Outsiders Take Big 3's Keys

Fixing the Detroit Three, it appears, requires reaching outside the auto industry for leadership.

To an extent, that is one more sign of the industry's massive breakdown. "It represents a failure of their leadership pipeline," says Noel Tichy, a professor at the University of Michigan Ross School of Business. "The number two job of a CEO is to have good succession in place."

Mullaly Gets It Right at Ford Nardelli a Victim of Economic Forces

Yet at Ford(F Quote), looking outside forged a transformation led by Alan Mullaly, who arrived as CEO in 2006 after 37 years at Boeing(BA Quote).

Now, hopes are high for Ed Whitacre, a 43-year veteran of the telecommunications industry and retired CEO of AT&T(T Quote), who will take over as chairman of General Motors(GMGMQ Quote) when the automaker emerges from bankruptcy.

Whitacre has acknowledged that he doesn't know the auto industry, but that isn't necessarily a drawback, says industry analyst James Harbour, founder of the Harbour Report and recently author of the autobiography Factory Man. "He has to set a long-term business plan, set goals and objectives, (not) run the company," Harbour says. "He will fit like a glove."

Whitacre adds value because he has already presided over a company that, like GM, was confronting massive transformation, says Hugh O'Neil, a professor at the University of North Carolina Kenan-Flagler Business School, who studies corporate turnarounds.

In general, going outside a troubled industry for leadership is beneficial, O'Neil says. Once a company has reached the point that it requires a turnaround, "you should have an outsider to manage the process," O'Neil says.