The New York Times entered the irony-free zone this morning, with an op ed entitled “GM’s Secret Success.” WTF? Is one of the Gray Lady’s ambassadors about to call GM’s descent into bankruptcy and subsequent raid on the public purse a “success”? Nah. The author of the forthcoming tome “Why G.M. Matters: Inside the Race to Transform an American Icon” wants you to know that GM CEO Rick Wagoner is a genius interruptus. “In reality, Mr. Wagoner has presided over the most sweeping transformation of G.M. since the 1920s,” William J. Holstein opines. “He has reversed management’s long practice of meekly going along with the demands of the United Auto Workers, notably with a deal to transfer health care costs to a union-controlled trust over the next two years.” Ah, a tour of an alternate reality. Cool. But why stop there? Why indeed.
“A decade ago, suggesting that Mr. Wagoner attempt these restructuring goals would have been ridiculed as unrealistic. But these moves have largely succeeded and by 2010 should strip $5,000 from the cost of every G.M. vehicle…
“The quality gap between G.M. and Toyota has been closed…
“On the innovation front, Mr. Wagoner was responsible for introducing OnStar, the onboard communications and navigation system, and he has made a huge commitment to lithium-ion batteries, which will power the Chevrolet Volt, an extended-range electric vehicle.
“Lastly, Mr. Wagoner has globalized G.M. to a degree that it never has been before. The company’s strong position in China has helped support the difficult turnaround effort in North America.
“Before the financial crisis tanked American automotive sales, Mr. Wagoner had almost guided the country’s largest industrial company into a new era, demonstrating great resilience in the face of intense global competition. Making him a scapegoat might be politically expedient but it ignores the very tangible progress he has achieved.”
GM CEO’s not a scapegoat for GM’s descent into disaster. He’s responsible. Not all of it, obviously. But enough that future historians– rather than propagandists– will place the blame squarely where it belongs: on Wagoner’s shoulders.
Meanwhile, what in the world motivated The New York Times to print this piece of self-promoting tripe? Doesn’t the op ed department even talk to their business editor?
– Wagoner told the world GM was in-effect bankrupt and was likely to run out of money shortly (I forget the month), while failing to present a plan to protect customers that might have been retained in that situation. Customers walked away at a faster rate than GM’s competition.
– Wagoner was prepared to put a still insolvent ~12m SAAR* as a worst case while requesting $17b from taxpayers, showing he is not in touch with the on-the-ground reality of their own sales.
Two killer blows in normal circumstances I would have thought, and he should resign. Confidence can not return until he does.
* SAAR might touch 10m heading into 2009.
You forgot to include this little paragraph from the article: William J. Holstein is the author of the forthcoming “Why G.M. Matters: Inside the Race to Transform an American Icon.”
No doubt appearing in your favorite bookseller’s bargain bin soon.
Quote Robert Farago: ” Meanwhile, what in the world motivated The New York Times to print this piece of self-promoting tripe? Doesn’t the op ed department even talk to their business editor?”
The simple answer might be more GM advertising dollars shoveled the NYT’s way?!?!? Maybe the op ed department received a call from the Sale Department. Now that Uncle Sugar has turned on the tap, maybe GM has turned on the Advertising Dollars Tap as well?!?!
One word is missing: “Advertorial”.
The NYT former distribution center in Edison NJ (NJTP Exit 10) is vacant and for sale. Good luck with that.
Stu…we just shared a thought wave.
I have a fair amount of sympathy for the guy in some respects. His job pre-collapse had to have been like trying to train a herd of fat housecats to run a marathon, and now he has to beg for help.
The real indicator he isn’t the man for the job is that the board of directors has been so acquiescent; if the guardians of the status quo think you’re doing great, you aren’t doing enough.
While Mr Wagoner did in fact make many of these decisions, what is conveniently overlooked is that he made them long after the fact, and not before the issues at hand became economically life threatening for the company.
A closer look would show (history will tell) that most of GM’s managment and BOD made decisions only after any and all other options were no longer available.
Simply put, they waited until there were no other choices available.
GM is paying top dollar in management compensation but you’d never know it by their decision making.
Rick was responsible for Onstar holds as much credence as Gore invented the Internet. PLEASE…
Rick wasn’t the CEO until 2000 and Onstar predates Rick sitting in the big chair by 5 years. It was first available as a dealer installed option in certain 1996 Caddies…
Why is it that every thing that GM did wrong that predates Rick was “out of his control”… But anything the GM did right (and it is a VERY short list) lands at the feet of our golden child.
