From the “with friends like these” department… The Detroit News reports that Michigan Senator Carl Levin met the press and announced his willingness to sacrifice GM CEO Rick Wagoner to get The General the bailout billions it needs thanks to Red Ink Rick’s myopia, intransigence and incompetence. “I’d be happy to tell (GM CEO) Rick Wagoner that he ought to consider resigning if that is the difference between getting this kind of support and not,” Levin said. So far, so good. And then… “The Detroit Democrat said the government ‘should have more than a say’ in management through an oversight board that would oversee the $25 billion in loans…” That’s just what GM needs to be more competitive: an oversight board beholden to politicians. Imagine what Toyota could do with one of those! Meanwhile, GM spokesman Greg Martin “declined to comment directly” on Levin’s remarks. “The global economic crisis that has put this industry in its current precarious position far exceeds any one individual.” Uh. Greg, you missed a few words there. Anyone care to help him out?
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I say more power to Senator Levin for making the ousting of Wagoner a prerequisite for GM getting bailout aid. After all, Wagoner is the CEO and top manager (I won’t say “leader”) and has only managed to drive GM into a ditch, all the while making massive coin in doing so. All Senator Levin, or anyone else for that matter, has to do is read any one of TTAC GM death watches to get the picture.
Wagoner’s tenure at GM reads like a Greek tragedy. As CEO, yes he has a responsibility and requirement to keep shareholders happy and GM shares valuable, but he is so focused on that as to neglect paying attention to the company and its products. Imagine if he had a long term vision about building the best cars and trucks on the planet and allowed the profits and stock prices to follow accordingly. I know, I know, we don’t live in a perfect world.
We all know the various stories and f-ups of his and his stooges over the years, so I’ll refrain from repeating them. Wagoner either believes that if he keeps on doing the things that he’s been trained to do over the last 30 years or so that things will magically work out in his and GM’s favor (well they already are in his favor with his golden parachute) or he is in some massive state of denial and shock and is paralyzed by indecision and fear. Probably some of both.
As far as the government oversight board, I dunno about that.
Comb-over Carl is hardly competent to judge this matter, but he’s right.
As the song goes
“We need a hero”
To inspire the GM troops after decades of decline and mediocrity.
As previously noted, my nominees are Roger Penske or Colin Powell.
Let’s get moving.
This was posted by someone on another site and just summarizes the issue perfectly !
The # 1 problem with the system happens to be the biggest obstacle holding Michigan hostage from foreign or (ironically) domestic capital. LABOR. Labor. Labor. Labor. Labor. Labor. Labor. Labor
Yup LABOR. Know where the tranplants (smart money) go? Not Michigan. Ever. Ever, ever, ever, ever ! The 300,000 mislead, overpaid, over benefited UAW members who run the state, own, Governor Grandholm and think they own the Democratic party are going to learn a very bitter lesson or two in the next couple of weeks.
Lesson 1. You can’t fool mother nature, taxpayers, consumers or even Democrats (who invented situational ethics and social engineering)
Lesson 2. Obama didn’t need the UAW to win Michigan, or Michigan to win the election. ONly the UAW thinks that.
Lesson 3. The coasts comprise the biggest parts of the auto market. They don’t like domestic products because they don’t like the “image” of the overpaid, over compensated, over benefitted, job banked UAW. Their money goes for things that benefit THEM…not for paying pensions higher than teachers, not for paying wages higher than educated, not for job banks, not for the reputation the UAW has for producing poor quality.
Lesson 4. No taxpayer will provide money to save UAW pensions when they don’t have pensions themselves and social security is bankrupt. WIll retired UAW labor be there to save the SS system? Not so much.
Lesson 5. DOmestic automakers need to sell more cars. WHy not spend the “taxpayers money” on direct government incentives to buy american cars? Give the consumer a break? Why why why not?
Lesson 6. FOrce Michigan to become a right to work state as a condition for “legislating” taxpayers’ bail out of the big three….>Level the playing field for the price of labor in the U.S. and the domestic industry will flourish on the private capital that will overwhelm them!!!! like a tsunami!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
For some reason I can’t edit the above post, but I also want to suggest a couple of Fiats as Rick’s going away gift.
That’s just what GM needs to be more competitive: an oversight board beholden to politicians
I’ve asked this before: how much worse could such an entity be than the current Board of Bystanders?
The Levins, like the Dingells, think that political power and office are their birthrights.
Dingell’s dad was a congresscritter before him. No nepotism there, no, not at all.
