Rick Wagoner will step down
#1
03-29-2009, 11:11 PM
Rick Wagoner will step down
Quote:
GM chief to step down
TOM KRISHER AND KEN THOMAS
ASSOCIATED PRESS
Mar 29, 2009
DETROIT–General Motors Corp. Chairman and CEO Rick Wagoner will step down immediately at the request of the White House, administration officials said Sunday. The news comes as President Obama prepares to unveil additional restructuring efforts designed to save the domestic auto industry.
The officials asked not to be identified because details of the restructuring plan have not yet been made public. On Monday, Obama is to announce plans to restructure GM and Chrysler LLC in exchange for additional government loans. The companies have been living on $17.4 billion (U.S.) in government aid and have requested $21.6 billion more.
Wagoner's departure indicates that more management changes may be part of the deal. Wagoner, 56, has repeatedly said he felt it was better for the company if he led it through the crisis, but he has faced sharp criticism on Capitol Hill for what many lawmakers regard as years of missteps, mistakes and arrogance by the Big Three automakers.
Wagoner joined GM in 1977, serving in several capacities in the U.S., Brazil and Europe. He became president and chief executive in 2000 and has served as chairman and CEO since May 2003.
Obama said Sunday that GM and Chrysler and all those with a stake in their survival need to take more hard steps to help the struggling automakers restructure for the future. In an interview with CBS' Face the Nation broadcast Sunday, Obama said the companies must do more to receive additional financial aid from the government.
"They're not there yet," he said.
A person familiar with Obama's plans said last week they would go deeper than what the Bush administration demanded when it approved the initial loans last year.
Wagoner, in an interview with the Associated Press in December, had declined to speculate on suggestions from some members of Congress that GM's leadership team should step down as part of any rescue package.
"I'm doing what I do because it adds a lot of value to the company," Wagoner said in a Dec. 4 interview as GM sought federal aid from the Bush administration. "It's not clear to me that experience in this industry should be viewed as a negative but I'm going to do what's right for the company and I'll do it in consultation with the (GM) board (of directors)."
Wagoner has been credited by auto industry analysts with doing more to restructure the giant, bureaucratic automaker than any other executive. But given that he has been at GM's helm for so long, many of his critics say he moved far too slowly to take on the United Auto Workers and shrink the company as its market share tumbled.
While GM has improved its cars in the last two years, critics say the company relied for too long on sales of pickup trucks and sport utility vehicles for its profits and was unprepared for a drastic market shift when gasoline prices hit $4 per gallon last year.
During the Congressional debate over whether to give GM and Chrysler loans last year, many lawmakers criticized Wagoner, including Sen. Chris Dodd, D-Conn., chairman of the Banking Committee.
He accused automakers' top management of having a "head-in-the-sand" approach to problems and said Wagoner "has to move on" as part of a government-run restructuring that should be a condition of financial life support for the auto industry.
Quote:
March 29, 2009
Obama forces Wagoner out as GM chairman; end of a 31-year career
By JUSTIN HYDE and TIM HIGGINS
FREE PRESS BUSINESS WRITERS
President Barack Obama's rescue plan for Detroit automakers will be unveiled Monday, but one condition became clear today: the resignation of General Motors Corp. Chairman and Chief Executive Rick Wagoner.
As a condition for additional government aid to GM, the Obama administration asked Wagoner to step aside, which Wagoner agreed to do today, people familiar with the plan said. Wagoner’s move, effective immediately, ends a 31-year career with GM.
Not since President Franklin Roosevelt considered taking control of Ford Motor Co. in 1943 from a failing Henry Ford has the federal government pushed for such sway in the management of Detroit’s automakers.
The tack suggests a hard-nosed approach from the Obama administration toward the automakers, bondholders and the UAW, all of whom have yet to reach agreements on key concessions, despite months of talks.
Obama will unveil the new rescue plan for GM and Chrysler in a White House ceremony this morning.
It was not clear who would replace Wagoner; chief operating officer Fritz Henderson would appear to be the most likely candidate. GM declined to comment.
A tumultuous 31-year career ends
“It’s time to stop whining and play the game.”
That was Wagoner six years ago, laying out a vision of a booming market for GM’s vehicles around the world and defending an aggressive campaign of rebates that spurred GM’s sales.
But his resignation on Sunday put an abrupt close to his 31-year career with the automaker.