If you are going to say you had a hand in all of the good… Then you need to pony up for…
GMAC,Fiat… (you know the list of 25-30 MAJOR business errors)
Sweeping transformation, indeed. But no mention in the op ed of two rather obvious elements of that transformation. Namely, the decimation of the stock value and the decline in market share, both of which were well under way before the financial crisis.
Granted, the decline in market share started well before Wagoner took over, but it continued on his watch.
These CEO puff pieces regularly appear just before the subject is ejected through the canopy and out on the street.
The NY Times is always good for a laugh. They are the one newspaper which doesn’t need to have a comics section.
This thing about Gore inventing the internet is tiring. That was something Bush claimed Gore had said and it was retracted as a lie. Is that surprising?
here’s a quote resulting from 3 seconds of internet searching:
But the real question is what, if anything, did Gore actually do to create the modern Internet? According to Vincent Cerf, a senior vice president with MCI Worldcom who’s been called the Father of the Internet, “The Internet would not be where it is in the United States without the strong support given to it and related research areas by the Vice President in his current role and in his earlier role as Senator.”
Try googling “Gore internet”. OK? After 8 years of cr_p has a red flag gone up yet? Hello… hello?
@probert,
There are still people who believe Marconi invented radio.
There is bankruptcy and even bailout talk about the NYT as well. As much as I hate to say it, Wagoner et al looks like a genius compared with NYT’s hereditary management.
“Before the financial crisis tanked American automotive sales, Mr. Wagoner had almost guided the country’s largest industrial company into a new era….”
Whilst the current financial crisis is a truly terrible crisis for many people, it is without a doubt the best thing that ever could have happened to Mr. Wagoner personally.
Had the economy kept cliping along at 17 mil. car sales, easy credit, etc…what would have happened?
GM still augers into the ground at WOT…just might take 6, 12, 18 months longer. With other OEs surviving and some thriving in a robust market Wagoner’s many shortcomings would have been revealed for all to see as he eventually skulked away from the Ren Cen in disgrace.
But now? When he eventually does get the boot he and his fanboys should be able to spin it as courageous but sad tale of a true change agent felled by forces far beyond his control, yada yada.
The average man in the street won’t have a clue as to his true role in bringing total ruin to GM.
If he really plays his cards right maybe he’ll get to be the new Federal Car Czar.
That almost made my head explode.
Your right Probert. Al Gore never claimed to invent the internet.
Al Gore actually claimed that he created the internet.
Kinda like the internet God or something.
“sweeping transformation”. Put another way, GM is now the shiniest turd in the litter box!
GM’s domestic automobile market share in 1978: 44%. In 2008: 24%. That tells you everything you need to know.
Gore claimed he sat on the Senate committee which funded the internet, which is a true statement. Gore was the leading proponent of funding the internet, he never said he created the internet, or invented it.
Tesla invented radio, which the US Supreme Court eventually upheld.
Matt51,
I’m so glad some people do actually pay attention…
In a way GM and the NYT are similar companies. Both use to be the big bully on their block. But now both are facing stiff competition in the market. GM from foreign transplants and the NYT from the internet. And each is failing to deal with the it and losing market share.
No wonder the NYT thinks GM is a success.
Down looks like up from where they are standing. The internet will kill off the NYT before GM succumbs to foreign competition IMO.
I wonder when NYT is going to ask for a bailout. Just like in Detroit there are people who still think GM matters, so do some people in NY think that NYT matters.
Al Gore coined the term “information superhighway”
GM would be worse off without Wagoner, no one else would have done better. GMs problems were caused by Roger Smith and previous
Getting Daewoo was a great idea
Two questions:
How much ad revenue has the NYT lost in the last 6 months?
And will this verbal tripe get them a slice of that sweet, sweet bailout money?
davey:
GM would be worse off without Wagoner
You know if you took every major decision that Rick had his hand in and did the EXACT opposite. GM would be MUCH better off today.
Here is the starter list:
1) Fiat
2) GMAC
3) Slow with Hybrids
4) Ignoring Small Cars
5) Killing Olds
6) Killing the Camaro
7) Slow to bring the Camaro Back
8) Market Share
9) Profit
10) “Pontiac is Car” slogan
11) The sorry excuse that the new STS is
12) Re-badging at Saturn and Pontiac
13) Starving Buick of product
14) Lame (and I mean really lame) marketing of the new GTO
15) early UAW deals he signed
16) Buying Hummer, run it into the ground, only to try and sell it for pennies on the dollar
17) The Aztek
18) Accounting “irregularities”
19) Share price/Market Cap
20) Delphi
21) One PR nightmare after another
22) No Cruze for you
How many more mistakes MUST we tolerate with this guy
I suspect that the board of nondirectors at GM would agree whole heartedly with this piece. That’s why subjective management reviews are largely worthless.