Levin’s brother, Sander, is in the US House. The family has ties to one of Detroit’s biggest law firms and their uncle Theodore Levin was named a Federal Judge in 1950 after considerable lobbying of both the Roosevelt and Truman administrations. Theodore’s son Charles, Carl & Sander’s first cousin, was a State Supreme Court justice. Charles’s brother Joe, and Sander’s son Andy, have both run for the state house unsuccessfully. Andy, whose admission to Harvard Law had, I’m sure, nothing at all to do with his congressman father, senator uncle, and state supreme court justice cousin, has never worked in the private sector, working to organize nursing home workers and then later for the AFL-CIO.
When you’re a politician, it’s hard to fail, even when you don’t get elected. He’s now Gov. Granholm’s Deputy Director for the Michigan Department of Labor and Economic Growth overseeing workforce development, career education and other programs. He’s sure doing a fine job creating jobs and fostering economic growth. Well, at least he found himself a job and has fostered his family’s own economic growth to the tune of $123,074 a year. Plus a fat package of bennies that makes the UAW’s benefits look positively miserly.
People sometimes mention the “revolving door”, where journalists switch between PR jobs in the private sector and working as actual journalists or industry analysts. It looks like that’s not the only revolving door.
psarhjinian :
I think we’re going to find out.
Lesson 3. The coasts comprise the biggest parts of the auto market. They don’t like domestic products because they don’t like the “image” of the overpaid, over compensated, over benefitted, job banked UAW.
Are you sure there isn’t any class bias involved there? No resentment that factory rats are making solid middle class incomes? I mean, it’s not like they went to Columbia or Harvard. Stupid people like autoworkers shouldn’t make that much money.
Their money goes for things that benefit THEM…not for paying pensions higher than teachers,
Actually, with the power of the NEA and AFT, public school teachers have outstanding pensions, and are *paid better than most other professionals, based on the number of hours worked.
not for paying wages higher than educated,
Nope, no class bias here. None at all.
not for job banks,
The job banks are the fault of management, not the union. I’m hardly a union cheerleader but if you or I were negotiating on behalf of union members, we might reach for all we can grab.
not for the reputation the UAW has for producing poor quality.
Reputations are funny things. Let’s say, hypothetically, that your sister, wife or daughter, had a lot of fun back in high school. As long as people mention what she did in the past, she has a “reputation”, even though she may be chaste today.
How does one change a reputation, if people continue to propagate it long after it’s no longer accurate?
*Note to NEA/AFT apologists, don’t’ bother with propaganda about how you stay up after midnight grading papers or spend thousands out of your own pockets on school supplies. My sister and her husband are public school teachers. They work six hours a day, 9 months a year, and get two long vacations in December and March. They have outstanding benefit and pension plans. She drives Lincoln. He drives a Cadillac.
While I agree that a Government oversight board probably will do nothing in terms of helping GM with Toyota, it appears that nothing short of Government action can cause Rick Wagoner to leave the building.
As previously noted, my nominees are Roger Penske or Colin Powell.
That’s almost breathtaking how you are so right and so wrong in the same sentence.
Powell has never worked in the private sector, let alone run a manufacturing enterprise. If Nardelli was a bad pick for Chrysler, and Mullaly a good move by Ford, having Colin Powell try to run GM would fall somewhere south of ridiculous.
Roger Penske, on the other hand, is not just arguably the smartest businessperson in Detroit, he’s one of the clearest thinking business minds in the United States. At the auto shows I love asking him questions or listening in when he’s interviewed because the guy just plain knows business. Frankly, I’m surprised nobody in the media has interviewed him about the implosion or the bailout. He’s got a lot of skin in the game, controlling over 150 dealerships in the US.
OTOH, he did sell Detroit Diesel to Daimler which I think was a mistake. Oh well, even the best managers sometimes yank a pitcher and go to the bullpen too early and I’m sure he made money on the deal.
You gotta admire, at least a little, how Wagoner is trying to stick it out. He may not know how to run a big car company but he’s no quitter.
I wonder if he swaps notes with Rod Marinelli.
Speaking of Mullaly, I hope he doesn’t get thrown under the same bus with Wagoner and all of Chrysler. He (or Carlos Ghosn more evil twin) exactly the kind of guy GM could use right now.
I can think of a better pick: Ross Perot.
@ Bozoer Rebbe
“You gotta admire, at least a little, how Wagoner is trying to stick it out. He may not know how to run a big car company but he’s no quitter.”
With all due respect, that is a profoundly twisted statement. Wagoner has never demonstrated the intestinal fortitude or leadership skills needed to earn the salary he’s being paid. His lack of vision has cost thousands of people their jobs and will cost taxpayers billions before this is over.
Admire him for sticking it out? About as much as I admired the leaders of Enron for sticking it out.
Why don’t we do a little shuffling and put Nardelli at the helm of GM? He knows how to wield a… Battleaxe.
After 5 years, find a new product oriented guy (I’m assuming Lutz will be retired/gone by then) and let him have fun.
