinary statement on his part. And from our part, it's our job to make sure that, obviously, we're delivering the vehicles that a customer wants and I'm quite confident that our dealers will be able to provide the right level of service for customers.
BECK: OK. Are you — are you going to be importing cars from China now? I read that in the paper today.
HENDERSON: Yes. We don't import cars from China today. We have a very big business in China, but our business in China is focused on the China market. As, you know, we build where we sell, that's been part of our philosophy.
When you look at our business plan out through 2013 and 2014, there is an opportunity to do that, but frankly, we're in dialogue today with labor and with the UAW, for example, on how we might do this more efficiently and can we build product here instead of importing it. So, I'm — and I'm quite optimistic about trying to find solutions for that and — you know, it's really — it needs to be worked out at the bargaining table.
But, historically, and frankly prospectively, the philosophy of building where we sell pays.
BECK: Detroit, they have been saying that you are moving out of Detroit, you're thinking about moving out of your landmark building, I think, it's the Renaissance Center there in Detroit and you're closing your plants or a lot of your plants this summer.
Have we seen the worst?
HENDERSON: Well, I have a simple philosophy. When somebody asks me, can it get worse, the answer needs to be — yes, it can. But I also believe profoundly that it will get better.
And I think if you come to work every day understanding that — you know, we can get worse, so, I mean, it's — you don't want to declare victory too soon, you don't want to say it's over. But you're going to get the job done. And when we do, it will get better. And that's my simple philosophy and I absolutely believe it.
BECK: Fritz, I have to tell you, and you can believe this or not believe this. And, America, you can believe it or not believe it. I don't really care.
I had several discussions about whether or not I was going to would cancel you as an advertiser. That never happens. Nobody ever says, "No, I don't think I'm going to take their money." But I have decided to stay with you because I have met the people of General Motors. I believe in the products that I have seen that are coming down the line.
Please, sir — please, keep in mind, as goes General Motors, so goes America. Don't allow the cars to be designed or to be micromanaged by the clowns in Washington. Please. I believe in you, because I believe in the American people.
We can do it, but not with the people telling us what to do. Entrepreneurs, dreamers can do it. And I know you have got buildings full of dreamers. Please fight for those people, sir.
HENDERSON: Those people are going to deliver the kind of cars and trucks, Glenn, that exactly the kind of cars and trucks that you want.
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