Even though Wagoner had overseen a company that’s lost $82 billion over the past four years, he had faced few serious challenges to his leadership, the exception being a drive in 2006 by billionaire investor Kirk Kerkorian for an alliance with Renault-Nissan than Wagoner blunted.
“I’m disappointed but not surprised,” said David Cole, chairman of the Center for Automotive Research. “One of the things we recognize is that any kind of aid for industry, whether it is the financial or the auto industry, is quite politically unpopular. If you are in the government’s position, you need to be able to show the heads that have come from this.”
News of Wagoner’s departure caught many in Detroit off guard, especially after his determination to stay in office despite what seemed like continuous pressure from some corners of Wall Street and Washington to step down.
Asked about the development late Sunday, one top GM executive confided: “You know as much as we do.”
The change comes as GM is undergoing sweeping restructuring efforts, which include cutting 47,000 jobs by the end of the year, scaling back its dealer network by about 25% by 2012 and eliminating brands and models.
“I’m not necessarily sure it’s the best idea” for Wagoner to leave now, said Aaron Bragman, an industry analyst from IHS Global Insight. “You’re changing captains in the middle of the rapids here.”
It wasn’t clear today who would replace Wagoner, or why the government had asked him to leave. The most obvious candidate to step into his roles would be Chief Operating Officer Fritz Henderson, with Chief Financial Officer Ray Young also possibly moving up.
The news sent new rounds of anxiety through the workforce. GM hourly worker Randy Halazon, 51, of Vassar, near Flint, has spent a combined 31 years at GM and the automaker’s parts spinoff Delphi. He said he is more concerned than ever about the GM’s future, fearing the change in leadership might mean a greater likelihood of bankruptcy.
“I think it would be a bad deal,” Halazon said.
While Wagoner will likely be remembered as the CEO at the helm when GM required at least $13.4 billion in government aid to stay alive, some of successes under his watch include development of the Chevrolet Volt, an electric-drive vehicle slated for the market in late 2010, and a renewed partnership with the UAW that brought about a 2007 labor agreement that significantly changed the company’s cost structure.
Early in his tenure as chief executive, Wagoner outlined a strategy for GM to focus on developing countries where the auto industry still had large potential growth, such as Brazil, Russia and China. By 2005, GM was selling more vehicles overseas than in North America and GM was the No. 1 car company in China, with the Buick brand in China outselling its U.S. base.
But Wagoner could never halt the steady decline of GM’s market share in the United States, fueled by rising foreign competition and GM’s higher costs, which eventually allowed Toyota Motor Co. to surpass GM as the world’s largest automaker last year.
When he took over as chief of GM North America in 1994, the company held 33% of the U.S. market. Last year, GM’s sales fell to 22% of the market.
The declining market share foretold of GM’s bleak future. The company last made money on an annual basis in 2004, and recorded a $38.7 billion loss in 2007.
Wagoner’s friends and associates always described him as a naturally friendly man who could summon the edge needed to run an enterprise the size of GM when necessary. He only rarely showed emotion in public; once cursing a writer for a Los Angeles newspaper who had written that Wagoner did not like the Pontiac Aztek.
The Aztek debacle in 2000 became a touchstone for Wagoner’s tenure, and the off-base vehicles that GM was building earlier in his career. While Wagoner defended the vehicle and the GM process that created it, he also went looking for someone to rework the company’s product line.
The search ended when Wagoner hired former Chrysler executive Bob Lutz out of retirement in 2002. Lutz eventually succeeded in giving design a higher priority, generating models such as the Chevrolet Malibu that were competitive with the top Japanese models.
Several industry observers today said Wagoner would do what he thought was best for the company – including stepping down if needed. Duane Paddock, a New York Chevrolet dealer who is the co-chair of GM’s national dealer council, said he believed Wagoner could have fixed the company.
“But if his decision, for whatever reason, is to move on then I feel he is making the decision because it’s the right decision for the long-term viability for General Motors,” he said.
Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com. Free Press writer Jewel Gopwani contributed.
What does everyone think?
I think, its about damn time! Ever since he became CEO in 03 GM has been going down. I hope they axe so more of the high up guys in GM. There is no reason a CEO should make millions while the company he is in charge of is loosing billions. I'm sure its not all his fault but he had a big part of it. Bob Lutz can take a hike too while their getting rid of poeple.
Samething should happen with Ford and Chrysler, no reason the big three in the US should be in trouble. I wish I was a CEO, then I could run a great company into the ground and get hundreds of thousands of dollars in bonuses.