As for Chrysler, just leave it with Press and LaSorda. Like you really need all three of them anyway.
Government oversight seems to be the big thing. Angela Merkel of Germany has stated that they will oversee the hell out of the resuscitation of ailing brands operating in Germany.
Should slow down things admirably.
Fitting that Red-Ink Rick would get run over by a GM bus.
Of course he will toss Rick. Badfinger — ‘nother story.
If it takes a threat from Congress to deny these loans to get the useless and spineless GM board of directors to shitcan Rick Wagoner, then so be it. They should all get marched out the door in handcuffs immediately after finaly making the first tough decision they’ve made in 20 years.
Wagoner may have inherited a lot of problems when he took over GM, but it’s been 10 years and the company was losing a lot of money on his watch long before this latest economic downturn. They should have fired him for that Fiat $2 Billion fiasco alone.
Let’s not also forget that he was one of the top dogs at GM for decades before taking over the top spot. He was just a continuation of the same inbred, overpaid, and incompetant leadership that rises to the top in that place.
As for the UAW, they may not be THE reason for GM’s problem but they are a big one.
Personally, I don’t think it’s the workers on the line doing a poor job of screwing cars together that led to GM’s quality problems. However, the union’s stranglehold over the supply chain, the increased cost this has meant over the years, and their unwillingness to make concessions that led to the company taking quality out of the components that they were installing in order to stay remotely competitive on price.
Yes, GM leaders agreed to a series of unsustainable contracts but don’t forget that the UAW was able to extort these deals by shutting down the plants that cost GM the most. Some of these strikes cost GM billions of dollars… by shutting down just a few key parts plants the UAW shut down nearly all production across the country while GM was forced to pay the rest of the non-striking workers for sitting on their rear ends. It’s no wonder that GM management agreed to these deals just to get labor back on the assembly lines.
Going back 15 years that I’m familiar with, the UAW continuously refused to take the slightest cuts in healthcare coverage (not even reasonable co-pays or reduced coverage for Viagra, seriously, who else in this country has that covered by their health insurance?). Attempts to make factories more efficient were hampered by refusals to change pay and overtime rules based on production volumes rather than hours worked. The list goes on and on. We’ll never know, but perhaps a lot of jobs could have been saved if a few of these fair concessions had been made over the years?
I worked in auto factories in the past (not as a union represented worker) and I don’t argue that the work is arduous and often mindnumbing. It’s hard, sweaty, and sometimes dangerous work, but I also don’t doubt that there are ten people willing to take those union jobs for half the pay and an understanding that job security is earned by doing your job well and considering the financial health of your employer, not by going on strike and costing your employer billions of dollars.
Great Choice of Photos! There is a lot of poetic justice that Wagoner is thrown under a bus made by GM during its Golden Age.
@stevelovescars
When accountants are appointed to head manufacturing companies you are assured of a couple of things:
1. The company starts scaling back on R&D and quality.
2. The activities focus on financial gains and financial operations, not engineering.
GM will be taught as a business case for as long as there are business schools.
Bozoer, do you honestly think teaching just another job? Its the kind of job where failure to put in 110% can seriously ruin people’s lives.
Somebody needs to tell rkeep820 that the labor issue is over. The UAW already agreed to cost parity with the transplants when they agreed to absolve the Detroit 2.8 of their pension and health care sins. UAW might have hampered profitability but it sure as hell didn’t hamper sales (unless you really are retarded enough to not by a Detroit car just because they’re built by unionized labor).
Michigan a right-to-work state? Pssh, please. There are only 22 right-to-work states and they’re almost all located in the confederate states. We might as well dig up Robert E. Lee and Jefferson Davis and offer them an unconditional surrender.
Bozer Reebe
OTOH, he did sell Detroit Diesel to Daimler which I think was a mistake. Oh well, even the best managers sometimes yank a pitcher and go to the bullpen too early and I’m sure he made money on the deal.
IMHO Selling Detroit Diesel to the Truck group of Mercedes was a good move. In the strange alternative universe of heavy truck OEMs its a good fit with the Mercedes Truck Group.
Historically semi-tractor OEMs would allow you to choose from 2-3+ different engines when you ordered your truck. The trend has been moving away from this with Caterpillar announcing that they will exit the on-highway engine market in 2010. Its a tough road to hoe being an engine OEM not allied with a tractor producer.
Yesterday Nov.16, CNBC did a re run of their program “Saving GM” There he was in all his glory, Rick W!
Can you imagine anyone else that more or less loss tons of Money in any Corporation still being in charge of the “hen house”? Some how this is unreal!
