![\"Analysts say it\'s hard to fault CEO Rick Wagoner.\" (pic and cap courtesy detnews.com)](https://www.thetruthaboutcars.com/wp-content/uploads/2008/08/rick.jpg "\\"Analysts say it\'s hard to fault CEO Rick Wagoner.\\" (pic and cap courtesy detnews.com)")
So, what does GM CEO Rick Wagoner have on the 13 other members of the automaker's Bored of Directors? Whatever it is, it must be both criminal AND depraved. How else can you explain the fact that George Fisher (the lead independent BOD member) and his cronies have thrown their support behind The General's top general? Under Wagoner's watch, GM's shed over 10 percent of its U.S. market share, sold everything that wasn't nailed down, flushed its share price down the proverbial toilet, slid into negative market capitalization (if you think about it) and screwed-up its branding beyond repair. That should be enough to get a dictator fired, never mind an executive of a publicly held company. And that doesn't include the fact that Wagoner has banked over $100m personally and NEVER announced hard targets for his "turnaround" plan. His equally nebulous plan from here on out is also grounds for dismissal. Oh well. It looks like GM will file for much-needed and now inevitable Chapter 11 protections over Wagoner's dead body. Perhaps it will go straight to Chapter 7, as and when. Meanwhile, the chances of a GM shareholder revolt grow by the day. And the lawsuit won't be far behind. This is going to get ugly. And if you really want to get your blood boiling, check the caption this photo or click on over to The Detroit News, whose wishy-washy, pom-pom threatening report could well be The Mother of All Apologias.
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I think they didn’t defied TTAC… but just plain common sense.
And all the “common sensed” predictions.
Even AE thinks this guy has to go.
I do too. I don’t want to see GM go broke.
I was remembering when Pan-Am went bust many years ago. Nobody thought something like that could happen.
Nobody will believe when, sadly, GM busts.
You have to praise his corporate manipulation abilities. He has run a major corporation into the ground while greatly enriching himself, plus he surrounded himself with sycophants who sing his praises and allow him to continue his rampage. It’s really quite impressive. Corporations breed executives who are adept in manipulating the business culture and enriching themselves while actually destroying the business that makes that possible. They are like fatal viruses.
“Analysts say it’s hard to fault CEO Rick Wagoner.”
Right, and I have a nice bridge to sell you…
i think the main problem for the board is they don’t have a replacement ready.
They can’t get rid of wagoner till there is someone willing to take up this mess. and how many ppl are ready for this?
It didn’t say who these “analysts” were. They are probably the analysts who have a stake in Toyota/Honda/Nissan.
My favourite tidbit:
“He is respected for his perseverance and courage and his vision,” Meyers (University of Michigan professor and former chairman of American Motors Corp.) said of Wagoner”
He’s lucky he’s not running GM from China they would have drug him out back of HQ and put a bullet in his head by now, or allowed a public stoning.
How can one person be allowed to destroy so many innocent peoples lives while enriching himself. It seams criminal at this point to even let this guy come to work let alone run the whole show. I’m surprised no crazy GM diehard has tried to wack this guy by now.
Here is a question for all the Best and Brightest: When GM is dead and gone and the truth starts to come out can Red Ink Rick be held criminally responsible or does he just get to fly away with his millions? He hasn’t exactly helped our economy with his actions and the aftermath wont be something you can sweep under the rug.
I think he would make a great cell mate for Skilling, they would have a lot to talk about.
rag21
If the BOD felt that strongly about it then one of them would take the job (like Sergio Marchionne did with FIAT).
I can only conclude one of 3 things:
1. The BOD WANT GM to file or go bust.
2. Rick Wagoner DOES have a plan but is keeping his cards close to his chest.
3. Both Rick Wagoner and the BOD are raking in so much money, that once GM goes to the wall, neither of them will care as they will be flush with cash.
rag21 Fritz is standing in the sidelines ready to continue Rick’s legacy, no need to search for someone to continue this mess.
