Goodbye Rick Wagoner
So yesterday Rick Wagoner agreed to leave GM as the CEO after the Federal government asked him to do so. Here is the article from the Detroit Free Press.
Rick Wagoner was done in as General Motors Corp.’s head coach by a fatal combination of politics, bad breaks and ultimately, the simple math that gets most coaches fired — his team lost more than it won in his eight years at the helm.
GM has lost $82 billion since 2004.
Its share of the U.S. car and truck market has shrunk steadily.
And ultimately, when GM’s survival was on the line and the Big Banker himself, President Barack Obama, had to decide whether to keep federal loans flowing to GM, the Big Banker didn’t find Wagoner’s track record reassuring enough.
So Wagoner has to go.
“He’s a good man and it’s an unfortunate ending,” said Matt Cullen, former director of GM’s global real estate operations who left GM a year ago to head Rock Holdings, a unit of Dan Gilbert’s mortgage and sports-related enterprises. “In the end, Rick put GM and its people ahead of himself, which is what he’s always done.”
Wagoner has been assailed by critics through much of his tenure at GM, and has survived repeated calls for his head from Wall Street and media pundits. He warded off a 2006 attempt by billionaire investor Kirk Kerkorian to push GM into an alliance with automakers Nissan and Renault. On several occasions in recent years, GM has offered journalists selective interviews with GM board members who said they still had faith in Wagoner.
But as the Tuesday deadline approached for Obama and his auto industry task force to decide whether GM and Chrysler look viable enough to merit further federal loan support, Wagoner’s future began to look shakier and shakier.
Obama, in several recent interviews about the auto industry, seemed to go out of his way to point out past mistakes of GM and other Detroit-based automakers, even as he expressed a desire to keep them alive and avert bankruptcy.
In other words, he was conveying hope for GM laced with skepticism about its leadership.
The timing was terrible for Wagoner, too, thanks to the AIG debacle.
Obama and Treasury Secretary Timothy Geithner appeared to be caught somewhat flat-footed by the outpouring of outrage about the bonuses of AIG executives. So even though Wagoner was working for nothing this year, and Detroit auto industry executive pay is has been nowhere near as excessive as Wall Street’s, Wagoner is partly a victim of populist rage at the CEO class.
One reason Wagoner has lasted this long in the CEO chair is that there has been no obvious successor to take his placeat the head of a complex global entity. GM has been doing many things right, from improving its product line to reducing costs, and there’s no reason to believe that GM President Fritz Henderson will chart a radically different course from Wagoner’s.
Wagoner himself has chafed a bit at GM’s critics, at one point telling me in 2006, “We’ve got smart people here. We all finished at the top of our class, too.”
In the end, though, it doesn’t matter what grades you got or how nice a guy you’ve been.
When you’re the leader of the team, you’re judged by your victories you put on the board. GM just hasn’t performed.