Landing GM

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Earlier this year, Kent Kresa was busy doing what he has done since retiring as chief executive of Northrop Grumman Co. in 2002 serving on corporate boards, pursuing charitable work and traveling around the globe with his wife of 48 years. Then the phone call came: GM Chief Executive and Chairman Rick Wagoner was out. Would he be interim chairman as the company struggled to turn itself around? It was a request that Kresa as a GM board member felt he couldn’t turn down. What followed were months of long days and nights that ended in July, when GM emerged from bankruptcy with a new permanent chairman. Kresa’s tenure as interim chairman thrust him back into the spotlight after a long business career that few could have foreseen for him as a child. He is the son of Irving Berlin collaborator Helmy Kresa and grew up performing musical theater in New York. But when he was a teenager, Kresa chose not pursue a career in theater and instead turned his sights to aeronautical engineering. He got three degrees from MIT and after a stint working for the government joined Northrop in 1975 as a research and technology vice president. He worked his way up to become chief executive and turned the aerospace and defense technology company into a $16 billion giant. Kresa sat down with the Business Journal in his Beverly Hills office, decorated with model airplanes, aircraft carriers and sail boats, to talk about his time as a child actor, his long career and chairing his last GM board meeting while on safari in Africa.



Question: What was it like to lead GM through this massive bankruptcy? Did you get any sleep?

Answer: It was continuous. Sure, I got sleep. But I was on the phone all the time because I was in contact with the team on a daily basis, or probably on a half-a-day basis. But the team I’m talking about Fritz Henderson and the team of specialists, the CFO, the outside legal counsel who was dealing with the bankruptcy, some of our financial people and obviously the government did all the heavy lifting. It was a real team effort as we went through the process; it was really managed by Fritz Henderson.


Q: One of your responsibilities was to find a permanent chairman for GM. What was that like?

A: I worked with the government and one of the consulting firms, Spencer Stewart, and they came up with a lot of names. Ed Whitacre was on that first list, and the government was very high on him as well. He seemed like a very good guy I knew of him, but I didn’t know him. But I had other contacts who knew him quite well, so I could get good references immediately.


Q: How did you learn that the government wanted you to serve as interim chairman? Did you get to meet President Obama?

A: I found out the day the then-chairman, Rick Wagoner, was advised that the government wanted him to step down. I talked to the government, and they said that’s what they wanted, and so that’s what I did. It was a very traumatic period for the company, so it really wasn’t something you could turn down. I did not meet President Obama. I talked to the car czar (Steve Rattner), the secretary of the treasury (Timothy Geithner) and Larry Summers. Then I had most of my dealings with the car czar.


Q: How would you compare your time as interim chairman of GM to your time as chief executive of Northrop?

A: Both companies had a crisis that they were faced with, but they were different kinds of crisis. Northrop faced the end of the Cold War and a new environment for defense, which changed the business model. For GM, it’s the fundamental structure of the company the way it has become over the last 100 years versus what it needs to become to be successful in the marketplace. And with the traumatic event of the market collapsing, you had no time to do anything at GM.


Q: Now, the biggest challenge is how to get people to buy GM cars.

A: The most important thing is to have exciting products that are priced right so that people can afford them and they have all the excitement people want in a vehicle. A personal vehicle is very important to everybody’s being in today’s world, and the U.S. car market sort of lost its way for a whole bunch of reasons. But now it’s a question of whether it can regain that. And the American car industry has the technology to be a leader, so I think we can come back.


Q: Do you drive any GM cars?

A: Right now in my household I have a couple of GM cars. One is the Saturn Sky, it’s a little convertible, and the other is a Cadillac CTS. My favorite GM car is probably the Corvette. I have never owned a Corvette, but I have driven them extensively.


Q: You also serve on the boards of several other corporate boards, including Avery Dennison Corp. What’s your typical day like?

A: No day is typical. Once you are involved in many different things, you are no longer in control of your own agenda. It’s in the control of whatever meetings or boards or whatever else is going on. Typically, a meeting for a particular company or activity is once a month or once every two months. So it probably takes more time to get ready for a meeting because, unlike when I was the CEO of Northrop and I sort of knew everything that went on except for the last 15 minutes, now I haven’t touched some activity for the last month or the last two weeks. I have a lot of catching up to do. It keeps me very active.


Q: Do you ever think about retiring completely?

A: Retirement is a relative statement. I look at it as an opportunity to do different things that I think are important. For example, I love to mentor. When I get involved on boards, it’s to try and help the company and use my experience that I have over the 50 years of work.


Q: Does your wife want you to retire?

A: Yes. Well, I don’t really know that. Every now and then there are problems fitting in a nice trip we want to do because some meeting gets right in the middle of it. But in today’s world, with BlackBerrys, e-mails, faxes and FedEx, you can virtually be anywhere in the world and conduct business.


Q: Like where?

A: I was in Africa last month conducting the last GM board meeting because I happened to be on a trip when we had the meeting. The world is wired and my BlackBerry worked fine. I got all the material I needed for the meeting, I had a computer and I was on the phone.


Q: Where were you in Africa?

A: At the moment, I was in Zanzibar. But I also went to Kenya, Tanzania and Botswana.




Q: What did you do there?

A: We went on safaris in Botswana and Kenya. We were out camping, but I wouldn’t call it roughing it. Even though you are out in the middle of nowhere, the Third World is totally wireless, so you can use your BlackBerry everywhere.


Q: Are you a world traveler?

A: I try to be. I want to see everything I can.




Q: Tell me about your childhood growing up in New York.