Gm DW 191
He’s the devil they KNOW. And they can browbeat him on a salary. Anyone else, who is really good, has a job. And will command a huge salary to jump in at this juncture.
Besides, who really has to steer a rudderless vessel into CH11?
They are not going to criticize him because he is one of them. Rick is a product of the GM culture. If they say he’s incompetent or doesn’t know what he’s doing, that means they’re all incompetent and none of them know what they’re doing.(hmmmm….)
The level of group think coming out of the RenCen is staggering. They will never admit to mistakes or throw one of their own overboard, unless there is personal profit to be made.
Everyone knows what they did wrong and what they should do, except for the people in charge. It all comes down to narcississm, they absolutely refuse to face reality, because it flies in the face of the fantasy they have created for themselves…..
Probably a combination of all of the above…
1) The level is insularity and cluelessness of these people is actually beyond the ability of most of us mortals to comprehend. You have to have consumed so much of the corporate kool-aid to get to that level that you honestly can’t tell reality from your own constructed fiction any more.
2) Gross incompetence might get you a talking-to by Congress, but it won’t get you locked up. If that was the case most of American business and all of the US Federal, state, and local governments would be behind bars. Check out that Mozillo guy from Countrywide Mortgage as an example.
3) Now fraud WILL get you locked up. And if the BOD has been complicit with Wagoner in manipulating information, etc, they would do well to keep him close by until…
4) The massive government bail-out that these guys are absolutely, 110% sure is coming, once they iron out the terms with their Congressional cronies over a few rounds of golf and expensive dinners.
Incredible – he really does know where the skeletons are.
The alternative is that it’s part of a cunning plan to fool the opposition – that GM does have a plan but it’s so secret that only the very top people know about it and it’s been implemented so stealthly that no-one in GM is aware of it (otherwise there would have been some leaks). And one day (in 2010 perhaps?), GM will roar back to it’s rightful place with a fantastic product range exactly right for the market at that time.
Rick is now the fall guy and may be around for awhile yet.
If they go bankrupt, it’s his fault.
If they start to recover (like during that magical year of 2010), he will replaced and the new CEO will take credit for all the good things that are happening.
So, what does GM CEO Rick Wagoner have on the 13 other members of the automaker’s Bored of Directors?
Who was it that Ashley Alexander Dupre worked for again?
Seriously though, I have known one person, a high powered corporate lawyer, who sat on the boards of a variety of large conglomerates. I’ve seen them in action. To put it lightly, they make a soccer riot look like an old boys club. Their priorities were scotch, golf, scotch, salacious discussions about their wives and female employees, and scotch. Expecting change out of this crew is about as realistic as expecting Lindsay Lohan to enlist.
Robert – Not to quibble, but I think GM actually shed nearly a third of their market share by losing 10% of the 30% (plus or minus) held when Rick took over.
Granted that the momentum was already there, but out of Rick’s tenure, GM invested billions to bring new trucks to a market which was already saturated (else why would they be putting cash on the hood seven years ago?). If the guy actually cared about what he did, he would have resigned; and for 15 million a year, he’s paid to care.
I can already see it in “Automotive News”..
“We almost lost Rick, again”
irony abounds.
retarded sparks, Farago, and a guy called Delorenzo have all spoken. For those of us taxpayers who don’t want to see the American icons go bust, they may get their wish and be participants in the bailout.
Delorenzo says 40 billion would be the minimum needed from uncle Sam to keep the big three going for three more years. He also feels it would be a disaster to have these historical artifacts depart the scene as we will then be dictated to by foreigners who won’t build what we want.
Hello? I can’t follow this logic since GM doesn’t build what I want to buy and they are still American controlled.
Well to Delorenzo you are right the big three cannot make it on their own period. As to foreigners dictating to us, get ready for that in all sectors of our economy. From the Chrysler building in NYC to main St USA we will have to let the deficit spending spree we were on the last 20 years come back in the form of foreign investment and control.
