Tick, Tick for Rick

[Guest buickman]

Time for Wagoner to Show Why GM Needs Him

Detroit Free Press

Tom Walsh

JUly 4, 2006

If General Motors Corp. CEO Rick Wagoner wants to keep his job and lead GM's revival his way, he needs to show Kirk Kerkorian and Wall Street the light at the end of GM's turnaround tunnel.

Very soon.

And if that means blatantly lifting a page from Carlos Ghosn's turnaround playbook at Nissan Motor Co. -- by setting specific near-term revenue and profit targets and vowing to resign if they are not met -- then Wagoner ought to do it.

Forget all the highfalutin talk about synergies, made in Friday's proposal by Kerkorian's Tracinda Corp., that GM should join forces in a global alliance with Nissan and Renault SA.

What Kerkorian, who owns 9.9% of GM stock, and his adviser Jerry York want to see is a clear plan that forecasts how many cars and trucks GM will sell, and how much profit it expects to make this year and next year and in 2008. That transparency is the natural desire of any investor and would be applauded by most Wall Streeters that trade GM stocks.

If Wagoner won't provide a plan with specific targets, Kerkorian and York believe they know who will -- Ghosn, the chief executive officer of the Renault-Nissan alliance.

Ghosn gets results at Nissan

When Ghosn was dispatched by Renault to save the near-bankrupt Nissan in 1999, he laid out a 3-year revival plan that promised profitability in the first year, plus a 4.5% operating profit and 50% debt reduction within three years. Nissan met all the targets on or ahead of schedule.

In a Jan. 9 speech to automotive analysts in Detroit, shortly before being granted a seat on GM's board of directors, York praised the Nissan revival strategy under Ghosn and urged GM to set similar public targets. GM later implemented some of York's other suggestions, such as cutting the stock dividend and slashing executive pay, but Wagoner has, thus far, refused to publicly set targets for sales and profits, or deadlines for achieving them.

Wagoner has cited uncertainty about the implications of supplier Delphi Corp.'s Chapter 11 bankruptcy, along with GM's related discussions with the UAW about buyouts and health care benefits, as reasons for his reluctance to make financial forecasts.

That's what makes the timing of Kerkorian's Renault-Nissan-GM proposal so interesting.

Wagoner makes some progress

In the wake of last year's staggering $10.6-billion loss, Wagoner and GM's top brass have made impressive progress recently in cutting labor costs at GM, where 35,000 workers are taking buyout offers and the UAW has agreed to cuts in retiree health care. In the first quarter this year, the company posted a $445-million profit following a health care accounting revision. Wagoner also has defused the threat of a crippling strike at Delphi by underwriting the cost for 12,600 Delphi workers to either retire early or flow back to jobs in GM plants. These achievements, plus the pending $14-billion deal to sell 51% of GMAC, have helped boost GM's stock price 51.4% this year, the best percentage gain of the 30 stocks in the Dow Jones industrial average.

But Kerkorian and York aren't handing out gold stars.

Rather, Friday's proposal of the Renault-Nissan-GM alliance was tantamount to saying, "Thanks, Rick, for dealing with the prickly UAW and Delphi situations. But we'd like to bring Carlos in now to help get us over the hump and back to big-time profits. And besides, Wall Street loves Carlos, and he'll be good for our stock price."

Kerkorian and York didn't say directly that they want to replace Wagoner with Ghosn as GM's quarterback. But they certainly didn't propose this deal so that Ghosn could be deployed as a second-string tight end. In whatever form this kooky alliance might take, Wagoner would face an uncertain future.

Frankly, I don't think GM needs Carlos Ghosn or some Franco-American-Japanese corporate stew in order to fix itself.

Wagoner is smart and determined, as he has shown during these past 18 months of nonstop crisis management. Fritz Henderson, GM's new vice chairman, is a plucky dealmaker who won't accept "can't be done" as an answer. Vice Chairman Bob Lutz, the ageless product guru, is as battle-tested as they come.

All that said, Wagoner must face some bitter truths and act accordingly.

• Truth No. 1: Wall Street thinks Ghosn is a better CEO than you, Rick. That's why GM stock jumped $2.35 on Friday at news of a possible GM-Ghosn alliance.

• Truth No. 2: Wall Street -- and much of Main Street USA, unfortunately -- believes that GM's cars and trucks are inferior to foreign-owned competitors'. That's why the resale price of used cars and the residual values of new vehicle leases are lower than those of key competitors.

Nothing short of a totally transparent, bold turnaround plan will change minds on Wall Street, or on Main Street, or in the mischievous minds of Kerkorian and York, who want to keep this pot boiling so GM's stock price doesn't cool off.

Contact TOM WALSH at 313-223-4430 or [email protected].

