Press reports confirm that GM CEO Rick Wagoner’s hand-picked successor Fritz Henderson will succeed him—temporarily. According to The Wall Street Journal, the Presidential Task Force on Automobiles (PTFOA) sent GM a memo mandating that the company replace Wagoner with Henderson as interim CEO and elevate Board Member Kent Kresa as interim chairman of the board. The clear implication: the PTFOA is now in control of GM at its highest levels and fully intends on restructuring the automaker according to its own strategy. To justify this wholesale assault on free market capitalism, the PTFOA ripped GM’s viability plan to shreds. The Journal reports the ultimate condemnation: “While the Company has made meaningful progress in its turnaround plan over the last few years, the progress has been far too slow, allowing the Company to continue to lag the best-in-class competitors.”
Find Reviews by Make:
Read all comments
Don’t worry, the goverment is going to use the Drivers License Registration model combined with the Post Office to provide a winning model. Toyota doesn’t have a chance.
Just look at what the government did with Fannie, Freddie and AIG.
True state run socialism is alive and well in the United States.
But no worries, the people will still have the freedom to choose between Coke and Pepsi, 7-up and Sprite, ABC and NBC, Republican and Democrat.
And the Presidential Medal of Freedom goes to the guy who changed the name of French Fries to Freedom Fries.
Is now the time to move to Canada or Australia?
Finally, realization that this is the end of a bad dream for all of us. How much are the taxpayers supposed to shoulder.
First we shore up the companies for all of their bad decisions, secondly, we pay consumers to take the cars through cheap loans, tax credits or what ever.
Next we subsidize the parts makers who are really the off falls of the parent company in the first place. Finally, to keep it going, I guess we subsidize the trade in to make it possible to keep buying new cars that have no value used. Even a socialized Counry would stop far short of this.
I lived to see Bethlehem Steel the World’s second largest steel producer, disappear off the radar screen a few years ago. All that’s left is the taxpayers picking up some of the pension money owed the retirees, and a couple of their best plants run by someone else. But this is a lot cheaper than holding on to the whole pie.
Bethlehem steel was just like GM. First they came out of the industrial revolution and seemed to make all the right moves. Later they went side ways for many years after WWII. Actually what appeared to be maturation was really rot setting in. The Steelworkers union and Bethlehem were in a death lock together as the titanic went down.
I don’t remember reading one article saying the government should save a 100 year old company because of the jobs or it’s national significance.
Fannie Mae and Freddie Mac are good examples of government gone wrong. They were an integral part of government, posing as not part of government, and overseen by 100% incompetent regulator, and both cooked their own books, to make their bonuses (inside fraud) and facilitated housing bubble (driven by outside factors). They went berserk in republican era, but democrats share the blame.
Not AIG. AIG is example of not enough government. Credit default swaps were not illegal anywhere. They were unregulated. This gap in regulatory oversight was deliberately arranged by republicans and democrats and “foreigners” too. AIG financial products division CDS desk floated AIG right over that falls, and nobody anywhere in government was working with that kind of risk in sight. 100% of the money going to AIG is to make good on those swaps. The entire rest of AIG (99.95% of the total) is hugely attractive, profitable, successful group of insurance and financial companies, all of whom are collateral damage from that CDS desk in London.
I think Obama team’s statement and decision makes sense. Its all true. They are agreeing point by point with TTAC historical rant. When did something like that ever happen anywhere in US Government before? A commission speaks what makes sense to a highly inflammatory issue, with countless billions at stake, and takes appropriate action? I cannot provide a single example of this happening before. I have 100% faith that any previous administration in 30 years would have done the wrong thing on purpose (republicans) or by getting pushed aside (democrats).
Hopefully Henderson’s appointment is in fact “temporary” as the nihilistic GM mentality runs deep. I don’t know much about Fritz Henderson and don’t mean to denigrate the man but replacing one GM talking head with another will not resolve a single thing.
If Ford’s experiment with Mulally is any indication of the right way to proceed, i.e. getting an outsider, then GM should follow suit.