Maybe Abu-Dabi could buy Congress, could it really change for the worse?
rag21 wrote:
i think the main problem for the board is they don’t have a replacement ready. They can’t get rid of wagoner till there is someone willing to take up this mess. and how many ppl are ready for this?
I will, for 10% of his salary.
It amazes me that instead of exporting our lawyers and MBAs as the ultimate wunderwaffe against our enemies we bother to conduct our wars with conventional weapons.
George Fisher made a colossal mess at both Motorola and Kodak, so it is no surprise he is doing the same for and with GM.
Read the article this gem comes from, circa 1997:
“Problem is, Fisher still seems to have been taken by surprise by the depth of the company’s problems. The issues that have dogged it–confused marketing, a bloated cost structure, intensifying competition from Fuji Photo Film Co., a strong dollar–have either been around for a while or could have been anticipated.”
http://www.businessweek.com/1997/42/b3549001.htm
I almost laughed when I read this – no one, not even GM’s board of directors is this stupid.
The plan is, and always has been, to push GM-North America into bankruptcy. This solves a bunch of problems for GM:
Unions – Wagoner and the board will tell them to get stuffed.
Dealers – same fate as the unions. Maybe 1/3rd of them will survive GM’s chapter 11.
Brands – 2 or 3 brands might survive this.
All they need to do is convince a bankruptcy court judge that this plan will “fix” GM.
-ted
Sadly, General Motors is only a small snapshot of what is our 21st century America. Assessing the business climate, executive decisions, backwards thinking, greed based decisions found all so frequently in America-most of all government included! The General is merely a mirror of what we as America are today.
Rick Wagoner is the best thing that ever happened to TTAC. The fact that he’s still around isn’t suprising at all given that even George Bush got elected for a 2nd term.
It’s August 6th and Chrysler STILL hasn’t declared bankruptcy yet, what gives ?.
I think the hail mary is going to be C11 so they can restart the clock with the labor unions. There is no other explanation for their actions.
If RW is ever replaced and if GM survives they need to have RW’s eventual replacement simpley be the CEO only and not a member of the board of directors. Having the CEO also on the board as chairman results in this incestous non accountability where the management of the company directs the board instead of the board directing management.
BTW zerofoot bankruptcy while it will negate many obligations of GM including some UAW contracts will not cause the UAW to disapear and their obligations will still exist in some format to be determined by a bamkruptcy judge
Prediction
Its an election year GM will get a bailout
it will be huge
it won’t matter and it will only delay the inevitable
The problem for the Board of Directors is that if Wagoner is incompetent to run GM now, then why wasn’t he incompetent three years ago when GM still had the resources to turn things around? There was really no excuse for him to survive the 2005 Fiat debacle.
Now that the cupboard is bare, firing Wagoner would only be an admission that the BOD have all been sleeping at the wheel for years, and nothing positive will come out of a change in CEOs at this late date anyway. GM is like an airliner whose engines have all flamed out — the destination is certain. Might as well let Rick finish the journey.
Its too bad that Wagoner and the entire Board of Directors can’t be prosecuted together.
Redbarchetta :
He’s lucky he’s not running GM from China they would have drug him out back of HQ and put a bullet in his head by now, or allowed a public stoning.
I often take the path less travelled in my thinking and personal analysis of issues of the day. As a result, not a lot of things surprise or shock me.
So, the thought has indeed occurred to me that people (not necessarily the government) would consider violence.
The damage done (by so many incompetent executives and BOD members) will be so wide and so deep, I think that visceral and even violent anger is inevitable, especially if Chapter 7 must be resorted to.
I hope Rick goes to jail before innocent people are hurt or killed. That would be best for law and order, and for an orderly society.
KatiePuckrik, zerofoo, GS650G: Agreed. In the last few months it has grown on my mind that the plan actually IS C11.
Kill that puppy but make it look like you tried not too. Reduces legal exposure. “It wasn’t are fault”. Boo hoo.
Is “Volt”, with it’s absurd time line (safely past any likely C11 threshold) just a smoke screen? And the media-schmoozing talented Mr. Lutz doing the smoking?
