Communicating Change at General Motors - AU Purepure.au.dk/portal/files/36293303/Bachlor_thesis_2011.pdf · Bachelor thesis 2011 Supervisor: ... and a complete analysis will be too

Communicating Change at General Motors

A study of Fritz Henderson’s change communication in relation to the bankruptcy in 2009.

Marketing and Management Communication ASB, Language and Business Communication

Bachelor thesis 2011 Supervisor: Michael Hübertz

By Keld Andersen

Bachelor Thesis 04/05/2011 Communicating Change at General Motors

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Summary

This thesis examines how Fritz Henderson, CEO of GM, prior to and after the bankruptcy in 2009,

communicated the necessary large scale organisational changes of GM to the American employees.

The purpose of this thesis is to analyse how Henderson communicated the change and whether the

change communication could have been improved.

In order to be able to analyse and discuss Henderson’s communication efforts, this thesis

examines the connection between organisational theory and the view on change management.

Therefore, this thesis distinguishes between organisations as machines, organisms and chaotic

entities, which lead to three different perspectives on change management, and thus three different

categorisations of effective change communication.

However, this thesis takes departure in the notion of organisations as organisms,

subsequently, the theories and models for analysing Henderson communication efforts correlate

with this notion. Therefore, this thesis examines three different models for organisational change,

and concludes that the Lewin-model is the appropriate foundation for analysing Henderson’s

communication efforts. Thereafter, this thesis identifies a best-practice theory, which is based on

Klein’s communication strategy for Lewin’s model, and additional theories such as Aristotle’s ethos,

pathos and logos. The best-practice theory is used to analyse and discuss Henderson’s

communication efforts.

In order to answer how Henderson communicated the change and whether it could have been

improved, this thesis analyses six texts. Four of the texts are analysed in relation to what is said and

how it is presented in terms of rhetoric. The final two texts are analysed in terms of two-way

communication. Thereafter, the results are compared to the identified best-practice theory to

conclude how Henderson communicated the change, and whether it could have been improved.

Finally, actual improvements are suggested.

The overall conclusion of this thesis is that Henderson did follow most of the identified best-practice.

However, it was also found that the change communication could have been improved in terms of

information, two-way communication and rhetoric. Therefore, actual improvements were suggested.

Finally, it was also found that the approach and the theories in this thesis can be questioned.

Firstly, the notion of organisations as organisms can be questioned by the notion of organisations as

chaotic entities, since this view suggests a different approach to change management, and thus

challenges the identified best-practice in this thesis. Secondly, the Lewin-model has some limitations

such as the notion that change has an identifiable conclusion. Thirdly, the best-practice theory can be

questioned by theories that suggest other methods of communicating change.


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Table of Contents

1. Introduction .......................................................................................................................... 5

1.1. Problem statement ................................................................................................................. 5

1.2. Delimitations ........................................................................................................................... 6

1.3. Theoretical framework ............................................................................................................ 6

1.4. Methodology ........................................................................................................................... 7

1.5. Method .................................................................................................................................... 8

2. Rhetoric ................................................................................................................................ 8

3. Change Management ............................................................................................................ 9

3.1. Change Management and Organisational Theory .................................................................. 9

3.2. Organisational Change Management ................................................................................... 10

3.2.1. Models for Organisational Change Management ......................................................... 10

3.2.1.1. Kotter ..................................................................................................................... 10

3.2.1.2. Connor and Lake .................................................................................................... 10

3.2.1.3. Lewin ..................................................................................................................... 11

4. Communicating Change ....................................................................................................... 12

4.1. The Importance of Communication ...................................................................................... 12

4.2. Communication Strategies .................................................................................................... 13

4.2.1. One-way Communication .............................................................................................. 13

4.2.2. Two-way Communication ............................................................................................. 14

4.2.3. Rhetorical Strategies ..................................................................................................... 14

4.3. Conclusion ............................................................................................................................. 14

5. General Motors ................................................................................................................... 15

5.1. Successful Communication in a Context ............................................................................... 15

5.1.1. Previous Change Efforts ................................................................................................ 15

5.1.2. The Context in 2009 ...................................................................................................... 15

5.1.3. Henderson’s Change Efforts .......................................................................................... 16

5.1.4. Communicative Purpose ............................................................................................... 16

5.1.5. Successful Communication............................................................................................ 16

5.2. Henderson’s Change Communication ................................................................................... 17

5.2.1. Informing ....................................................................................................................... 17

5.2.1.1. Text 1 ..................................................................................................................... 18

5.2.1.1.1. Rhetorical Analysis ............................................................................................. 18

5.2.1.2. Text 2 ..................................................................................................................... 20


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5.2.1.3. Text 3 ..................................................................................................................... 21


5.2.1.4. Text 4 ..................................................................................................................... 23


5.2.2. Two-way Communication ............................................................................................. 24

5.2.2.1. Text 5 and 6 ........................................................................................................... 24

5.2.3. Conclusion ..................................................................................................................... 25

5.3. Improvements ....................................................................................................................... 27

6. Critical Perspective .............................................................................................................. 27

7. Conclusion .......................................................................................................................... 29

References ................................................................................................................................. 30

Books ................................................................................................................................................. 30

Articles ............................................................................................................................................... 30

Web References ................................................................................................................................ 31

Analysis .............................................................................................................................................. 32

Appendix .................................................................................................................................... 33

Appendix 1 ........................................................................................................................................ 33

Appendix 2 ........................................................................................................................................ 33

Appendix 3 ........................................................................................................................................ 34

Appendix 4 ........................................................................................................................................ 35

Appendix 5 ........................................................................................................................................ 36

Characters excluding spaces: 54.991.


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1. Introduction

June 1st, 2009, General Motors1 declared bankruptcy after several years with a decrease in sales and

market share (web12; Taylor III, 2004). Consequently, GM had to engage in large scale organisational

changes, as GM’s culture and structure had to be changed, urgently, to avoid a complete closure of

the company (web2). Therefore, GM appointed Fritz Henderson as the new CEO, a couple of months

prior to the bankruptcy (web3). Henderson, immediately, started communicating with employees

and other stakeholders about how GM should be changed to avoid bankruptcy (web4). Naturally,

Henderson was under pressure and had limited time to communicate his proposed changes due to

the fact that GM was nearing bankruptcy. After GM had declared bankruptcy, Henderson was still

under pressure since the American government expected a quick turnaround plan for GM, and thus

kept the company under scrutiny (web2).

This report serves to answer how Henderson, prior to and after the bankruptcy, communicated the

large scale organisational changes of GM to the employees. Thus the focus will be on Henderson’s

internal communication efforts. Furthermore, the communication efforts will be analysed from a

change management perspective since Henderson had to change GM to lead the company out of a

crisis. Moreover, this report will evaluate whether Henderson should have communicated differently,

and if necessary, suggest how the change could have been communicated.

The importance of studying change management communication lies in the fact that change

management has become a management activity of great importance today, due to the constant

changes in the marketplace, which means that today’s organisations must be flexible and able to

adapt, in order to thrive and prosper (Miller, 2009, p. 179; Cushman and King, 1995, pp. 1; 12).

1.1. Problem statement In the light of change communication theory, how did Fritz Henderson communicate the necessary

large scale organisational changes of GM to the American employees, prior to and after the

bankruptcy in 2009, and if necessary, how could the change efforts have been communicated

differently?

1 Will be referred to as ”GM”

2 Abbreviation of the electronic sources. Refer to; web1, web2 etc. in the reference list.


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1.2. Delimitations This thesis will not include an in-depth analysis of the entire change plan, and how the changes may

have affected different departments at GM since this is not the focus of this thesis. Moreover, this

thesis will not include an in-depth analysis of all of the communication and the use of communication

channels, thus some conclusions will be based on reasoned assumptions. Naturally, this will be a flaw

in this thesis, nevertheless, an in-depth analysis and discussion will be difficult to construct as GM is a

large company, and a complete analysis will be too comprehensive for this thesis.

Furthermore, this thesis will not include an analysis and discussion, nor quantitative and

qualitative research of whether the change efforts were successful. However, Fritz Henderson’s

communication efforts will be analysed, according to relevant theory, to establish whether

Henderson communicated the change effectively. In addition, the communication efforts will solely

be analysed from an American point of view since the focus is on the communication in an American

context. Therefore, this thesis will not include an intercultural study of how to communicate change.

Furthermore, the theory of external communication during crisis and reputation management has

been left out of this report. The reason for this is that despite of the fact that GM was in a crisis and

the image of GM had been tarnished for several years (Alex, 2004), it was paramount for GM to

change and reorganise its organisation and structure, prior to repairing its image, since ignoring the

need for change would probably lead GM back into a new crisis. Furthermore, it can be argued that a

change in GM’s’ culture, structure and organisation will, eventually, be reflected in the company’s

image and reputation, however, a focus on reputation management does not necessarily change the

organisation internally.

1.3. Theoretical framework

Sherratt (2005) explains the rationale of Schleiermacher’s approach to hermeneutics, which is

utilised in this thesis to analyse Henderson’s communication efforts. Schleiermacher focused on the

interpretation of the author’s own meaning and intention from a text by understanding the

intentions, emotions and the thoughts of the author.

Bhatia (1993) explains a method for structuring the analysis of texts by identifying the overall

communicative purpose and “moves” of a given text, and thereafter, he suggests that one should

analyse how each move contributes to the overall purpose of the text. To analyse each move in

Henderson’s communication, this report will draw on Aristotle’s ethos, pathos and logos (cited in

Thompson, 1999), supplied with Halliday’s register analysis (cited in Stillar, 1998).


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Cameron and Green (2009) explain the basic aspects in different types change. Furthermore, in their

book “Making Sense of Change Management”, they note the effect that one’s organisational view

has on one’s view of change management. This notion is described and supported by Anderson and

Ackerman Anderson’s (2001) notion of developmental, transitional and transformational change.