GM chief to step down
TOM KRISHER AND KEN THOMAS
ASSOCIATED PRESS
Mar 29, 2009
DETROIT–General Motors Corp. Chairman and CEO Rick Wagoner will step down immediately at the request of the White House, administration officials said Sunday. The news comes as President Obama prepares to unveil additional restructuring efforts designed to save the domestic auto industry.
The officials asked not to be identified because details of the restructuring plan have not yet been made public. On Monday, Obama is to announce plans to restructure GM and Chrysler LLC in exchange for additional government loans. The companies have been living on $17.4 billion (U.S.) in government aid and have requested $21.6 billion more.
Wagoner's departure indicates that more management changes may be part of the deal. Wagoner, 56, has repeatedly said he felt it was better for the company if he led it through the crisis, but he has faced sharp criticism on Capitol Hill for what many lawmakers regard as years of missteps, mistakes and arrogance by the Big Three automakers.
Wagoner joined GM in 1977, serving in several capacities in the U.S., Brazil and Europe. He became president and chief executive in 2000 and has served as chairman and CEO since May 2003.
Obama said Sunday that GM and Chrysler and all those with a stake in their survival need to take more hard steps to help the struggling automakers restructure for the future. In an interview with CBS' Face the Nation broadcast Sunday, Obama said the companies must do more to receive additional financial aid from the government.
"They're not there yet," he said.
A person familiar with Obama's plans said last week they would go deeper than what the Bush administration demanded when it approved the initial loans last year.
Wagoner, in an interview with the Associated Press in December, had declined to speculate on suggestions from some members of Congress that GM's leadership team should step down as part of any rescue package.
"I'm doing what I do because it adds a lot of value to the company," Wagoner said in a Dec. 4 interview as GM sought federal aid from the Bush administration. "It's not clear to me that experience in this industry should be viewed as a negative but I'm going to do what's right for the company and I'll do it in consultation with the (GM) board (of directors)."
Wagoner has been credited by auto industry analysts with doing more to restructure the giant, bureaucratic automaker than any other executive. But given that he has been at GM's helm for so long, many of his critics say he moved far too slowly to take on the United Auto Workers and shrink the company as its market share tumbled.
While GM has improved its cars in the last two years, critics say the company relied for too long on sales of pickup trucks and sport utility vehicles for its profits and was unprepared for a drastic market shift when gasoline prices hit $4 per gallon last year.
During the Congressional debate over whether to give GM and Chrysler loans last year, many lawmakers criticized Wagoner, including Sen. Chris Dodd, D-Conn., chairman of the Banking Committee.
He accused automakers' top management of having a "head-in-the-sand" approach to problems and said Wagoner "has to move on" as part of a government-run restructuring that should be a condition of financial life support for the auto industry.
Quote:
March 29, 2009
Obama forces Wagoner out as GM chairman; end of a 31-year career
By JUSTIN HYDE and TIM HIGGINS
FREE PRESS BUSINESS WRITERS
President Barack Obama's rescue plan for Detroit automakers will be unveiled Monday, but one condition became clear today: the resignation of General Motors Corp. Chairman and Chief Executive Rick Wagoner.
As a condition for additional government aid to GM, the Obama administration asked Wagoner to step aside, which Wagoner agreed to do today, people familiar with the plan said. Wagoner’s move, effective immediately, ends a 31-year career with GM.
Not since President Franklin Roosevelt considered taking control of Ford Motor Co. in 1943 from a failing Henry Ford has the federal government pushed for such sway in the management of Detroit’s automakers.
The tack suggests a hard-nosed approach from the Obama administration toward the automakers, bondholders and the UAW, all of whom have yet to reach agreements on key concessions, despite months of talks.
Obama will unveil the new rescue plan for GM and Chrysler in a White House ceremony this morning.
It was not clear who would replace Wagoner; chief operating officer Fritz Henderson would appear to be the most likely candidate. GM declined to comment.
A tumultuous 31-year career ends
“It’s time to stop whining and play the game.”
That was Wagoner six years ago, laying out a vision of a booming market for GM’s vehicles around the world and defending an aggressive campaign of rebates that spurred GM’s sales.
But his resignation on Sunday put an abrupt close to his 31-year career with the automaker.
