Far too late to matter for GM’s viability, CEO Rick Wagoner Said to Step Down.
General Motors Corp. Chief Executive Officer Rick Wagoner will step down after more than eight years running the largest U.S. automaker, people familiar with the situation said.
The Obama administration asked Wagoner, 56, to leave the company and he agreed, an administration official said. Wagoner said March 19 that he didn’t plan to resign. The likely replacement, unless the government hires from outside the company, would be Chief Operating Officer Fritz Henderson, said John Casesa, managing partner at New York-based consulting firm Casesa Shapiro Group.
“If they go to someone inside, Fritz is the obvious choice,” Casesa said. “He’s run every region, he’s been number two and he knows where all the bodies are buried.”
The departure of Wagoner comes as President Barack Obama prepares an address tomorrow morning on his plans for the future of the U.S. auto industry. GM is surviving on $13.4 billion in U.S. loans and is asking for as much as $16.6 billion in additional aid to survive. Wagoner was asked to step down as part of the company’s restructuring, the official said.
“It’s very hard for the government to write a big check without giving some evidence of change,” Casesa said. “This will also give the government moral authority with the other stakeholders to make them sacrifice.”
Wagoner has repeatedly argued he knows the company better than most who could take his job. He joined GM in 1977, as U.S. automakers were fending off Japanese competitors who recognized the need a decade earlier to build fuel-efficient vehicles.
As CEO, the former Duke University freshman basketball player and Harvard University MBA early on bet against gasoline-electric hybrid vehicles, focusing research on hydrogen technology. GM offered its first full-scale hybrids in 2007, a decade after Toyota introduced the Prius.
Wagoner kept GM focused on trucks and sport-utility vehicles, only to press for development of the Volt plug-in electric car when gasoline prices soared.
Wagoner a Visionless Dinosaur
Wagoner is an aging dinosaur with no vision. He made bad bets on the wrong technology. He bet on Hummer, an ugly gas-guzzling behemoth right as gas prices were poised to soar. He failed to sell Hummer and all of GMAC when he easily could have unloaded them for good prices. He backed hydrogen technology rather than hybrids. He clung to too many brands.
Ironically Wagoner argues he knows the company better than most who could take his job. Unfortunately, someone who knew nothing about the company or the industry would likely have done a far better job.
Incompetence is often richly rewarded. Please consider GM CEO Rick Wagner’s 2007 compensation.
General Motors Corp. Chairman and CEO Rick Wagoner’s compensation package for last year is valued at $15.7 million.
That’s 64 percent more than 2006 when the package was worth $9.57 million.
On the assumption he made a mere $5 million a year before that, Wagoner made over $50 million during his tenure of running GM into the ground.
61% Oppose More Auto Loans
According to US News and World Report Obama Auto Task Force Working Against Deadline, Public Anger.
The Wall Street Journal explains, “Industry observers have been anticipating March 31 as a sort of D-Day for the industry, with the government releasing its findings on GM and Chrysler, including whether the companies should receive more aid or be pushed into bankruptcy court.” However, “A task force member, briefing reporters on condition of anonymity this week because he wasn’t authorized to speak on the record, attempted to tamp down the expectation of a wholesale, one-shot bailout, instead suggesting a longer, more drawn-out process.”
The task force also faces an enormous political hurdle – public opinion. In a separate story, the Detroit Free Press reports, “More than three in five Americans — 61% — oppose more government loans to General Motors Corp. and Chrysler LLC, according to a R.L. Polk survey released Monday that is consistent with other recent opinion research.” Further aid isn’t even popular in areas heavily dependent on auto industry jobs
Public opinion aside, smart money is betting Obama will throw more money down the auto bailout sinkhole.
Mike “Mish” Shedlock
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