To view Henderson’s communication efforts from a change management perspective Kurt Lewin’s 3-

step change model will be used. The reason a model developed in 1951 is still valid today is due the

fact that current theorists still build on the essence of this theory. Klein (1996) has suggested specific

communication strategies for each of the steps in the Lewin-model, therefore, Klein’s work will be

used as the foundation for analysing Henderson’s communication. Furthermore, Klein’s

communication strategies for the Lewin-model will be accompanied by other theories to identify a

best-practice theory for communicating change, these include Carlopio (2003), Goodman and Truss

(2004), Richardson and Denton (1996), Armenakis, Harris and Feild (1999), Cushman and King (1995),

and Vuuren and Elving (2008). These theories provide additional knowledge on communicating

change, among others some of them touch on the aspect of two-way communication. Moreover,

Vuuren et al. (2008) explain the difference between information and communication.

1.4. Methodology This thesis will apply Schleiermacher’s hermeneutic approach to analyse and discuss how Henderson

communicated the change efforts. Schleiermacher advocated that the purpose of interpretation

should be to understand the intentions, emotions and the thoughts of a text’s author, thus

Schleiermacher was concerned with interpreting the author’s own meaning and intention from a text

(Sherratt, 2005, p. 59). In Schleiermacher’s view interpretation consists of the grammatical

dimension and the psychological dimension. The grammatical dimension is interpreted on the basis

of a textual analysis, genre analysis and an analysis of the context in which the “text” took place. The

psychological dimension is based on an understanding of the author’s cultural background, and

secondly, by identifying and empathising with the author in the specific context in which the ‘text’

took place (Sherratt, 2005, pp. 59-61).

Schleiermacher’s hermeneutic approach is chosen due to the fact that it provides a

comprehensive framework for analysing Henderson’s communication efforts, and through

interpretation this framework can cast light on the meanings and intentions with Henderson’s

communication. However, the limitation of this approach is that it assumes that there is only one

true meaning as it assumes that the interpreter can suspend his own prejudices in order to reach the


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true meaning in a text. In reality, this may be a challenge, therefore, it can be assumed that the

interpretation will not be completely objective (Skinner, 1986, p. 25).

1.5. Method To answer the question, “in the light of change management theory, how did Fritz Henderson

communicate the necessary large scale organisational changes of GM to the American employees,

prior to and after the bankruptcy, in 2009” Henderson’s communication efforts from six texts34 will

be analysed, firstly, by identifying what is communicated, and secondly, how is it communicated in

terms of rhetoric. Moreover, Halliday’s register analysis will be used to support some of the findings

from the rhetorical analysis. The reason a press conference and GM’s corporate blog, which both are

for internal and external audiences, can be used for this analysis is due to what Lotman (1973, 1977)

labels as autocommunication, which means when organisations communicate to external audiences

they communicate to themselves as well. Therefore, the internal and external communication must

essentially be the same (Cited in Broms and Gahmberg, 1983, pp. 484-489).

To answer the second question, “and if necessary, how could the change efforts have been

communicated differently” Henderson’s communication efforts will be compared to the outlined

best-practice in order to examine whether it could have been improved and how. Moreover, the

comparison will be based on the context of GM.

2. Rhetoric

Bhatia (1993) states that every text contains a number of moves (parts), and that each move has its

own sub-goal which contributes to the overall communicative purpose of a text. The overall

communicative purpose of a text is achieved by realising the sub-goal of each move. Sub-goals can be

realised by utilising a number of rhetorical strategies such as Aristotle’s ethos, pathos and logos

(cited in Thompson, 1999), which can be used to analyse the persuasion utilised in a given text.

Furthermore, a rhetorical analysis can be supported by Halliday’s register analysis. The register

analysis looks at the relationship between sender and receiver; what is talked about; and the textual

resources used to make the text cohesive and coherent (Stillar, 1998, pp. 14-57).

Bhatia’s notion of the overall communicative purpose is used in this thesis as it provides an overview

of Henderson’s communication, and thus puts more structure on the rhetorical analysis. The

3 Refers to both written and verbal communication.

4 A list of the analysed texts is included in the references under “Analysis”


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rhetorical analysis is used in this thesis due to the fact that it can reveal how Henderson persuades

the employees, and thus how each move contributes to the overall communicative purpose.

A disadvantage of the rhetorical analysis may be that it can be a comprehensive analysis, hence

the analysis may become too abundant. Furthermore, the rhetorical analysis is based on the

interpreter’s own prejudices, thus it may not be a completely objective analysis.

3. Change Management

Change management is the study of how to manage change from one state to another preferred

state. Cameron et al. (2009) suggest that change management can take place at the individual, group

or organisational level. Naturally, some of these levels overlap, however, it is important to distinguish

between the types of change management as a distinction provides a framework and an approach to

conduct the specific change (pp. 9-10). Furthermore, the assumptions one holds about how

organisations are structured and function also influence how one views change management.

3.1. Change Management and Organisational Theory

In the classical and mechanistic theory of organisations, change is viewed as a planned and controlled

activity, in which communication is of low priority as resistance can be managed, and stakeholders

only need to be told the reason for change and what to change in order to change (Miller, 2009, pp.

18; 181; Cameron et al., 2009, pp. 100-101). This view of change management is much similar to

what Anderson et al. (2001) suggested as the developmental approach to change, in which it is

assumed that employees will change if given the appropriate reasons, resources and motivation (p.

34).

If organisations are viewed as organisms, then it implies transitional change, which means that

change is still viewed as a process that can be planned, however, it only takes place due to changes in

the external environment. Furthermore, stakeholders need to be psychologically aware of the need

for change, and the change has to be well-communicated and incorporate two-way communication

to foster high employee participation in order to increase commitment, and thus be able to

implement the change (Cameron et al., 2009, pp. 103-104; Anderson et al., 2001, pp. 35-38).

Finally, scholars and practitioners argue that organisations can be viewed as complex and chaotic

entities. This perspective implies transformational change, which is defined as an uncontrollable

event with an uncertain outcome. Transformational change requires management and stakeholders


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to shift their world view completely and embrace the uncertainty (Cameron et al., 2009, pp. 104-105;

Anderson et al., 2001, pp. 39-45).

As described the organisational theory influence how change management is viewed, and thus how

the communication will take place and what is termed as successful communication. This thesis will

take departure in the notion of organisations as organisms because this approach provides a tangible

approach to change management, and makes it possible to create a plan for the communication.

Whereas, the complexity approach is more intangible, as there is no clear method for handling the

chaos, and the mechanistic view seems unrealistic today (Cameron et al., 2009, pp. 101; 105-106).

Therefore, the analysis and the theories used in this thesis will be based on the view of organisations

as organisms.

3.2. Organisational Change Management

Organisational change management is primarily concerned with the large scale organisational change

such as the implementation of new technology, structural changes, cultural changes or a merger of

two companies (Richardson et al., 1996, p. 204). As mentioned, the focus in this thesis is on the

communication and not Henderson’s change plan as such. Therefore, the next section will include a

description of a few models and a discussion of why these have been discarded as the foundation for

the analysis in this thesis.

3.2.1. Models for Organisational Change Management

3.2.1.1. Kotter

John P. Kotter has developed a well-known and widely accepted model for how to lead change in

organisations. Kotter (1995) proposes that in order to experience successful change organisations

must follow eight steps in a linear manner (pp. 59-60). Kotter (1995) argues that the primary focus of

any change process is to establish a sense of urgency, develop a vision, communicate the vision

clearly, and to empower stakeholders to act on the vision (pp. 60-67). However, the model is too

prescriptive and merely provides an overview of how to manage change, thus it does not go into

depth with specific communication strategies, but takes a more generic approach to communication.

3.2.1.2. Connor and Lake

Connor et al. (1994) present a model for planned organisational change, which looks at the

destabilizing forces (the reason for change) and what needs to be adjusted (changed) in the


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organisation to cope well with the destabilizing forces. The changes in the organisation e.g. include

strategic direction or organisational culture. Thereafter, the model looks at what methods and tactics

should be used to change the organisation, whether the change should be implemented in a

facilitative, informational or political way (cited in Miller, 2009, pp. 181-182). This model illustrates

the complexity of change in organisations as it presents the fact that organisational change can be at

different levels, and that there are different ways for implementing change in organisations.

However, this model focuses on identifying the destabilizing forces, and what can be done to adjust

too these. As a consequence, the model does not focus on the implementation process, and thus

lacks the communication aspect of change. Furthermore, the model does not include different

strategies for different stages of change, therefore, the model implies that change is implemented in

the same way from start to end.

As illustrated it can be a challenge to find a model that encompasses the complexity of change, but at

the same time, is relatively simple and include the communication aspect of change. Therefore, Kurt

Lewin’s 3-step model for organisational change will be used as the foundation for the analysis in this

thesis.

3.2.1.3. Lewin

Lewin (1951) proposed that organisational change consists of three steps. The first step is to

unfreeze the organisation, and thus prepare it for change. The second step is to change the

organisation to the desired state. The third, and final step, is to refreeze, and thus stabilise the

organisation in the new desired state (cited in Cameron et al., 2009, p. 110-111). In addition, Lewin’s

model implies that different communication strategies must be used at the three different stages

(Klein, 1996, pp. 36-38).

Furthermore, Lewin (1951) developed the idea of a force field present in any organisational

change. The force field encompasses driving and restraining forces toward a given change. Lewin

argued that the driving forces, naturally, had to outweigh the restraining forces in order for the

change to be implemented (cited in Cameron et al., 2009, pp. 110-111). Basically, there are two ways

to make the driving forces outweigh the restraining forces, and this can either be done by strengthen

the driving forces or by reducing the restraining forces. Scholars and practitioners argue that an

optimal way to increase driving forces or reduce restraining forces toward any change is through

effective communication (Goodman et al., 2004, p. 217-218).

The reason Lewin’s model will be used as the foundation for the analysis of Henderson’s

communication efforts is due to the fact that the model divides any change up into three tangible


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stages and puts emphasis on the differences in each stage. Therefore, this model is simple, and at the

same time, it includes the complexity of change as it distinguishes between the three stages. With

the model in place, the focus will now turn to the importance of communication during change, from

the perspective of organisations as organisms.