Even though Wagoner had overseen a company that’s lost $82 billion over the past four years, he had faced few serious challenges to his leadership, the exception being a drive in 2006 by billionaire investor Kirk Kerkorian for an alliance with Renault-Nissan than Wagoner blunted.
“I’m disappointed but not surprised,” said David Cole, chairman of the Center for Automotive Research. “One of the things we recognize is that any kind of aid for industry, whether it is the financial or the auto industry, is quite politically unpopular. If you are in the government’s position, you need to be able to show the heads that have come from this.”
News of Wagoner’s departure caught many in Detroit off guard, especially after his determination to stay in office despite what seemed like continuous pressure from some corners of Wall Street and Washington to step down.
Asked about the development late Sunday, one top GM executive confided: “You know as much as we do.”
The change comes as GM is undergoing sweeping restructuring efforts, which include cutting 47,000 jobs by the end of the year, scaling back its dealer network by about 25% by 2012 and eliminating brands and models.
“I’m not necessarily sure it’s the best idea” for Wagoner to leave now, said Aaron Bragman, an industry analyst from IHS Global Insight. “You’re changing captains in the middle of the rapids here.”
It wasn’t clear today who would replace Wagoner, or why the government had asked him to leave. The most obvious candidate to step into his roles would be Chief Operating Officer Fritz Henderson, with Chief Financial Officer Ray Young also possibly moving up.
The news sent new rounds of anxiety through the workforce. GM hourly worker Randy Halazon, 51, of Vassar, near Flint, has spent a combined 31 years at GM and the automaker’s parts spinoff Delphi. He said he is more concerned than ever about the GM’s future, fearing the change in leadership might mean a greater likelihood of bankruptcy.
“I think it would be a bad deal,” Halazon said.
While Wagoner will likely be remembered as the CEO at the helm when GM required at least $13.4 billion in government aid to stay alive, some of successes under his watch include development of the Chevrolet Volt, an electric-drive vehicle slated for the market in late 2010, and a renewed partnership with the UAW that brought about a 2007 labor agreement that significantly changed the company’s cost structure.
Early in his tenure as chief executive, Wagoner outlined a strategy for GM to focus on developing countries where the auto industry still had large potential growth, such as Brazil, Russia and China. By 2005, GM was selling more vehicles overseas than in North America and GM was the No. 1 car company in China, with the Buick brand in China outselling its U.S. base.
But Wagoner could never halt the steady decline of GM’s market share in the United States, fueled by rising foreign competition and GM’s higher costs, which eventually allowed Toyota Motor Co. to surpass GM as the world’s largest automaker last year.
When he took over as chief of GM North America in 1994, the company held 33% of the U.S. market. Last year, GM’s sales fell to 22% of the market.
The declining market share foretold of GM’s bleak future. The company last made money on an annual basis in 2004, and recorded a $38.7 billion loss in 2007.
Wagoner’s friends and associates always described him as a naturally friendly man who could summon the edge needed to run an enterprise the size of GM when necessary. He only rarely showed emotion in public; once cursing a writer for a Los Angeles newspaper who had written that Wagoner did not like the Pontiac Aztek.
The Aztek debacle in 2000 became a touchstone for Wagoner’s tenure, and the off-base vehicles that GM was building earlier in his career. While Wagoner defended the vehicle and the GM process that created it, he also went looking for someone to rework the company’s product line.
The search ended when Wagoner hired former Chrysler executive Bob Lutz out of retirement in 2002. Lutz eventually succeeded in giving design a higher priority, generating models such as the Chevrolet Malibu that were competitive with the top Japanese models.
Several industry observers today said Wagoner would do what he thought was best for the company – including stepping down if needed. Duane Paddock, a New York Chevrolet dealer who is the co-chair of GM’s national dealer council, said he believed Wagoner could have fixed the company.
“But if his decision, for whatever reason, is to move on then I feel he is making the decision because it’s the right decision for the long-term viability for General Motors,” he said.
Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com. Free Press writer Jewel Gopwani contributed.
What does everyone think?
I think, its about damn time! Ever since he became CEO in 03 GM has been going down. I hope they axe so more of the high up guys in GM. There is no reason a CEO should make millions while the company he is in charge of is loosing billions. I'm sure its not all his fault but he had a big part of it. Bob Lutz can take a hike too while their getting rid of poeple.
Samething should happen with Ford and Chrysler, no reason the big three in the US should be in trouble. I wish I was a CEO, then I could run a great company into the ground and get hundreds of thousands of dollars in bonuses.
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