Then GM CEO Fritz Henderson announces the Chevrolet Volt, the electric car designed to put oil companies out of business.
Sunoco, Inc. has announced that Frederick A. “Fritz” Henderson has joined the company as a senior vice president to help prepare for a previously announced separation of SunCoke Energy from parent Sunoco.
Coke is a key ingredient in steel, of course, a material that auto companies are large purchasers of during their often contentious relationships with suppliers.
Sunoco said last June that it would separate SunCoke Energy from itself as part of a well-worn Wall Street strategy “designed to unlock shareholder value.” This type of financial engineering ploy clearly didn’t work in the now notorious auto industry captive component maker spinoffs – GM’s Delphi and Ford Motor’s Visteon. Both transactions ultimately resulted in bankruptcies and costly shareholder losses.
SunCoke facilities in the U.S. have the capacity to manufacture approximately 3.67 million tons of metallurgical coke annually – roughly 25% of domestic production. Sunoco also has an equity interest in a 1.7 million tons-per-year coke-making facility in Vitoria, Brazil.
Markets permitting, Sunoco plans to spinoff the coke unit during the first half of 2011, subject to the usual regulatory and other unstated conditions. Sunoco said in a statement that it is currently reviewing a variety of potential separation transactions. Speculation has it that Sunoco is looking at a way where stock in the new entity would change hands tax free.
The U.S. tax code is rife with Congressional exemptions in “pay to play” Washington, so much so that most international corporations pay very low rates of taxation when compared with the much higher rates most workers face.
Mr. Henderson, 52, former president and chief executive officer of General Motors, will become chairman and chief executive officer of SunCoke Energy upon completion of the separation. There is an ongoing debate in business schools about the decidedly mixed record of high priced executives switching industries. And it remains to be seen if a former GM executive can help or hurt the prospects of the energy company offering. (See Henderson Out at General Motors)
Henderson was a GM lifer and part of what government regulators – most notably former Treasury appointee Steven Rattner – thought an abysmally deficient finance staff. Henderson was fired after a brief eight-month tenure after he was named CEO of GM in March 2009, as the Obama Administration’s Auto Task Force was forcing the moribund and debt ridden automaker into a Chapter 11 receivership where taxpayers ultimately became majority shareholders at a $50 billion plus cost. President Obama insisted that then Chairman and CEO Rick Wagoner be fired for incompetence as part of the controversial and still politically unpopular deal. Wagoner, too, was a GM lifer of finance staff background, training and in the Fed’s view non-urgent disposition.
In a speech afterwards about the Chrysler and GM bailouts Rattner said: “At GM, we faced a bigger management challenge than even its reputation led us to expect. Take, for example, the lack of financial discipline. We saw no indication of the finance staff pushing back on the operating divisions to achieve better results, as is customary. Analyses seemed engineered to support pre-ordained conclusions. Symbolically, we never heard the words shareholder value.” (See Ex Auto Czar Rattner Pulls No Punches in “Overhaul” ; and a more detailed Reflections on Our Auto Restructurings )
Since then GM in ongoing management turmoil has had two other CEOs, including outsider Ed Whitacre, who abruptly resigned just as GM was announcing an initial stock offering, which will probably occur late this fall after an election where voters will likely punish incumbents. Whitacre was replaced by the Obama Administration with Dan Ackerson, a government dictated GM board appointee in July of 2009, also with a finance and Wall Street background, who joined the GM Board as it emerged from bankruptcy. (See GM CEO Whitacre Steps Down in September!)
“I am very pleased that a leader of Fritz’s caliber will be joining Sunoco to lead SunCoke Energy,” said Lynn L. Elsenhans, Sunoco’s chairman and chief executive officer.
“His broad global experience managing businesses in many of the world’s major markets will be invaluable,” Elsenhans concluded.
Michael J. Thomson, president of SunCoke since 2008, will assume the additional role of chief operating officer upon completion of SunCoke’s separation from Sunoco.
Henderson held a variety of management positions during his 25 years at General Motors. He joined the Company in 1984 and became group vice president of finance for GMAC in 1991. Mr. Henderson later worked within GM’s global component operations before being appointed GM vice president and managing director of GM do Brasil in 1997. In 2000, he was appointed group vice president and president of GM-LAAM (Latin America, Africa and Middle East) before becoming president of GM Asia Pacific in 2002 where he was successful in expanding operations in the booming Korean and Chinese markets through acquisitions and joint ventures. In 2004, Mr. Henderson was appointed chairman of GM Europe, still a huge liability for GM’s results. He then became GM’s vice chairman and chief financial officer in 2006, then president and chief operating officer before being appointed president and chief executive officer in 2009.