4. Communicating Change

4.1. The Importance of Communication

Scholars and practitioners argue that communication is paramount to change management due to

the fact that employees and other stakeholders, by nature, experience stress and anxiety during

change. The stress and anxiety is typically based on a fear for the unknown (Miller, 2009, 184;

Richardson et al., 1996, p. 204; Carlopio, 2003, p. 71). Therefore, communication functions as a tool

to minimise employees’ stress and anxiety because it makes the unknown known to employees

(Goodman et al., 2004, pp. 217-218). Furthermore, Carlopio (2003) argues that “People resist change

and ‘invest in’ believe systems out of fear.” (p. 74), which means that stakeholders will resist change,

and create “believe systems”, that may further enhance the resistance toward change if they are not

informed adequately during the change. This means that communication is also a way to decrease

resistance, foster openness and positive attitudes toward the change if the stakeholders’ information

needs are met (Richardson et al., 1996, p. 203-204; Goodman et al., 2004, pp. 217-218).

Furthermore, some scholars and practitioners claim that communication can increase

stakeholders’ commitment toward the change, and thus reduce resistance (Vuuren et al., 2008, p.

350; Armenakis et al., 1999, p. 108; Carlopio, 2003, pp. 71-72). The first step towards stakeholder

commitment is to provide adequate information in the eyes of the stakeholders. The second step is

to encourage the involvement and participation of the stakeholders in the change process by

listening to their input and involving them in the process. Hence, change communication is not only a

one-way process of communicating information, but also a two-way process (Armenakis et al., 1999,

p. 107; Carlopio, 2003, pp. 108-109; Goodman et al., 2004, p. 218).

As illustrated, the communication during change is important for a number of reasons, therefore, it is

important that the communication is effective and adequate in the eyes of the stakeholders.

Therefore, the next section will start with a distinction between information and communication

during change. Thereafter, the next section will examine best-practice communication strategies in

the light of organisations as organisms, and the Lewin-model.


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4.2. Communication Strategies Vuuren et al. (2008) claim that there are two types of communication during change as there is

“communication” and “information”. The difference between the two is that “information” is one-

way communication about the change, in newsletters, websites and so forth, thus information about

what is changed and why. Whereas, “communication” is viewed as two-way communication, that

focuses on interactions between the ‘change-initiator’ and the stakeholders to foster mutual

understanding and trusting relationships (p.350).

4.2.1. One-way Communication

The communication strategies presented here denote the aspect of information, and thus only one-

way communication. Klein (1996) has proposed specific communication strategies for each of the

steps in Lewin’s 3-step model for change5. However, Klein’s communication strategy is not an

exhaustive one, therefore, other scholars and practitioners’ theories will be used to expand Klein’s

communication strategy.

In the unfreeze stage the information should be concerned with preparing stakeholders for the

change by explaining the need for change, what is changed, how it will be changed and, finally, by

identifying an objective or outcome of the change (Klein, 1996, pp. 38-41). Furthermore, other

scholars and practitioners argue that it is important to inform about the timeline of the change, and

how the change will affect stakeholders in terms of what they will gain from the change and how the

change may affect their roles in the organisation (Jager, 2010, pp. 24-25; Armenakis et al., 1999, p.

103; Cameron et al., 2009, pp. 205-206). Moreover, Carlopio (2003) suggests two additional

communication strategies for change. Firstly, he suggests that good communication during change

must address what is not going to change, as this gives stakeholders a sense of stability (p. 116).

Secondly, Carlopio (2003) argues that the information must explain the differences between the

current change and any previous change interventions that may have failed in order to answer why

the current change will work (pp. 77-78).

In the change stage the communication is concerned with communicating about the progress

of the change efforts to show employees that the change progresses, and to encourage employees

further. In addition, in the second stage it is also important to provide correct information that can

challenge any misconceptions that may have emerged (Klein, 1996, pp. 41-42). Moreover, Carlopio

(2003) suggests that it is important to communicate the success and progress of any change as this

provides stakeholders with optimism (p. 116).

5 Appendix1


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In the refreeze stage the communication focuses on celebrating the implementation of the

change by highlighting the improvements and results of the change, to reinforce the new state (Klein,

1996, pp. 42-43). This is similar to the idea of informing about the progress of the change.

Finally, Carlopio (2003) elaborates on the approach to change communication as he states that any

change plan must answer the five W’s (who, what, where, how, why, when) in order to communicate

the necessary information to stakeholders during change. In addition, he argues that the five W’s

must be communicated pre-change, mid-change and post-change (p. 82), which is much similar to

the idea of Lewin’s model.

4.2.2. Two-way Communication

Scholars and practitioners also suggest communication strategies that incorporate two-way

communication. First of all, scholars and practitioners suggest that management must encourage

stakeholder participation and involve stakeholders throughout the change process (Armenakis et al.,

1999, pp. 104-108; Carlopio, 2003, pp. 108-109; Cushman et al., 1995, p. 2). Secondly, management

and stakeholders must develop mutual understanding and trusting relationship between each other

(Vuuren et al., 2008, pp. 350-351), an ideal way to build and enhance trust and relationships is

through good communications (Cameron et al., 2009, p. 230; Armenakis et al., 1999, p. 107).

4.2.3. Rhetorical Strategies

Informing and communicating about the change is important, however, it is paramount to inform

and communicate about the change in a manner that convinces employees to support or commit to

the change. Therefore, rhetorical strategies must be a part of the communication strategy to

establish trust and creditability, or to persuade the stakeholders (Armenakis et al., 1999, p. 105).

4.3. Conclusion As suggested, previously, change communication must either increase driving forces or decrease

restraining forces, therefore, this must in essence be what categorise successful communication.

Consequently, successful change communication must follow the abovementioned guidelines for

information and two-way communication, and do so in manner that convinces the stakeholders.

Furthermore, scholars and practitioners argue that continuous communication is paramount

throughout the change process, since repetition of the change messages will most likely mean that


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stakeholders have heard and remember the change messages (Richardson et al., 1996, p. 203;

Cameron et al., 2009, p. 205).

However, in order to define successful communication it is important to view the communication in a

specific context since effective communication depends on the contingencies in which it takes place

(Goodman et al., 2004 p. 218). Therefore, the next section will examine the context of Henderson’s

communication.

5. General Motors

GM was founded in 1908, in Michigan, USA. Over the years, GM evolved into one of the biggest car

manufacturers in the world with a high market share, and employed more than 300,000 people in

more than 120 countries (Web5; web6). However, in the beginning of the eighties the company saw

the first signs of difficulties as sales and market share declined due to changes in customer

expectations and the increase in competition from Japanese car manufacturers (Taylor III and

Erdman, 1992).

5.1. Successful Communication in a Context

This section will examine the history of GM’s change efforts and the context in 2009 in order to be

able to establish what can be termed as successful communication in this context.

5.1.1. Previous Change Efforts

GM has initiated several change efforts to overcome decreasing market share, unstable financial

situations, negative brand image and so forth. The change efforts have included reorganisations,

restructuring and changes in culture to improve GM’s flexibility and adaptability to the external

environment. However, most of these change efforts have failed due poor management and

communication (Alex III et al., 1992; Alex III, 2004).

5.1.2. The Context in 2009

Fritz Henderson became CEO of GM, March 30 2009. His primary focus was to restructure GM in sixty

days otherwise the U.S. Government would enforce a bankruptcy of the company (web2). June 1st,

2009, the company declared bankruptcy, and at the same time obtained approval from the U.S

Government for financial support in order to exist as a company. This support was only granted due


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to the fact that GM had shown signs of improvement and had a clear plan for a restructure of the

company (web1). On July 10th 2009, GM exited bankruptcy as the company sold some valuable assets

(Smerd, 2009). Nonetheless, GM was still in a crisis and had only obtained support from the U.S.

Government due to signs and promises of improvement, therefore, GM still had to restructure its

organisation, urgently, in order to repay the debt and continue to exist.

5.1.3. Henderson’s Change Efforts

Henderson had two overall focus points in his change efforts: Firstly, improve competitiveness by

downsizing and decreasing the number of brands. In addition, restructure the company to make it

less bureaucratic and cut unnecessary layers of management, and thus save money and improve

speed of decision making. Secondly, Henderson wanted to improve the market focus by changing the

culture of the company and build cars according to the customers’ needs and wants (Smerd, 2009).

In the light of Henderson’s change efforts, the focus can now turn to a definition of Henderson’s

communicative purpose for this change communication.

5.1.4. Communicative Purpose

The overall communicative purpose of Henderson’s change communication must be defined as this is

the foundation for analysing whether the communication was successful. The primary purpose of

Henderson’s communication must have been to convince employees, to commit to the proposed

changes, despite of the fact that several of the employees may have experienced failed change

efforts, previously, at GM. Finally, the purpose of Henderson’s communication can be summed up by

stating that the overall purpose of the communication must have been to increase the driving forces

or decrease the restraining forces in relation to this change.

5.1.5. Successful Communication

In order for Henderson to either increase driving forces or decrease restraining forces he must build

his communication on the best-practice for communicating change and the context. In a larger

perspective, for this communication to be successful it is important that this change is communicated

swiftly, and emphasises that the change must be initiated immediately, due to the fact that GM was

in a crisis.

In relation to the Lewin-model, this means that Henderson in the unfreeze stage must inform

employees why GM needs to align its brands with customers, and why GM needs to become more

competitive and thus downsize and restructure its business. Essentially, Henderson must answer the


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5 W’s, and thus inform employees about what is changed, how it is changed, when it is changed and

so forth. Moreover, Henderson must also inform employees about what is not going to change

during this period, and inform about why this change will work when other efforts have failed. In the

change stage, Henderson must still strive to answer the 5 W’s and continue to communicate his

initial message. Furthermore, Henderson must also inform about the progress of the change and

celebrate the achieved progress of the change up to this point. In the refreeze stage Henderson must

focus on celebrating the implementation of the change in order for it to remain.