CameroKid:
Nice list. I’d just add the scorched earth lease terminations and crushing of all Saturn EV-1 vehicles to the list of Rabid Rick’s Mega Mistakes.
Pontiac better be car. Oh, crappy GM compact car? Never mind, I’ll go Japanese as usual.
What’s the problem with the STS? Maybe I read it here at TTAC. In my mind, it’s probably one of the best cars GM currently makes.
mtypex
Re STS.. you like the rest of the world confuse the CTS and the STS as the same car…
If the CTS was a beautiful woman…
The STS is her fat, ugly, high maintenance sister.
PS I’m glad that GM clarified the whole Pontiac is car thing…
You know Pontiac is a potato too ;)
Here is the starter list:
1) Fiat
Could have worked, things change
2) GMAC
3) Slow with Hybrids
Not really- Hybrids were a new technology, GM has more hybrids than anyone else
4) Ignoring Small Cars
Big cars and trucks generally sell better, turning SUVs and Trucks into high profit, high demand vehicles was genius
5) Killing Olds
good riddance- too many brands, they need to kill Pontiac, Saturn and Buick as well
6) Killing the Camaro
good riddance- crap
7) Slow to bring the Camaro Back
They shouldn’t bring it back at all
8) Market Share
Nothing much can be done about this, If new companies show up selling decent cars your share goes down.
9) Profit
more competition
10) “Pontiac is Car” slogan
meh, advertising is always a bit cheesy
11) The sorry excuse that the new STS is
It’s only a “sorry excuse” because someone on the internet told you
12) Re-badging at Saturn and Pontiac
rebadging saves money
13) Starving Buick of product
They have the same amount of product they always had
14) Lame (and I mean really lame) marketing of the new GTO
It wouldn’t have sold anyway
15) early UAW deals he signed
The deals that pay worker wages.
16) Buying Hummer, run it into the ground, only to try and sell it for pennies on the dollar
HUMMER was successful until 2008
17) The Aztek
awesome car- way ahead of its time
18) Accounting “irregularities”
19) Share price/Market Cap
20) Delphi
21) One PR nightmare after another
I don’t know business
22) No Cruze for you
Cruze is coming
The Aztek
awesome car- way ahead of its time
Seriously? You can’t possible mean that. Even GM officials and others within the industry think that it was a turd:
“That’s the big gorilla sitting in the corner of the room,” said Gerald C. Meyers, former chief executive of the defunct American Motors Corp. “Just look at the Aztek; it was hokey, nonsensical, ugly — there are not enough adjectives to describe that vehicle. It . . . was indicative of the failed product development system that has been nurtured over there for so long.”
GM executives, privately, are quick to concede the point. “The Aztek was a turning point because it did articulate everything that was wrong with the system,” said one GM official, who spoke on condition of anonymity for fear of losing his job. “But it’s been like turning the Titanic.”
http://www.washingtonpost.com/wp-dyn/content/article/2005/06/10/AR2005061002188.html
GM has more hybrids than anyone else
No, they don’t. They’d like people to think they do, but the Aura/Malibu, BAS Vue, 2Mode Vue and GMT900s count—effectively—as three models, none of which actually sell.
Toyota has five (Prius, Camry, RX/Highlander, GS and LS). Toyota sold almost a quarter-million hybrids last year in the US alone, next to GM’s anemic ten thousand. Did you know that the LS600h sold three times as many units as the Aura, or that the RX400h outsold the Vue by an order or magnitude?
I’d refute some of your other points, but that one was the most egregious. Wagoner has done a bad job, and shows no sign of doing different, or acknowledging his failings. I don’t think that letting him go now would make a whit of difference, if not make things worse, but I do think he should have been canned after the Fiat Fiasco.
dave49, Some of your objections to the list can be considered point of view differences but some are just plain wrong. Those include:
3 – see psarhjinian’s explanation. Lutz’ hubris makes this count for double.
4 – marketing expensive vehicles to people that don’t need them was alwasy a crapshoot, susceptible to market rationalization during gas price shocks. And this segment is supported by stupid tax breaks… something bad deserves to happen here.
6 or 7 – At least ONE of these reflects very badly on Wagoner and Lutz. Take your pick and let them take their lumps.