When people who are not actually stupid do apparently stupid things there is a reason.
Perhaps Rick and Bob are doing exactly what the BOD wants and are laughing at are calling them stupid-note parachute size.
Bunter
they’d need to pay off RedInk Rick, AND pay serious cheddar up front to a successor….and the board probably realizes they don’t have the cash to do it….
I think you’re all correct. Either the executive and board are so out of touch with reality, they’d be locked up for insanity if they were regular people; or they’re deliberately planning to bankrupt GM.
After Lutz’s admission that they’re out of money, I can only believe the latter. Why would anyone continue to hold the stock at all now?
If your plan is the scuttle the ship from the beginning, shouldn’t you sound the alarm to abandon ship BEFORE you get to shark infested waters. Not doing so makes you a mass murderer, especially if everyone is still on board like Ricky is doing. I guess he has been throwing people overboard for some time now.
And does the captain go down with his ship if he intentionally breaches the hull himself?
The intentional bankruptcy looks like it was the idea all along right now, I almost agree with you guys, except what is to be gained by doing that for those in charge. I can’t see them running foreign ops after they said, “oops we did all we could and it just couldn’t be saved, lets go and run China or Brazil, we have the management skills.”
Protecting and restoring what you have would be better then flushing it down the toilet.
Growing broke gracefully – been saying this for about 8 months now. Once they are broke they shed alot of weight through bankruptcy and then come back a different company.
I DON’T want the gov’t to bail these guys out b/c their troubles are the result of crummy business practices.
I guess I want them to be a stronger, leaner company than builds products I want to buy (see Toyota, Fiat, Honda, Renault, Nissan, Opel, Ford of Europe). I really doubt Detroit is going to try to satisify me very much but if they can recover from this and be a leaner company then great.
On the downsides I have witnessed a big company go broke and never pay a $10K bill for industrial supplies delivered from our family business.
Alot of businesses big and small besides just redundant union members and dealers are going to really get hurt by GM’s lack of initiative in trimming the fat internally without going broke. The ripple effect is going to have a serious effect on the supplier industry. Glad I got out back in February – just in case.
As these smaller businesses take it on the chin new rules will be written that governs how the survivors do business with the big three.
What should happen is a a corporate weed trimming getting out everybody that hinders the company rather than helping it. I’m not sure though that the top level people’s egos will let them make the right choices of who to let go and in what order. It’s going to be more like controlling kudzu than anything easy.
What is gained by all those currently in charge is a walk off into the sunset with millions banked over the last few years. They are all old enough and have enough to retire now if they wanted too. They really don’t care – they are riding out the last waves before the inevitable crash at the end. And they’ll eject and coast on their golden parachutes to a beach somewhere.
Pushing to go to C11 is just not how it works. You can file whenever the hell you like; there isn’t any entry requirements.
With a reorganization, you DO NOT want to be broke; you want to have enough cash to get back on track if you get a bit of relief from the court. GM is clearly already in the C11 zone; the longer it waits the lower the chance they will emerge. They will have to deal with a massive drop in sales from loss of consumer confidence, nobody wanting to finance their cars, etc… so they will have to have a lot of the bank to survive. Possibly much more than they have. Certainly less likely to emerge in a way remotely pleasing to Rabid Ricks ego. There is no reason to wait and every reason to get this done while they still have a few billion in the bank.
This isn’t some master plan; they are either in Russians-at-the-Reichstag level of denial or just spinning wheels until the the feds arrive with wheelbarrows of cash to stave of the day of reckoning.
What Wagoner and the board have done borders on criminal, in fact it should be criminal. GM’s fall isn’t funny, it isn’t a joke, and it isn’t something anyone should be cheerleading whether they love Toyotas or not. It’s going to hurt thousands of people within the company and thousands of people that do business with the company and the people at the top should be accountable for it.
Hundreds of thousands of people are going to lose their jobs because a handful of highly paid leaders couldn’t competently do their job.