Throughout the change process, Henderson must also commit to open communication and

establish two-way communication with employees to make them feel involved in the change by

answering their questions and by listening to their input and ideas. Moreover, it is also important for

Henderson to create trust between him and the employees.

Furthermore, Henderson must remember to communicate the same messages continuously

during the change, and remember to communicate the success and progress of the change. Finally,

Henderson must adhere to the rhetorical strategies for persuasion and building trust to convince

employees to commit and support the change.

5.2. Henderson’s Change Communication The analyses are conducted in order to establish how each text constitutes to the overall

communicative purpose, and thus how Henderson uses each text as a move to accomplish the

communicative purpose.

5.2.1. Informing

To analyse these texts, each analysis will be separated into two parts, firstly, each analysis will look at

what is being said and which questions are answered. Secondly, each text will be analysed in terms of

rhetorical strategies, which will be accompanied with additional analysis from Halliday’s register

analysis, to further emphasise each move. Furthermore, the texts that will be analysed has been

selected in accordance to what can be considered as unfreeze, change and refreeze communication

in order to structure and give an overview of the analysis.


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5.2.1.1. Text 1

This analysis is based on an extract6 (10:30-17:40)7 from a press conference held on March 31st 2009,

hence this press conference is held the day after Henderson was appointed CEO. An analysis of the

press conference reveals that Henderson engages in unfreeze communication, as he informs about

why GM must change and so forth.

During the press conference Henderson uses an assessment from an automobile task force,

appointed by the American government, to provide a reason for change, as this assessment states

that GM’s current plan is not adequate in relation to the challenges that GM faces. In order to follow

this assessment, Henderson informs employees about a four-step revised plan that will help GM

improve in four areas. The three first steps are about improving the financials in terms of

profitability, cash flow and the balance sheet by initiating operational restructuring. The forth step is

about improving the competitiveness of GM, here Henderson states that GM must reinvent itself by

becoming competitive in the marketplace by producing and selling quality cars that fit the

marketplace. With these statements Henderson states what will change at GM, and partly, how it will

change. Furthermore, Henderson states that the changes of GM must, at best, take place in the sixty

day period GM has been given to restructure, by the American government. Hence, Henderson also

answers how long time the change must take. However, Henderson also mentions the fact that GM

may have to declare bankruptcy to change, but that GM has developed a contingency plan in the

case of bankruptcy, thus GM can emerge quickly from a bankruptcy. Nevertheless, Henderson states

that GM will successfully change, quickly.

5.2.1.1.1. Rhetorical Analysis

In relation to ethos, Henderson is trying to establish trust in his change plan by using an assessment

of GM’s viability plan from the automobile task force, as the task force states that GM viability plan is

not adequate. Therefore, Henderson uses this assessment as a method or reason to emphasise the

need for change. This is further illuminated when the coherence in this extract is analysed as this

reveals that Henderson, continuously, use anaphoric reference to provide a reason why GM needs to

change. This can be seen when he says, “(...) now that the task force has, basically, reached their

findings the question is how do we engage to execute a revised plan (...) what is a revised plan really?

Is in four different areas. One: basically developing a business plan that is sustainable (...). The

second is a clean balance sheet (...)” (12:02)8.

6 This extract is chosen because this is where Henderson engages in change communication. The rest of the

press conference is about showing gratitude, customer insurance and answering questions from journalists. 7 The start and end of the extract.

8 The start of the quote.


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Furthermore, Henderson applies situated ethos when he states, “(...) there has never been a

successful turnaround in the automotive industry, that I am aware of, that is done on either one or

the other side of the ledger, you have to do both (...)” (17:08), with this statement Henderson implies

that he is an expert, and thus further emphasises his credibility when talking about the need for

change. Furthermore, he uses this ‘expert status’ to state that the change must happen “on both

sides of the ledger” which, essentially, means that GM must improve its financial situation by e.g.

downsizing. However, GM must also improve its culture and “win in the marketplace” by producing

quality cars and so forth.

Finally, Henderson states that the possibility of a bankruptcy is realistic given the situation that

GM is in - “(...) if we do need to resort to a bankruptcy process (...)” (10:06). With this statement

Henderson strengthens his credibility as he is being realistic, and at the same time, he makes sure

not to give false promises or hopes to the employees of GM, and thus not disappoint the employees

on a long-term basis, which may have caused his credibility to decline.

Henderson uses his established credibility to support his use of pathos. This can be seen in the

extensive use of declarative sentences, in which Henderson presents his statements as factual, and

thus impose his authority on the hearer. An example of this is when Henderson states what GM

needs to change in order to become a much improved company. Therefore, Henderson uses his

credibility to persuade the audience into believing in the need for change.

Moreover, it is noteworthy that Henderson does not apply emotional language to persuade

the audience. Henderson does not make a strong emotional appeal to the employees, to do sacrifices

in order to save GM. The fact that Henderson does not use strong emotional language in this extract

may improve his credibility as he can be seen as neutral. However, it may also weaken the

commitment to the change, as it can be argued that a stronger emotional appeal, in which

Henderson shows passion for the change would emphasise the need for change further and thus

develop a stronger commitment (Thompson, 1999, pp. 9-10).

In terms of logic, Henderson reasons why, what and how GM must change, firstly, by stating that GM

is in a crisis, which is based on the assessment from the task force, with this Henderson implies that

employees may have to be laid off if GM does not change. Secondly, Henderson provides a four-step

revised plan for how to improve GM’s’ situation. Thirdly, Henderson claims that the GM will change

successfully whether it is through a bankruptcy or not. Furthermore, he reasons that a “successful

turnaround” must incorporate improvements in financials and market focus. Therefore, Henderson

uses this argument as a reason for supporting his own change efforts.


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5.2.1.2. Text 2

This analysis is based on a blog-thread9 posted by Henderson, on April 27th 2009. An analysis of this

blog-thread reveals that Henderson engages in unfreeze communication, as Henderson talks about

what needs to be done in order to restructure GM, and thus make GM “more customer-focused,

leaner and cost-competitive.” Therefore, this information is in continuation of what Henderson

communicated at the press conference as this blog-thread provides information on what specifically

needs to be done. Henderson presents four concrete steps to restructure GM - the four steps are:

“deeper, faster execution”, “sustainable results”, “healthy balance sheet” and “technology.” For

deeper and faster execution Henderson wants to downsize the labour force and make reductions in

the number of brands, plants, and executives. These efforts will, accordingly, to Henderson create

sustainable results. To create a healthier balance sheet Henderson suggests that the company must

decrease its debt and initiate other financial improvements. Finally, Henderson states that GM will

keep investing in new technology, despite of the challenges the company faces. The information in

this blog-thread answers what will change, how it will be changed, what the outcome of the change

will be. Moreover, it partly answers what will not change as it can be assumed that areas not

mentioned here will not be changed.


An analysis of the text reveals that Henderson tries to enhance his credibility by stating beliefs, which

can be assumed, to be similar to the employees’ beliefs. For example in the headline as it states,

“Tough but necessary steps to restructure GM”, another example is when Henderson describes

President Obama’s remarks, about GM’s plan not being good enough, as “Tough medicine, given the

progress and painful cuts we’d made up to that point”, the final example is “The actions we’re

announcing today are difficult but necessary (…)”. In all of these three statements attitudinal

adverbials such as “tough”, “painful” and “difficult” are used, these adverbials illustrate that

Henderson thinks that these changes are tough and painful. The reason these statements can

enhance Henderson’s credibility is due to the fact that the beliefs can be assumed to be similar to the

beliefs of employees, as they most likely view downsizing etc. as tough. Therefore, Henderson and

the employees find common beliefs, which can be argued to establish trust and credibility.

Furthermore, Henderson also establishes goodwill by making these statements as he denotes

that he understands these changes are tough and difficult as they may mean downsizing and so

forth. Therefore, Henderson implies concern for the employees and shows empathy, which may

9 Appendix2


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further enhance his credibility since he does not view the consequences of these changes as

irrelevant.

In the last part of the text, Henderson uses an emotional appeal as he applies assuasive language to

convince the employees to commit to change since he states, “Make no mistake, this is not just

about sacrifice, this is about putting GM on a path to win. The reinvented GM will unleash our

talented work force (…)” and he continues by stating, “Our world-class supplier lineup will be capable

of providing leading-edge innovation and quality. Our balance sheet will give us the stability and

flexibility to move quickly on new products, technologies and marketplace initiatives.” It is clear from

these examples that Henderson assures employees that with these changes GM will emerge as a new

and much improved company. Therefore, Henderson connotes that by committing to this change

employees will help improve GM. In addition, the positive tone and the use of sensational language

such as “world-class” and “leading-edge”, paint a much more positive image of GM post-change,

essentially, Henderson implies that GM is not “world-class” now, but that the company will become

that after the change.

Furthermore, Henderson uses evaluative language when he writes, “I want to thank everyone

who is working with us to make GM a more customer-focused, leaner, cost-competitive company.”

With this statement Henderson praises employees that have already made an effort in improving

GM, and thus encourages others to do the same. Moreover, Henderson states, “The reinvented GM

will unleash our talented work force (…)” with this statement Henderson implies that it is only

through a change process that the work-force can “unleash” their talent, and thus that the current

situation prevents the work force from “unleashing” its talent.

As mentioned, Henderson concludes that the four suggested changes will make GM a more

“customer-focused, leaner, cost-competitive company.” Eventually, this will lead to results such as

“world-class” and “leading-edge” innovation and quality. That the four changes will improve GM’s

situation is based on a rather logical reasoning, however, this logic may be challenged by employees

that have experienced previous change efforts at GM, and thus find it difficult to believe in new

changes.