This is one of those times when I shake my head. What would you prefer? Should the Feds have accepted GMs viability plan? Considering the editorial stance here, that’s clearly not the case. So now we actually have a situation where the Feds did the right thing by ripping it up.
As we get deeper into this recession, I’m just about fed up with all the negativity. The world is not ending. It’s changing, but it’s not ending.
bunkie is right. Canning Wagoner was exactly the right thing to do. In fact, GM’s worthless Bored of Directors should have done it a long time ago.
And it shouldn’t stop at Wagoner either. All of GM’s inbred upper-management should be shown the door too.
Wagoner should certainly have resigned. The problem I have is that the government should not be meddling with these businesses or banks. Companies should be allowed to fail if that is their fate. That is the main problem I have with the whole situation.
The government should never have gotten into the business of saving business.
“To justify this wholesale assault on free market capitalism”
Not so much. GM and Chrysler surrendered any claim to the privileges of capitalism when they took government money.
“To justify this wholesale assault on free market capitalism…”
Really? I don’t see it that way. GM was perfectly free to go Chap 11, and chose instead to go begging for money. When you make a deal with the devil (figuratively speaking), don’t be surprised when the terms aren’t to your favor.
Is there any way to turn around GM that doesn’t involve removing top management?
@ johnny ro :
“I think Obama team’s statement and decision makes sense. Its all true. They are agreeing point by point with TTAC historical rant. When did something like that ever happen anywhere in US Government before? A commission speaks what makes sense to a highly inflammatory issue, with countless billions at stake, and takes appropriate action? I cannot provide a single example of this happening before. I have 100% faith that any previous administration in 30 years would have done the wrong thing on purpose (republicans) or by getting pushed aside (democrats).”
Why is giving GM and Chrysler even more money while acknowledging that it simply to keep them alive until they go under in 60 days a good plan? Why not put them both into CH11 right now? What are these bridge loans for? Do you really believe that Fritz is going to come up with a drastically different and better plan than Rick? Or that the bondholders will swap their debt for equity when they know the equity isn’t worth squat? To me this is essentially another punt rather than a decision.
Those companies gave up their rights to keep the government out of their business when they went to Washington demanding access to our tax dollars.
Please. Get real. The government should have told them to go file bk back then. But they didn’t. And now they (well, we) own them.
I don’t understand your viewpoint here, Robert. It seems 180 degrees out-of-phase with what you have been saying for years.
Wagoner is incompetent. The government lent GM billions and said, “have a plan for viability by March 31”.
It’s March 30, and the plan was crap. You’ve said so many times. Government sees no way to get back its and your money with a plan cynically put forward that was about as thought out as a first-year term paper.
Well, if you owe me money, and I decide your plan to pay me back is shit, and you are already effectively bankrupt, then, boy, I WILL insist you get the hell out of the way and let someone else try to run your business and come up with a way to pay me back.
Nothing to do with capitalism and other ridiculous comments by people posting here who have hardly ever opened a book and know some real history rather than old wives’ tales. Fascism, Socialism comments that betray a complete lack of knowledge on the part of posters here just add to the bewilderment I feel reading this stuff.
Celebrate! Wagoner is gone. Good goddam riddance.
Your president did the exact right thing. Now, lets see if Fritz can write a plan that actually makes sense in the next 60 days, or whether he’s as inept as Wagoner was. If he is, its plain as day — bankruptcy will happen, because no more of your or my taxpayer money will go to prop up this industrial dinosaur.
Well just be careful who you sleep with,this should have been done 4 or 5 years ago if not for the spineless GM board members.If you suck off the Government then you get what you ask for,it will no longer be General Motors,we will now call it Government Motors.All this today is just window dressing for the next round of bailout money that will come in June and look for that to be the big one!The tax payer is far from done on this mess,we will get screwed no matter what we do here.Boy it makes me feel better to have the Government back the warranty’s, who the hell is going to pay for those? the cost of buying a car from one of these Company’s just keeps going up!The answer here for me is just don’t buy from these Companys, period.