So Levin will ask Wagoner to “consider resigning”. Hmmm. That’s a big blah. I wouldn’t have any trouble telling him to vacate the building immediately, taking the family photographs with him, and relieving him of his GM security pass and any and all keys to any GM property.
This morning, our radio and TV networks here in Canada have multiple lead stories about possible bailouts for GM, and Canada’s likely contribution to the fund. The other guys get almost no mention. Yesterday, the national radio phone-in show spent two hours on the subject.
Amazingly on that show, Desrosiers (industry car consultant) was reasonable (as per typical TTAC comments) in his comments as he has been a major GM booster in the past, wilfully avoiding reality IMHO. But a retired GM engineer just went on about all the models that GM has that get the worlds’s best mileage. (I hope he’s already banked the check, and is no longer a fully paid-up member of APEO).
The average joe calling in was amazingly well-informed, I thought, except for the fact that not a soul mouthed the word “Wagoner”.
Now, insofar as there probably will be a bailout of some kind, I find myself completely confused as to opinions here on TTAC. Snide remarks about what a government “committee” would be like running GM seem to miss the point that the people they have now are worse than completely useless. They have behaved in what I would consider to be a treasonable manner if this were a matter of national security.
If it were my money being force-lent to some outfit run by villains interested only in themselves, you could be 100% sure they would be busted out of their positions forthwith. We are not talking chump change here, and I would want results for my money. Why should the US government behave differently when using your and my (Canadian) money? Get real.
If GM had had the honour to go into C11, the receiver or trustee or whatever his name is would be the man in charge anyway, not Wagoner and his band of nitwits. So, what’s the diff?
I’m reminded of a story from my youth in the UK. A hobo arrived at the door of a preacher, and asked for bread. The preacher went and brought out a large piece of a nice new loaf, at which the hobo stared in horror. “What, no butter?!”
The door was firmly slammed in his face.
The moral? Beggars cannot be choosers.
@rkeep820 :
Right on. It was those UAW dummies who birthed Saturn. A stroke of genius if ever one was made. What an idea; have a brand without sufficient dealers to make GM a profit even if it had homerun products while simultaneously starving established brands such as Buick/Pontiac/GMC/Olds of product. Brilliant.
And then there was the UAW screwup of pissing away money on the likes of Solstice, Camaro and G8. Another winner. Honda/Toyota have made their high mileage reps on the Civic and Corolla vs. the Cobalt. How much could have been done for the Cobalt with the loot squandered on the Solsctice, etc.
And of course the UAW insisted on the Hummer as a separate brand that now whithers. What a coup. Drain dealers of their investments while simultaneously further damaging GM’s image as maker of gas hogs.
Screw the workers. Cut their pay and up the exec bonuses.
@mel23:
Saturn certainly never had homerun products when they were independent… the cars they had to sell were never even really average for their class. Saturn was forced to use sub-par components from Delco which led to the vast majority of their warranty claims (Alternators were a primary problem until Delphi was sold and they were able to switch suppliers, for example).
At their peak around 1993-4, Saturn sold over 300,000 cars and this was just with the “s-series” small cars in coupe, sedan, and wagon body styles. Today they sell half that many with a full lineup. I wouldn’t say that a lack of dealers was an issue. Imagine what could have been if they had received updated products before the brand was run into the rocks?
The UAW national leadership also despised Saturn precisely because their unique union contract and flexible rules had represented and unrepresented employees working closely together. The contract and work arrangements were tossed out under threat by the UAW back around 1999 or 2000. One particular item that miffed the UAW was that Spring Hill remained the only assembly plant operating during the extortion (oops, I meant strike for job security) of 1998.
AG:
Just another post for accuracy.
You post above:
“There are only 22 right-to-work states and they’re almost all located in the confederate states.”
That is not true. You can look it up.
http://www.nrtw.org/rtws.htm
Now if you meant to say the former Confederate States are RTW states, you can try again.
jackc10,
If Kentucky is a “Forced-Unionism” state as the site you linked to says, why is Toyota in Georgetown not a unionised plant?
Bozoer, do you honestly think teaching just another job? Its the kind of job where failure to put in 110% can seriously ruin people’s lives.
Near as I can tell, a large chunk of the NEA/AFT membership, at least from how their unions act, treat it like just another job. If they were serious about quality education, the unions wouldn’t fight tooth and nail to keep incompetents on the job – they’d let management fire them.
A teacher doesn’t need to put in “110%”, though many are incredibly dedicated. In general, they are well compensated compared to other professionals.
IMHO Selling Detroit Diesel to the Truck group of Mercedes was a good move.
I meant it was a mistake for Penske and that he should have retained an ownership interest. I’m sure it was a good deal for Mercedes.
Keeping a good relationship with Daimler, though, hasn’t hurt Penske. His company is handling the distribution of the smart brand in the US for M-B.