5.2.1.3. Text 3

This analysis is based on a blog-thread10, from July 10th 2009. In this blog-thread Henderson applies

change communication as he praises the current progress of GM and talks about the fact that GM

has exited bankruptcy, hence Henderson gives employees reason for optimism. Furthermore,

10

Appendix3


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Henderson emphasises three focus points, and why these are necessary as he states that GM must

focus on customers, cars and culture to become more competitive and profitable. In large,

Henderson states that GM must revolve around the customers as the cars must be built for the

customers and judged by them. Therefore, Henderson states that he will empower the employees to

listen to the customers. Henderson argues that a focus on customers will help GM build quality cars

that can be considered as “best in class” by the customers. In addition, Henderson claims that the

culture of GM must change to focus on customers, faster execution, more risk averse, and more

accountability. To change the culture Henderson will change the structure of GM by reducing the

levels of management, and thus create a flatter organisation with more responsibility for the

employees closest to the customers. With the statements about the three focus points, Henderson

highlights what will be changed and how it will be changed, therefore, he also challenges any

misconceptions that may have arisen as he provides the employees with concrete examples of what

is next. Finally, Henderson emphasises that all the people associated with GM must be ready for

change.


First of all, in a larger context, it can be argued that Henderson has established his credibility by

navigating GM out of bankruptcy, and thus kept his promise of changing GM to a more profitable and

competitive company. Therefore, Henderson has proved that he has the required knowledge, and

thus improved his status as an authority/expert on the subject. As a consequence, the employees are

more likely to trust Henderson.

In addition, Henderson tries to strengthen his credibility by stating, “This [the end of

bankruptcy process] will allow everyone at GM, including me, to return to the business of designing,

building and selling great cars and trucks, and serving our customers. And there is nothing we want

to do more than that!” The fact that Henderson states, “and there is nothing we want to do more

than that” is a method of establishing credibility if the employees agree with this statement, as they

will share a common belief.

Furthermore, Henderson uses a strong appeal to the employees’ emotions as he uses the metaphor

“battlefield triage” to describe the bankruptcy process. With this metaphor Henderson compares the

bankruptcy with the process of battlefield triage, which means that scarce medical resources are only

allocated to those who need it the most and will, at the same time, benefit from medical treatment.

With this Henderson implies that GM, during the bankruptcy, was forced to select which businesses

to focus on, and thus which ones to neglect or sell due to the fact that GM only had limited


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resources. The use of this metaphor justifies the need to sell or close certain businesses within GM.

Therefore, the metaphor may handle any frustration from employees affected by the closure or

selling of some GM businesses. Furthermore, Henderson uses the metaphor to create a contrast

between the bankruptcy process, and the time after the bankruptcy process as the bankruptcy is

described as a time with “battlefield triage”, which connotes a negative period. Thereafter,

Henderson states that the bankruptcy process has ended by stating, “this will allow everyone at GM,

including me, to return (...)” the use of the word “return” connotes that everyone at GM can now

return to a more pleasant state where the focus is on “designing, building and selling great cars and

trucks, and serving our customers.” Therefore, the metaphor is used to describe a horrific and a

more joyful state at GM.

In relation to logos, Henderson is assertive, throughout the text, and suggests some cause and

effect scenarios which can be seen in these statements: “because if we don’t get this right, we don’t

get to do anything else. It’s that simple”, and “to win, we need to stabilize and grow our business

(…)” with these statements Henderson implies if it is not done this way, then GM will not experience

success. Therefore, Henderson reasons that the three focus points will make GM an improved

company in terms of customer service, market focus and speed of decision making.

5.2.1.4. Text 4

This analysis is based on a blog-thread11, from November 16th 2009. From the analysis of this blog-

thread it is evident that Henderson applies refreeze communication as he informs employees about

the fact that GM has achieved preliminary managerial earnings, which demonstrates that GM is on

the right track. Furthermore, Henderson reports on a stabilising market share, and balance sheet

with a healthier cost structure. Finally, Henderson states that GM has begun to repay back its loans

from the public. Therefore, Henderson claims that GM is “showing solid progress (...).” With these

statements it is evident that Henderson celebrates the progress of the change and that he

emphasises that the change efforts have worked. However, Henderson cautions employees not to

think that the change has ended, in fact he stresses the importance of still following the change plan

to make GM a more sustainable company.

11

Appendix4


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Again, Henderson develops his credibility by proving that the change initiatives suggested, earlier in

the year, helped improve the competitiveness and profitability of GM, which is illustrated by a

stabilising market share and balance sheet.

In relation to emotional appeal, Henderson states that “on July 10, my management team and I

made a commitment to you (…)”, with this statement Henderson appeals to the employees’

emotions as he states that the management team has worked hard for the employees to change GM

and make the company more viable, and thus made it possible for employees to keep their jobs.

Therefore, the employees may feel obliged to show commitment to the change.

Furthermore, Henderson appeals to emotions by first presenting the fact that GM’s financials

are improving, and thus Henderson presents a relief for the employees as the change works.

Thereafter, Henderson states that everybody must continue to work hard to change as there still is a

long way. By first telling about the progress of the change Henderson has made employees more

optimistic about the change. Finally, the statement “GM is still in a loss position” appeals to the

employees’ emotions as a “loss position” connotes negativity, moreover, Henderson also implies that

GM may still close its business if the company does not continue to improve.

From an analysis of the logic applied in this text, it is evident that Henderson implies that the change

plan must still be followed as it has shown signs of progress. Furthermore, Henderson also implies

that it is only due to the change plan that GM has experienced progress, however, it might as well

have been due to other factors such as an improved economy and so forth.

5.2.2. Two-way Communication

From the previous analyses it is evident that Henderson did not utilise two-way communication

through these. However, Henderson did in fact utilise two-way communication, this can be seen

through other blog-threads where Henderson regularly posted updates, chat-sessions and so forth to

communicate with employees and other stakeholders. It is important to note that this analysis will

not include an examination of the rhetorical strategies since the focus here is on how Henderson

communicated with the employees.

5.2.2.1. Text 5 and 6

In these two texts there are examples of two-way communication. First of all, in the video “The case

for GM – Fritz Henderson update on GM business” Henderson answers some common questions


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from employees (and other stakeholders). The fact that Henderson answers these questions implies

that he listens to what the employees have to say. Among others, Henderson answers how he will

evaluate the different brands to determine their value, and whether it is likely for GM to declare

bankruptcy. In the text “Keeping the conversation open”12 Henderson shows that he listens to the

reactions to the change due to the fact that he answers some questions posted as a response to his

blog-thread “GM drives for open communication”, posted the day before (web7). However, in some

of the questions it is difficult to distinguish between questions from customers or employees,

nonetheless, the fact that Henderson answers these questions may satisfy employees’ information

needs as well. Moreover, when Henderson answers the questions he expresses gratitude for the

question or comment, which can be seen from these quotes “Mitch, thanks for your comment.” and

“Robert, I appreciate your comment.” In addition, Henderson expresses understanding or empathy if

the comment is a rather skeptical one, this can be seen from “Alex, I share your passion for taking

care of our brands (…)” and “John, I can understand your skepticism.” By answering in a thankful and

non-defensive manner it can be assumed that Henderson improves his congeniality as he illustrates

that he listens, and does not only defend his beliefs.

Furthermore, Henderson reduces employees’ uncertainty about the change by answering the

questions from employees, and thus increases the probability for them to commit to the change.

Finally, Henderson illustrates that he listens to the employees, and thus shows concern for them,

which may help build trust.

5.2.3. Conclusion

From the analyses it is evident that Henderson communicated the change, somewhat, according to

the identified best-practice of change communication. As he, in the unfreeze stage, informed the

employees about the need for change, what is changed, how it is changed, what the outcome of the

change will be, and when the change will start and end. However, Henderson did not directly inform

about what is not going to change, and how the changes will affect different groups of employees.

Furthermore, it can be argued that Henderson did not communicate sufficiently during the press

conference, on March 31st 2009, as Henderson hints the need for downsizing, but he does not

answer the question directly, therefore, he leaves room for misconceptions to arise. Moreover,

Henderson did not go into depth with what should be changed during the press conference, he

merely outlines the changes, therefore, he may have neglected to answer some vital questions that

the employees might have had. In addition, the analyses showed that Henderson failed to address

12

Appendix5


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the previous change efforts at GM, by informing about why this change is different and why it will

work.

Moreover, the analysis showed that Henderson, during the change and refreeze stage,

informed about the progress of the change rather effectively, as he on two occasions celebrated the

progress of the changes. Finally, the analysis showed that Henderson keeps reinforcing the need for

change, how it will be changed, and he repeats the fact that GM will emerge as a stronger company.

Therefore, Henderson adheres to the idea of continuous communication to reinforce the change

messages, and thus continues to challenges any misconceptions.

In relation to persuasion it was found that Henderson did use a mix of ethos, pathos and logos in the

four analysed texts. Furthermore, the analyses showed that Henderson quickly establishes his

credibility and status as an expert by utilising a mix of expert-statements, and by showing empathy

for the employees. Moreover, Henderson uses his status as an expert and his credibility to apply a

mix of declarative sentences and appeal to emotions by e.g. metaphors, colourful and evaluative

language. Finally, Henderson states that if the employees follow his change efforts, then GM will

emerge as a much improved company with a sustainable business, which can be argued to be a well

reasoned argument. However, it can be argued that Henderson is not passionate about

communicating the change, this is illustrated in the first text in which Henderson seems to

communicate rather neutrally.

In relation to two-way communication, it is evident that Henderson is aware of the fact that change

communication must incorporate two-way communication as he answers questions from different

stakeholders. However, Henderson does not ask for direct input from employees in these texts, he

merely shows gratitude for their questions and concerns. Moreover, in the four other analyses

Henderson did not ask for input either, which means that employees did not have direct influence on

the change. This may have weakened the commitment to the change. However, it is important to

note that GM is a large company, therefore, if Henderson had asked for input it may have

“paralysed” the company further, and thus made it more difficult to initiate the change if all inputs

were to be listened to. Nonetheless, from this analysis it can be concluded that Henderson, according

to theory, has developed some sense of trust and understanding between him and the employees.