We, the taxpayers, will be loaning money to these incompetent leaders at a reduced interest rate in the hopes that they have “seen the light” or are now somehow going to make better decisions.
Somebody call me when the shuttle lands.
From the Detroit News –
“I can understand the pressure, but from where I sit, it’s hard to see anybody else coping any better than what they have done,” said auto analyst David Healy of Burnham Securities.
Really? It looks to me as if Toyota, Honda, and Hyundai, at the very least, are doing better coping with high gas prices and a declining truck market.
Yes, it is an election year. But once we get past the first Tuesday in November, the pressure for a bailout goes away since it’ll be two years before the Representatives and 1/3rd of the Senators face another election. GM has only 14 weeks left to get maximum pressure for a deal. And if McCain wins, GM will need a really big majority of Congress critters to override a potential veto.
Various posts have described possible motives for Wagoner and the BOD; who has theories about the stock holder motivation?
http://moneycentral.msn.com/ownership?Symbol=GM
This guy has to be the greatest corporate genius of all time. To this, I know you’re all thinking “But what about Bob Nardelli?” which to that question I reply “But he was “fired” before HD went bankrupt”. So what that he was hired by Cerberus, at least he had to interview again for another opportunity to helm a company into the ground.
Mr. Wagoner has positioned himself perfectly to never be required to take responsibility for his amazingly outstanding horribleness. If he really cared about the company and the employees that he’s responsible to, he would realize that he’s not the best man for the job currently, and would take steps to turn over the company to somebody who he believes can save GM and the thousands of American citizens who depend upon his company for their way of life. I’m now disgusted.
Only now am I beginning to appreciate Farago’s “bankruptcy proof pension” question to Lutz and all GM execs.
I guess they feel if they fired the top guy; it would say too much about the current state of affairs. It would confirm in peoples minds that things must be really bad. And maybe they don’t have an ideal replacement lined out. Who can save a sinking ship and how? Let the man responsible go down with it might be their thinking. They likely know when too. They might know it’s too late.
Takes GM too long to make new models or revise current ones or adjust to changing market conditions. Plus, the cash from the sale to China or India might just be too irresistible. Who’s going to get all that money?
Considering it’s GM NA operations that lose all the money, why not close down the NA part and keep the money making portion going? Build the cars in those places and ship them back to the states? The good ones that sell well or are guaranteed to sell well.
Does GM have plants in Europe that pump out full size trucks day and night when there is no market for them but they build them anyways because the union says they must?
Is GM still building Hummers even though the dealer lots are full of them?
In the late 1990’s; no one even talked about or was concerned about what type of MPG’s these vehicles got.
The Ford Explorer used to be an absolute quintessential ubiquitous vehicle. They were thick in the streets. So many of them everywhere. All gone now. Where did they all go?
By the way,
As I write this, there’s a program on CNBC called “Saving GM.” More of an infomercial for GM really…
Well, to a degree. Certainly by TTAC standards it is. But I liked it when the guy asked Rick “How do you still have your job”.
First time I’ve seen Rick talk; he doesn’t seem like the kind of guy you’d want for a crisis. He talks like a lawyer.
“Yes, it is an election year. But once we get past the first Tuesday in November, the pressure for a bailout goes away since it’ll be two years before the Representatives and 1/3rd of the Senators face another election.”
This assumes though that the details of a bailout haven’t already been worked out privately. Would you bet against that possibility? I wouldn’t.
It’s sad they can’t come up with anyone better than this…
Clearly, they’re getting ready to file, and need him to do the work.
What else can be said? Ricky has a proven history of failure. Even with epic quarterly and yearly losses under his belt he still runs the ship. I would say it is a 16 million dollar a year mistake. Call me old fashioned…
Conspiracy Theory Alert: Wagoner works for Toyota!
As I write this, there’s a program on CNBC called “Saving GM.” More of an infomercial for GM really…
I forgot all about that, got rid of our cable so I couldn’t see it anyway. Does anyone know if there is a copy floating on the web so I can see it?