A: My father was the general manager of Irving Berlin Music Co. and worked with him, and as a result my family was quite involved in musical theater and comedy.



Q: How did your father become the general manager of Irving Berlin Co.?

A: He was Irving Berlin’s musical arranger for many years. And over time, he became involved more with the business side and then became the general manager.


Q: Did you get to meet him?

A: I met him several times, yes.


Q: I understand you were a child actor?

A: I was in the musical comedy business until I finished high school. I did some television, including one show called “The Children’s Hour,” and I did a lot of commercials. But at the end of high school, I thought this isn’t for me because I couldn’t take a lot of rejection.


Q: You couldn’t take the rejection?

A: The majority of calls you go on the answer is no you’ve got the wrong hair color, you’re too old or you’re too young. I thought this is a hit-or-miss game, everybody has this great vision to be a star, but the majority of the people in the business are not stars. Early on, it made me realize that I wanted to do something more stable and what I liked to do. I was interested in airplanes all my life, as a kid. So becoming an aeronautical engineer seemed like the right thing to do.


Q: I take it you enjoyed math and science.

A: I was good at math and science, so it was the logical thing to do. I went to MIT for my undergrad, master’s and engineering degrees. It worked out that way because when I finished my bachelor’s degree, I went to work at a company near MIT that supported me to my next degree.


Q: How did it feel the day you got into MIT?

A: It was exciting; it was great to get into MIT. I was accepted into some other schools as well, but MIT was my first choice.




Q: Before you joined Northrop, you worked for the federal government’s Defense Advanced Research Projects Agency. What did you do there?

A: I worked on ballistic missile defense and then got involved in undersea warfare, satellites and stealth technology.


Q: Did you get to work on the Advanced Research Projects Agency Network, the system that became the precursor to the Internet?

A: No, I didn’t work on the project that became the Internet. (But) we were original users of Arpanet for communications. I can remember going on trips and carrying this huge interface with the telephone to be able to send and receive messages back and forth.


Q: When did you move to Los Angeles and begin working for Northrop?

A: I came to work for Northrop after I worked in the government for seven years. I came here to run their air and research activity, and I did that for a year and then I got promoted to run the division. I kept on getting promoted and became president and then CEO.




Q: What was the most difficult period for you at Northrop?

A: When the acquisition of Northrop by Lockheed was disallowed by the U.S. government, I was very disappointed. It was a difficult time for the company, and I had to make a decision: Should I retire and bring in someone else to do what they needed to do to bring the company to a new place? But I decided that I was going to stay. And in doing that, I did all the acquisitions and grew the company into what we became.


Q: What’s the most significant decision in your career?

A: When I elected to retire from Northrop. I was very comfortable where I was, and the board was not necessarily anxious for me to leave. I had sort of believed that it was important to have transition in a company, but when you get to retirement, you wonder if you really want to do it.


Q: How did you resolve it?

A: I looked at it in a way and said, ‘If I were to go five or 10 years from that day, would I remember the year after I retired as the first year of my next career as opposed to my13th year as CEO?’ I came to the conclusion that I probably wouldn’t remember the 13th year because it would be like the 12th. But the first year of retirement would probably be very different, and it turned out to be exciting.




Q: How so?

A: It was all new things to do. I got involved with various other companies on their boards. I got involved in foundations and put more energy into my charitable work. There were lots of things to do, and they were very different. It was a stimulating thing because I had to figure out how I was going to deal with all of these things and get into a new pattern of working.


Q: What do you like to do for fun? I’ve heard that you’re a runner.

A: I don’t run anymore, I’m a walker now. I used to Rollerblade, but I can’t anymore because my daughter, who is a neurologist, told me if I fall down, I can do a lot more damage to myself at my age. I love sailing and I swim a bit, not a lot. And I go to the theater.


Q: Your daughter is a neurologist? You must be proud.

A: I am proud. I’m the president of her fan club. She practices with her husband in Charleston, West Virginia. She is very involved with motor diseases, so she gives a lot of lectures and does a lot of things on that. It’s fun to be able to go on the Internet, and when I go to Google it isn’t just my name that comes up.


Q: How did you meet your wife?

A: We were high school sweethearts. We started dating when we were 16, and have been together ever since. We’ve been married for 48 years; it will be 49 this year.



Q: What’s the secret to such a long relationship?

A: I think understanding each other, letting each person develop the way they need to be happy and being mutually supportive. My wife is as busy as I am. Right now, she’s the president of the Library Foundation of Los Angeles. Prior to that, she was president of the Blue Ribbon Foundation. She’s involved in a lot of charities.


Q: What’s the best advice you’ve received?

A: To recognize that in any senior job you have, you are a resident in that job. It’s a mantle around you. It’s not you as a person. And some day you will leave that position, but you are going to be the same person. So make sure you don’t confuse the job with yourself. You just don’t believe that all of the accoutrements and things that are associated with your job are you; you are still the same person that takes the garbage out. I worked very hard to try and not have that problem.


Kent Kresa

Title: Board member

Organization: General Motors Co.

Born: 1938; New York

Education: Bachelor’s, master’s and engineering degrees in aeronautics and

astronautics, all from Massachusetts Institute of Technology

Career Turning Point: When the U.S. government barred the acquisition of Northrop by Lockheed. “I had to make the decision of whether I should retire or stay. I stayed, and did all the acquisitions and

growing to turn the company into what we became.”

Most Influential People: Father, Helmy Kresa, a songwriter who worked with famed composer Irving Berlin

Personal: Lives in Beverly Hills with wife, Joyce; one adult daughter, a neurologist who lives in West Virginia

Hobbies: Walking, sailing, swimming

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