8 and 9 – the end result of a bad job.
12 – Rebadging costs extra and then hurts dealers, who must cut each other’s throats. Do one and do it well. The extra marketing and development could be put into brake rotos that don’t warp when you look at them cross-eyed.
15 – If he was destined to lead GM, we must reckon that Wagoner’s influence goes back before ascension to CEO. Say, 15 years. And no improvement in the UAW situation until GM was actually on the ropes (some would say over them and unconscious besides the ring). Bad priorities in allowing this to fester so long.
18 – Someone should have lost their job over all the restatements. Wagoner should have provided a suitable sacrificial lamb, if nothing else. The BOD didn’t do its job, here, for sure.
22 – THe Cruze is a big symptom of some of GM’s biggest problems. A “world car” that isn’t world-ready for the worlds’ largest auto market? Who allowed this? Answer: Wagoner and Lutz. And GM lags so badly in flex manufacturing that they can’t react quickly to ANY market shakeups. Stupid, stupid, stupid.
Like I said, Wagoner’s had a long time to fix what really ails GM but he didn’t recognize and/or address it for a loooong time. Show him the door.
“In reality, Mr. Wagoner has presided over the most sweeping transformation of G.M. since the 1920s,” 1920 = Success, 2009 = Failure
Nothing much can be done about this, If new companies show up selling decent cars your share goes down.
Not if you are selling quality cars at a fair price..
Dude… Its called LEADERSHIP!
If you say… wow.. Look at the Nice Cars that Toyota are making… “Nothing much can be done” then you are doomed to end up flying your personal jet to DC to beg for money…
and re #11 take a look at the car, take a look at year over year sales and tell me it is a great hit… I have driven the new STS and the review on this website got it bang on…
https://www.thetruthaboutcars.com/2008-cadillac-sts-v6-review/
and #14 if the new GTO wasn’t going to sell.. why bring it here in the first place… Do you see the problems with all of your arguments? OK there is no point in marketing the new GTO… then why waste the money to bring the car here? From your POV GM doesn’t have a CEO.. the company is just run by some guy who is flipping a coin.
BTW with Rick’s luck it seems to be a double headed coin and Rick keeps calling TAILS!
I am no Wagoner (or Lutz) fan by any means, but…
…maybe (just maybe) he has implemented changes that we, the ignorant masses, have not been pprivvey to or have overlooked and those changes just need time to come to fruition?
Also, I have been meaning to say this for awhile but the Big3 sold SUV’s and Trucks because Americans DEMANDED them. When a customer walks into a dealer to buy a Chrysler Minivan, the salesman doesn’t shuffle them into a Smart Fourfour! He may shuffle them to a Durango or CUV, but never would he say “You know, this is going to suck if gas prices go to $4.00…”.
Not having a competitive small car is a problem but when the only small cars you sell are to the rental companies, what’s the point? The only failure here is that GM and Ford don’t utilize their European cars (Opal/Ford Europe) for their econoboxes rather than producing them in the US and duplicating effort.
Hybrid/Green/Blue is just marketing BS. When gas is under $2 a gallon, no one will care. Besides, if it mattered, we would have micro cars such as the Ligier or Axiom and we would have clean 2-stoke technology. Obvioulsy it doesn’t.
Arrrg! This is so frustrating!
Also, I have been meaning to say this for a while but the Big3 sold SUV’s and Trucks because Americans DEMANDED them.
Not having a competitive small car is a problem but when the only small cars you sell are to the rental companies, what’s the point?
Please note that nowhere in my “Rick FAIL” list is
“Bet the farm on BOF Trucks”
Selling trucks was not a mistake… In fact it was one of the VERY FEW smart things that Rick etal did. But take a look out of your window next time you drive anywhere… Our cities, back roads, highways are awash in SMALL imported cars. To say that the ONLY sales outlet for small cars was rental companies is just NOT true.
GM (and the others) completely forgot what a “nice” small car was… To GM a small car was a “penalty box” that you had to drive because you lost your job or your ex-wife got the “real” car in the settlement.
To this day GM still doesn’t get the small car… and they REALLY don’t get the high-end small car…
ALL of GM’s small cars lack CRITICAL options that make them competitive… wrong engines, 4 speed auto transmissions, no manual, no NAV, no climate control, etc etc etc.
GM’s market share problems are a DIRECT result of ignoring this market. That, and ignoring the familly sedan market too. And the sport coupes, and the minivan, and the highend luxury sedan. and hybrids. etc etc etc..