Finally, in relation to the overall communicative purpose, it can be concluded that Henderson did

apply different moves to achieve some of the overall communicative purpose as he informed about

most of the aspects identified in the best-practice of change communication. Moreover, Henderson

did apply other moves (persuasion techniques) to persuade the employees to commit to the change.


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Furthermore, Henderson did emphasise the need for changing GM quickly. In addition, Henderson

did illustrate that he listened to employees’ concerns and answered their questions. Therefore,

according to theory, Henderson has increased the driving forces and decreased the restraining

forces, and thus improved the commitment to the change.

However, Henderson may also have weakened the commit to the change as he failed to

address some important aspects, such as handling the previous failed change efforts by informing

employees about why this change will work. In addition, Henderson was a bit unspecific during the

unfreeze stage as he did not go into details about downsizing, which he had implied during this stage.

Finally, Henderson did not encourage employees to come with input and so forth.

5.3. Improvements Based on the analyses it is evident that Henderson could have improved the communication. Firstly,

in terms of information, Henderson could have been more specific, and thus informed in greater

detail about what needed to be changed and the downsizing aspect of the change. This should have

been done at the first press conference, or a short time after, as the analyses showed that

Henderson did not inform about this until April 27th. Furthermore, Henderson should have informed

about why his change efforts would work, when others have not. Henderson could have done this by

emphasising the key differences between his change efforts and the previous change efforts, and by

highlighting what he wants to do different.

Secondly, in relation to communication, Henderson should have encouraged employee input

and involved the employees more in the change process. Henderson could have involved employees

in the process by creating focus groups, surveys or by appointing a spokesperson for larger groups of

employees, and asked for their concerns and how they would suggest solving the current crisis.

However, as noted, this should be done with caution, as too extensive participation may paralyse the

organisation.

Thirdly, in relation to persuasion, it may have been more beneficial for Henderson to have

been more passionate when communicating the change to employees as this may have improved the

employees’ passion for improving GM (Thompson, 1999, pp. 9-10).

6. Critical Perspective

The main critique of this thesis can be founded in other views of organisations, and especially, in the

theory of organisations as chaotic entities since this organisational view has a fundamentally

different approach to change management. In the chaotic view of organisations, change


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management is viewed as an uncontrollable and non-linear event, in which change emerges by itself,

thus management can only guide and empower employees, but not control the change (Cameron et

al., 2009, p. 105). Therefore, from this point of view, the communication must take departure in

enabling stakeholders to handle the chaos and uncertainty by empowering the stakeholders to

develop their skills through communication such as dialogue, coaching and so forth (Anderson et al.,

2001, pp. 44-45). As illustrated these two assumptions about organisations are contradictory.

Therefore, the chaotic view of organisations challenges the foundation for the analysis in this thesis,

and thus the findings and the conclusions derived from this analysis can be questioned from this view

point. However, it is not the methodology that can be questioned from this, but merely the theories

and models used. Therefore, the Lewin-model and the accompanied communication strategies

developed by Klein and the other theorists can be criticised, as these theories suggest that change is

a linear and manageable event, which can be successfully implemented if particular communication

strategies are followed.

In addition, the Lewin-model has some general disadvantages attached to it, such as the simplified

notion that change can be divided up into three separate parts. However, the line between each

stage is not as clear, since a mix of the different communication strategies can be used in the same

text. This can be illustrated from the analysis of text 3 in which it can be argued that Henderson

engages in a mix of unfreeze and change communication, as he praises the progress of the change,

and at the same time presents what may look as new change efforts. Moreover, the fact that the

Lewin-model implies that change has an identifiable conclusion can be criticised as it can be a great

challenge to identify the conclusion of a given change, and some argue that change does not have a

conclusion (Carlopio, 2003, p. 162).

Finally, the best practice theory can be questioned by other theories, which suggest other methods

of communicating change, within the view of organisations as organisms. Some scholars suggest that

change communication must incorporate storytelling as they argue that storytelling is an effective

tool to elicit employees’ emotions and commitment to the change (Vuuren et al., 2008, pp. 355-356).

Moreover, Carlopio (2003) argues that change communication must differentiate between the

different stakeholders, since different stakeholders have different information needs (p. 85).

Therefore, Carlopio (2003) suggests that change communicators must create a simplified

segmentation, of no more than 3-5 segments, and thereafter, analyse each segments’ thoughts

about the change in order to be able to communicate the necessary information to each segment

(pp. 86-89).


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7. Conclusion

According to theory and the analysed communication, it can be concluded that Henderson did follow

most of the best-practice theory outlined as he, continuously, reinforced the change message,

informed about why the change was necessary, what would be changed, the progress of the change

and so forth. In addition, Henderson also demonstrated that he listened to the employees’ concerns,

and answers some of their questions in order to build trust and understanding. Furthermore, in

relation to rhetoric, the analyses showed that Henderson did use a mix of ethos, pathos and logos to

persuade the employees to commit to the change. The analyses showed that Henderson used ethos

by using expert-statements and by showing empathy for the employees. Henderson used pathos by

applying metaphors and colourful language. Finally, Henderson used logos by reasoning that if the

change plan was followed, then GM would emerge as an improved company. Therefore, it can be

concluded that Henderson utilised different moves to reach the overall communicative purpose of

the change communication, and thus increased the driving forces or decreased the restraining forces.

However, the analyses also showed that Henderson failed to comply with some of the best-practice

theory as he did not inform about why his change efforts would succeed, when previous change

efforts have not. Moreover, Henderson failed to be specific about what needed to be changed and

how it would be changed, during the first part of the change. In relation to two-way communication,

Henderson did not encourage two-way communication throughout the change process. In terms of

rhetoric, Henderson did not seem passionate when communicating the change. According to theory,

the fact that Henderson failed to comply with all of the best-practice theory means that the

commitment to the change may have been weakened.

Therefore, it was suggested that Henderson could have informed in greater detail about what

should be changed, how it should be changed, and how his change efforts were different from

previous change efforts at GM. Moreover, it was suggested that Henderson could have encouraged

employee input, and involved the employees more in the change process. Finally, it was suggested

that Henderson could have been more passionate when communicating the change. According to

theory, Henderson could have increased the driving forces or decreased the restraining forces

further, by following these best-practice guidelines, and thus increased the employees’ commitment

to the change.


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Strategies for Today’s Transformational Leaders. San Francisco: Jossey-Bass/Pfeiffer.

Bhatia, V. K. (1993). Analysing genre: Language use in professional settings. London: Longman.

Cameron, E. & Green, M. (2009). Making Sense of Change Management: A Complete Guide to the

Models, Tools & Techniques of Organizational Change. (2th ed.). London: Kogan Page.

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Cushman, D. P. & King, S. S. (1995). Communicating Organizational Change: A Management

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Theory from Ancient Greece to the Twenty-First Century. Cambridge University Press.

Skinner, Q. (1986). The Return of Grand Theory in the Human Sciences. Cambridge University Press.

Stillar, G. F. (1998). Analysing Everyday Texts: Discourse, Rhetoric and Social Perspectives. Sage

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Thompson, P. (1999). Persuading Aristotle: The Timeless Art of Persuasion in Business, Negotiation

and the Media. Chicago: Independent Publishers Group Distributor.

Articles

Armenakis, A. A., Harris, S. G. & Feild, H. S. (1999). Making Change Permanent: A Model for

Institutionalizing Change Interventions. Research in Organizational Change and Development,

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Change Management, 9, 32-46. Retrieved February 20, 2011, from


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Web References

Web1: Clark, A. (2009, June 2). General Motors declares bankruptcy – the biggest manufacturing

collapse in US history. Guardian.co.uk. Retrieved February 1, 2011, from

http://www.guardian.co.uk/business/2009/jun/01/general-motors-bankruptcy-chapter-11

Web2: Hornick, E. (2009, March 30). Obama extends short federal lifeline of GM, Chrysler.

CNNPolitics. Retrieved February 13, 2011, from

http://edition.cnn.com/2009/POLITICS/03/30/obama.autos/index.html?iref=allsearch

Web3: Welch, D. (2009, March 30). GM’s Fritz Henderson, the New Man on the Spot. Bloomberg

Businessweek. Retrieved February 13, 2011, from

http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090330_397672.htm

Web4: Henderson, F. (2009, April 1). The Case for GM: “We Will Get the Job Done”. Retrieved March

28, 2011, from

http://fastlane.gmblogs.com/archives/2009/04/the_case_for_gm_we_will_get_the_job_done.

html








http://www.emeraldinsight.com/

http://www.guardian.co.uk/business/2009/jun/01/general-motors-bankruptcy-chapter-11

http://edition.cnn.com/2009/POLITICS/03/30/obama.autos/index.html?iref=allsearch

http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090330_397672.htm

http://fastlane.gmblogs.com/archives/2009/04/the_case_for_gm_we_will_get_the_job_done.html

http://fastlane.gmblogs.com/archives/2009/04/the_case_for_gm_we_will_get_the_job_done.html


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Web5: Company Profile. General Motors Homepage. Retrieved February 3, 2011, from

http://www.gm.com/corporate/about/company.jsp

Web6: Flint, J. (2007, February 1). Pumping On The Brakes. Forbes. Retrieved April 23, 2011, from

http://www.forbes.com/2007/01/01/gm-market-share-oped-cz_jf_0102flint.html

Web7: Henderson, F. (2009, June 1). GM Drives for Open Communication. Retrieved March 13, 2011,

from http://fastlane.gmblogs.com/archives/2009/06/ceo.html

Analysis

Text 1: Press conference with Fritz Henderson (2009, March 31). Retrieved April 10, 2011, from

http://www.www.cspan.org/Events/General-Motors-CEO-Fritz-Henderson-Press-

Conference/13345-1/

Text 2: Henderson, F. (2009, April 27). Tough But Necessary Steps to Restructure GM. Retrieved

March 20, 2011, from

http://fastlane.gmblogs.com/archives/2009/04/tough_but_necessary_steps_to_restructure_g

m.html

Text 3: Henderson, F. (2009, June 10). The New GM: Day One. Retrieved March 20, 2011, from

http://fastlane.gmblogs.com/archives/2009/07/the_new_gm_day_one.html

Text 4: Henderson, F. (2009, November 16).GM Announces Preliminary Managerial Earnings.

Retrieved March 25, 2011, from

http://fastlane.gmblogs.com/archives/2009/11/gm_announces_gms_preliminary_managerial_

earnings.html

Text 5: Henderson, F. (2009, June 02). Keeping the Conversation Open. Retrieved March 21, 2011,

from http://fastlane.gmblogs.com/archives/2009/06/keeping_the_conversation_open.html

Text 6: Video session with Fritz Henderson (2009, April 17), in: The Case for GM: Update from GM

CEO Fritz Henderson. Retrieved April 14, 2011, from

http://fastlane.gmblogs.com/archives/2009/04/the_case_for_gm_update_from_gm_ceo_fritz

_henderson.html

http://www.gm.com/corporate/about/company.jsp

http://www.forbes.com/2007/01/01/gm-market-share-oped-cz_jf_0102flint.html

http://fastlane.gmblogs.com/archives/2009/06/ceo.html

http://www.www.cspan.org/Events/General-Motors-CEO-Fritz-Henderson-Press-Conference/13345-1/

http://www.www.cspan.org/Events/General-Motors-CEO-Fritz-Henderson-Press-Conference/13345-1/

http://fastlane.gmblogs.com/archives/2009/04/tough_but_necessary_steps_to_restructure_gm.html



http://fastlane.gmblogs.com/archives/2009/11/gm_announces_gms_preliminary_managerial_earnings.html


http://fastlane.gmblogs.com/archives/2009/06/keeping_the_conversation_open.html

http://fastlane.gmblogs.com/archives/2009/04/the_case_for_gm_update_from_gm_ceo_fritz_henderson.html

http://fastlane.gmblogs.com/archives/2009/04/the_case_for_gm_update_from_gm_ceo_fritz_henderson.html


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Appendix

Appendix 1

From Klein, S. M. (1996). A Management Communication Strategy for Change. Journal of

Organizational Change Management, 9, 32-46.

Appendix 2

Tough But Necessary Steps to Restructure GM

By Fritz Henderson GM President and CEO

Four weeks ago, President Obama announced that GM’s overall restructuring plan did not go far enough to warrant substantial new support from the U.S. government. Tough medicine, given the progress and painful cuts we’d made up to that point. But the message was clear: we simply must go faster and deeper to restructure GM – out of court if possible, in court if necessary – and that’s exactly what we’re doing.

Today, we’re announcing a number of tough but necessary actions to ramp up our U.S. turnaround efforts in four focus areas:

Deeper, faster execution: First, we’re accelerating our U.S. brand and nameplate rationalizations, dealer consolidation, plant closings, and hourly employee and labor-cost reductions. We also expect to implement additional salaried employee and executive reductions.

http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=3&docid=53947


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Sustainable Results: The actions we’re announcing today position us for sustainable success by establishing stronger brands, fewer nameplates, and a world-class dealer network. They will also allow us to significantly increase our North American structural-cost reduction and dramatically reduce our U.S. breakeven volume, enabling the company to be profitable at today’s very low industry-sales volumes.

Healthy Balance Sheet: We’re also announcing today a number of key initiatives to restructure GM’s balance sheet, including a bond exchange aimed at reducing our unsecured debt by at least $24 billion, a goal of exchanging at least half of our VEBA obligations (about $10 billion) to GM common stock, and a request of the U.S. Treasury to convert at least half of GM’s government debt to GM common stock.

Technology: Finally, despite the challenging business conditions, we’re keeping development of our mainstream alternative technology vehicles on track, including the much-anticipated Chevrolet Volt.

The actions we’re announcing today are difficult but necessary, and they affect every single person associated with our company. I want to thank everyone who is working with us to make GM a more customer-focused, leaner, cost-competitive company.

Make no mistake, this is not just about sacrifice, this is about putting GM on a path to win. The reinvented GM will unleash our talented work force to work within a cost structure unrivaled in the industry. Our product line will be offered within sharply focused brands that lead in design, technology, quality and fuel efficiency. Our dealer organization will be resized to compete in today’s world with a volume and profitability to provide a great customer experience. Our world-class supplier lineup will be capable of providing leading-edge innovation and quality. Our balance sheet will give us the stability and flexibility to move quickly on new products, technologies and marketplace initiatives. And at the same time, we’ll listen and respond to the people who matter most – our customers.

Today’s announcements continue the reinvention of GM. I have every confidence that we will achieve our goal.

Retrieved from http://fastlane.gmblogs.com/archives/2009/04/tough_but_necessary_steps_to_restructure_gm.html

Appendix 3

The New GM: Day One


Today marks a new beginning for GM. The last 100 days have shown us that a company not known for quick action can move very fast, indeed. Starting today, we take the intensity, the decisiveness and the speed of these last several weeks and transfer them from the battlefield triage of the bankruptcy process to the day-to-day operation of the new company. This will allow everyone at GM, including me, to return to the business of designing, building and selling great cars and trucks, and serving our customers. And there is nothing we want to do more than that!



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Going forward, I have three priorities for the new GM: customers, cars and culture. I list “customers” first because they are our top priority. For some time now, we haven’t been as focused on this simple point as we should have been. Now, we’re going to be obsessed with it – because if we don’t get this right, we don’t get to do anything else. It’s that simple.

Our second major focus is “cars.” To win, we need to stabilize and grow our business around the globe, and particularly in the U.S. – and that means building more of the cars, trucks and crossovers consumers want. To do that, we’re dropping the word “competitive” from our vocabulary. From here on, every product we make has to be judged by consumers as best in class. Anything less is unacceptable.

And third, we’re working to change the “culture” at GM, with a big focus on customers, speed, accountability and risk taking. We’re changing the structure of the company – flattening the organization, removing layers of management, driving broader spans of control and pushing decision-making authority to those closest to the customer. Business as usual is over at GM, and everyone associated with the company must realize this and be prepared to change… fast.

We’ve been given a rare second chance at GM, and we are very grateful for that. Going forward, our promise is simple: we will be profitable, we will repay our loans as soon as possible and our cars and trucks will be among the best in the world. We know we have to back these promises with results – and we will.

Retrieved from http://fastlane.gmblogs.com/archives/2009/07/the_new_gm_day_one.html

Appendix 4

GM Announces Preliminary Managerial Earnings


On July 10, my management team and I made a commitment to you: GM will rebuild itself by focusing on cars, customers and culture. Today, for the first time since emerging as a new company, we released preliminary managerial financial results. They demonstrate we are on the right track, but still have a long way to go.

We’ve worked hard to set a solid foundation for rebuilding our company. Our progress is evident: market share is stabilizing, our balance sheet is healthier and our cost structure is competitive. In the US, our newest launch products like the Buick LaCrosse, GMC Terrain, Cadillac SRX and Chevy Equinox are generating higher transaction prices and residual values than previous model year vehicles. And we’re seeing the same positive momentum felt globally as GM’s newest products such as the Holden and Chevrolet Cruze, Daewoo Matiz Creative, Opel/Vauxhall Astra and Chevrolet Agile gain market share.

Our entire team is encouraged by these results but we are not and cannot be satisfied. GM is still in a loss position. We know the upcoming fourth quarter will bring additional challenges and cash outlays. Our cash level, however, will allow GM to focus on improving the top line and keep investing in important products and technologies.



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Perhaps the most telling announcement we made today was that GM will begin repaying US and Canadian taxpayers by the end of next month and we will continue paying down both loans on a quarterly basis. We take these loans personally. They represent an enormous obligation to our fellow taxpayers, and we want to pay them back as quickly as you do.

GM is showing solid progress, but we must do better. New challenges are on the horizon and GM will be ready for them. In my eyes, success comes down to keeping our heads down and following our plan to build great vehicles as well as creating stronger relationships with our customers, dealers, employees and so many others. Again, it’s all about cars, customers and culture. I look forward to what the future brings.

Retrieved from http://fastlane.gmblogs.com/archives/2009/11/gm_announces_gms_preliminary_managerial_earnings.html

Appendix 5

Keeping the Conversation Open

By Fritz Henderson President and CEO

Thanks to our FastLane readers for your comments on my post yesterday. I’ve reviewed the comments as they’ve come in and added my thoughts. I haven’t answered them all, but will do my best to keep the information coming.

“Mr. Henderson, After your announcement that Pontiac would be no more, and that there weren’t any more Pontiac G8’s coming from Australia, I put my money where my mouth is and purchased a 2009 Pontiac G8 GT (driving to MI from WI to get the color and options I wanted). I have owned nothing but GM cars for the nearly 30 years I have been driving. The G8 GT represents the best GM vehicle I have ever owned. In just over three weeks of ownership I have 2700 miles on the car – I just can’t stop driving it. What an indictment of old GM that they had a vehicle so fantastic, and they could not find a way to market or sell it/make it a success.

I know you have also stated that the G8 won’t be rebadged as another manufacturer’s car (i.e. a Chevrolet). Might I ask you to reconsider. Find a way to take Holden’s next-generation VE platform vehicle, call it the new Chevy Impala, build it at Oshawa alongside the Camaro, and keep the people like me happy.

No economical RWD sedans = no more new GM purchases for me (sorry, a starting-at-$37K CTS isn’t in my price range new). I recognize the problems the new CAFE regulations will present, but there is still a several year window of time to sell a ton of these vehicles (including police/taxi fleets who will have fewer choices when Ford discontinues the elderly Crown Vic/Grand Marquis/Town Car platform). I know fleet ain’t great, but I think you’d sell a ton of these to regular folks, too (what’s the fleet penetration of the current long-in-the-tooth Impala?). Build these on the Flex line at Oshawa, with a mix of models like Holden does (V6, V8, lux, sport, et. al.) and you’ll have a winner on your hands. The platform is simply too good to ignore, going forward. To do so would be incredibly foolish.” -Robert Hammen

Robert, I appreciate your comment. Certainly, the G8 is going to be one of the Pontiacs we’ll miss. But, we haven’t closed the door on RWD now or in the future. You point out both the Camaro,




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which is definitely in the mainstream price range of today’s cars, and the CTS, which is an amazing value in the luxury sport segment. As we map out our future vehicle needs, if we can find the right opportunity and price point to do a world-class RWD car, you can bet we’ll consider it.

“I never thought that I will become a venture capital for a car company. Well, now that I own 60% of the company, let me see if I can shape the company. For the starter, please make sure to take care of the remaining brands. Since you are no longer a volume company, don’t release any product if you are not 100% proud and satisfied with it. When I drive a GM car, I want to project being a driver who has made a smart choice. I don’t particularly follow all of the Consumer Report recommendations, but I like to see GM cars prominently recommended in this magazine. I would like to see all GM executives, designers and developers drive a competitor car. Ideally, each should have at least one GM car and another car from a competitor. This way, you are all exposed to strengths and weaknesses of the choices that people have in the market. This rule of course should not apply to your relatives and children. They all must drive GM cars! Do not make any promise to any worker for things that is out of your control. You do not know what will happen 20 years from now. So, take care of your workers while they work at GM, but don’t take any commitment for the years after they leave the company. That is the responsibility of the government that has taxing authority. You don’t (maybe you will!) By the way, I would like to get my money back with profits. Therefore, please work hard and smart from now on. Thank you.” -Alex

Alex, I share your passion for taking care of our brands and ensuring that every car and truck GM launches be a winner in the marketplace. We are fully committed to ensuring that all our customers are proud to own our products, and to be associated with General Motors. While we don’t have a policy that our executives and product development team members own a competitors’ vehicle, we participate in competitive drives and clinics to do just you say — better understand their strengths and to learn from what they are doing to win customers. We are fully committed to working fast, working smart and rededicating ourselves to our customers to reinvent GM.

“Mr. Henderson, I have been a loyal GM owner until June 1, 2009. I will no longer purchase a GM car because owners of the 566 million shares of GM stock and the holders of 27B of bonds have been completely written off by you, the CEO and the US Government – e.g. President Obama.

Why would ANYONE invest in the new company? You just zeroed out the existing investors.

Because of this, I will not buy a new Cadillac CTS this year, but I will buy either a Lincoln or luxury transplant car but here in the USA. -JE”

We recognize our actions have a significant impact on many constituents, including stockholders, bondholders, employees, dealers, retirees and others. Bondholders will receive ownership in the new GM. We are committed to turning around the company to the benefit of all stakeholders in General Motors, and we plan to do that as quickly as possible.

“Mr Henderson, am I correct in hearing within this quote, “New GM will be rededicated to our customers,” that GM will no longer exist to serve the shareholders, as in the past? You have emphasized this principle all day today, so it seems you’re serious.” -Mitch Weaver

Mitch, thanks for your comment. I actually do not see those as two different things at all. In fact, the very best way to be responsible to our investors and other stakeholders is to ensure that this company is successful in the long term, and as a part of that, we need to dedicate ourselves to satisfying our customers.


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“Mr. Fritz, The issue is your company is selling snake oil. Why should we now believe your new found, ‘Today marks the beginning of what will be a New GM dedicated to building on only the very best of our recent progress in fuel efficiency, world-class quality, green technology development and outstanding design?’ Why should we believe your, “We don’t do that by working in a bubble. We do it by engaging with you, our customers and critics, our partners and champions, who are interested in our progress.” Your company has proven time after time that it does not care. Your designs are not fresh, simply redone. Your technologically is lacking. Your new small car? I’m thinking Vega, Corvare, and Azteck. All pushed and spun as great new innovative quality driven responses to customer wants and desires. All monumental failures an half hearted attempts to compete in segments you really did not want to be in or understand. as for transparency, yep I can clearly see by your new commercial, you think telling us this is for the better and should be seen as an opportunity, only proves you do not understand. At least admit you screwed up big. At least give us a glimpse of how you will pay ME the American working Joe, Back. Me the $12.00/hr worker that made your failed company by buying your product. Yes there should be some serious sacrificial blood letting at the very top and in your board room. No not just the past president resigning, wow he left, and how many millions did he take with him? We know the $1.00/year salary is spin for TV. You boys make your real money in many other tax sheltered ways than your annual salary. I think it only fair that at least a few of your top people not only be replaced, but sent packing with no golden parachute made possible by my tax money in the form of a bailout, but instead publicly sent packing, no retirement, no ongoing medical, just flat let go like the thousands of hourly workers whose lives you have ruined.

An old nursery rhyme has a line that reads “A man of words and not of dreads, is like a garden full of weeds”. Potential but nothing to show for it. I will not believe or support your company until you show some regret for what you have done, and real innovation with designs people actually like, and product that works. Every time, no recalls, no “buy the second or third year after they get the bugs worked out, none of it. You blew it, say so, prove that you will and have changed and then, maybe just than, I can believe my $12.00/hr tax bailout for you was worth my families sacrifice.” -John Shultz

John, I can understand your skepticism. As I said in the press conference, the GM that many of you knew, the GM that let too many of you down, is history. I don’t expect you to believe that from watching one press conference — but I ask that you watch what we do, over the next weeks and months, before you write us off.

As for product, I don’t think you need to look any further that Cadillac CTS (Motor Trend Car of the Year), Chevrolet Malibu (North American Car of the Year), Opel Insignia (European Car of the Year) or Buick Enclave, Chevrolet Traverse, Camaro and Corvette or our class leading pickup trucks and sport utility vehicles to see that we can and do design, engineer and build great cars, trucks and crossovers.

“Thank you for the promise of transparency. It is my sincere hope that you adhere to that promise. Now, a couple of questions/comments/concerns:

Q1- Will the ‘new’ GM be able to resist following the same path that the ‘old’ GM went down regarding (rather ludicrous) measures such as job banks? I totally believe in unions, but I also believe that there should be prudence and logic baked into business (note: business) decisions. Having a cost base that is skewed in a manner that will be a business case study in universities is neither prudent nor logical. I know the new GM will not be saddled by this, but how long will it take before the new GM decides to go down the same path?

Q2- On Ford …it is the only American vehicle manufacturer that has not sued for bankruptcy, and that is simply due to it being wise (or most probably just lucky) to take out a bunch of loans when credit


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was not an issue. It was a big gambit, and it worked for them. Under normal conditions, that cash would enable them to make it through the crisis, and with the travails of Chrysler and GM even manage to garner a good dollop of market (and revenue) share. However, these are not normal conditions, particularly due to the assistance that GM has received from the Government. I am not complaining (even though I am a Fund Manager, I do not own stock in any of the major car companies) …it is just that it inherently seems unfair to Ford, which by my estimations will probably be facing bankruptcy once the funds run out.

Q3- Looking at the stratification of trucks to cars since the 1970s, GM had a major dip in the numbers of cars made in comparison to trucks (particularly from the 90s forward). I’ve read many comments on how the new GM will be leaner and meaner, but how exactly is this supposed to be crystallized? It is easy to paint a nice neat picture, but another thing entirely to bring that picture to life.

Q4- As mentioned, I am a Fund Manager. My projections months ago showed that there was NO WAY (as in, no way without resorting to fuzzy math) that GM could avoid bankruptcy. Yet, the Government went ahead and gave billions to the firm. Now, if I (without complete access to the financial innards) was able to still come up with metrics that showed it was impossible (at that point) for any financial assistance (short of massive liquidity – more massive than what was provided – supported by a market that was much firmer than was projected to be the case for at least a year under the most optimistic scenario), then why did GM go ahead and get the loans? Would it not have been better to sue for bankruptcy then, and at the very least save the tax payer many billions.

Anyways, those are my only questions. I hope you post them on the blog (although I will not hold my breath) as per your promise of transparency, and I hope you answer them. They are not tough questions (I could have made them much tougher), and I think they are fair and honest questions.

In closing, I hope the best for the company. I’ve driven some of the newer cars from GM, and contrary to the negative talk from some sections of the market, those cars were actually VERY good. I own a German luxury automobile, and I can honestly say that the GM cars I looked at give it a run for its money, and in some areas even surpass it. Thus, the CURRENT problem was never the product (although in the 80s it seems like it was the genesis of many a problem).

I wish you, your workers, and the expanded GM community, the best.” -Anthony Njoroge

Anthony – Thanks for your perspective and glad to hear that GM’s current products are exceeding your expectations. Design is once again playing a lead role at our company, and cars like the Chevy Malibu, Buick LaCrosse and Cadillac CTS showcase that. As for your questions, I can’t address your comments on Ford (I have my hands full running GM), but I can tell you that a GM bankruptcy last fall would not have worked. One of the things that we need to have any chance of successfully emerging from bankruptcy is financing, and that just wasn’t available last fall. The 363 tool we’re using, along with the support of the U.S. Treasury, not only provides the DIP financing we need to go through the bankruptcy process, but it also provides additional financing we need to make the New GM successful. And as far as GM’s future product mix, we will be heavily weighted toward fuel-efficient cars and crossovers, like the upcoming Chevy Equinox and GMC Terrain (midsize crossovers with class-leading 32 mpg highway); our Chevy Cruze global compact car (expected to get close to 40 mpg highway); and of course the Chevy Volt extended-range electric car. Beyond that, we expect to have 14 hybrid models in production by 2012, and 65 percent of vehicles will be alternative-fuel capable by 2014. GM has never missed a federal fuel economy standard, and we are not planning to do it now.

Retrieved from http://fastlane.gmblogs.com/archives/2009/06/keeping_the_conversation_open.html

http://fastlane.gmblogs.com/archives/2009/06/keeping_the_conversation_open.html

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