[Northstar]

June sales as well as other recent months have shown that Ghosn's plan only worked in the short term, and while Nissan may again be profitable, sales are now sinking. Ghosn is not the man for the job at GM; he would try to turn the ship around 180 degrees overnight, and while he might turn a profit, the products would be of poorer quality because they would be rushed to market. If GM is going to turn it around, it has to be under Wagoner. Why? Because, if someone else comes in in the middle of an attempted turnaround and changes everything, it absolutely destroys all of the work that was put in place before, and would essentially mean the turnaround would just begin again. In other words, it would waste a hell of a lot of time, and by the time the new turnaround effort takes place, GM may not be in existence.

[regfootball]

look at nissan, doing the same thing as GM. they had a bunch of all new models 3-4 years ago and now they are prlonging those models with refreshments and such, but they are not all new. Meanwhile, toyota comes to market with a bunch of new cars.

nissan is no gold standard. how old is their product going to be in 3 years?

[wildcat]

Buickman: If you truly care for Buick and GM's survival, you better stop with the "Tick, Tick for Rick" and come down squarely in support of Richard Wagoner. To change the boss at this time is stupid and possibly suicidal. Set aside your personal differences with the man, and recognize that Mr. Wagoner needs to remain in his present position. If you can't rally behind him, then perhaps you should sell some other make of cars. I know it must have been hurtful and insulting if they didn't accept your ideas, after you have been one of their top salesmen. But let it go! Right now, judging by the headlines, GM and, evidently, Wagoner are fighting for their survival - against Kerkorian, Ghosn, certain members of the press, and some analysts. GM will never "return to greatness," to use your phrase, if you continue to flood this and other websites with your vendetta against Wagoner in full public view. I'm not saying you have to agree with everything he does ( I don't ) or like every vehicle GM sells ( I don't ), just see the bigger picture at the moment. Edited July 5, 2006 by wildcat

[DetroitNut90]

Buickman: If you truly care for Buick and GM's survival, you better stop with the "Tick, Tick for Rick" come down squarely in support of Richard Wagoner.  To change the boss at this time is stupid and possibly suicidal.  Set aside your personal differences with the man, and recognize that Mr. Wagoner needs to remain in his present position.  If you can't rally behind him, then perhaps you should sell some other make of cars.

Agree 100%

[Drew Dowdell]

GM is steaming in the right direction. It takes a long time to turn the Titanic..... but Buickman is still out there paddling the other way.

[evok]

GM is steaming in the right direction. It takes a long time to turn the Titanic..... but Buickman is still out there paddling the other way.

LOL -

I want Red Ink Rick fired - Yeaaaaaaaaa

[97regalGS]

GM is steaming in the right direction. It takes a long time to turn the Titanic..... but Buickman is still out there paddling the other way.

that was Buickman?? I thought that was Leonardo diCaprio.

by the way, referring to GM as the Titanic, perhaps not the greatest metaphor.

of course, if we implemented the Return to Greatness it would be Poseidon.

[BigPontiac]

Interesting how "shareholders" were questioning Wagner's ability to be both Chairman and CEO at GM...but no one questions Ghosn's ability to be the CEO of Nissan, Renault AND GM??? Get a grip!

I also know a lot of "former Nissan owners" since Carlos took over...he also seems to not comprehend that management is a team sport...moving the Nissan HQ from CA to TN will likely cost them dearly and negate most of the cost reduction...

[Guest buickman]

that was Buickman??  I thought that was Leonardo diCaprio.

by the way, referring to GM as the Titanic, perhaps not the greatest metaphor.

of course, if we implemented the Return to Greatness it would be Poseidon.

<{POST_SNAPBACK}>

Well then, call me Neptune.

[Ghost Dog]

I'm not sure equating GM to the Titanic is a good thing. I sort of remember the Titanic being slightly ill fated.

[97regalGS]

Well then, call me Neptune.

how about we just call you a taxi.

[Cadillacfan]

This thread should be renamed “Tick, Tick for Buickman”. It is time for you to go. Even though I blocked your posts, you have still managed to disrupt the entire website.

For someone with all your "expertise", one would assume you would have the maturity level of an adult. Sadly, you are acting more like a child with all these threads you have created to show us how much you dislike Rick Wagoner. We get it. You think you are better then him. Great. Then why are you still here posting here? A person with all your “valuable knowledge” should not have so much time on their hands.

The fact that I am even posting on this thread means that you got the attention you wanted.

However, I am not really calling out to you but to the Mods on this site. It is time to get rid of Buickman once and for all.

[Guest YellowJacket894]

Well, there's a problem. See, friends and neighbors, Nissan is a small fish when you compare it to GM. With Nissan Motor Corp. you have two branches of the company to deal with: the Nissan brand and Infiniti. With GM you have Chevrolet, Pontiac, Buick, GMC, Hummer, Saab, Saturn/Opel/Vauxhall, and Cadillac. Not to mention you have the Daewoo branch to work with so you have a steady flow of products for Chevy's EurAsian branch and Suzuki. It's much easier to oversee Nissan's two to GM's nine or so. It'll take much longer for GM to do the same move as Nissan did.

[Camino LS6]

Despite all of the blather in this thread, that article is well-written and seems to take a balanced view of the situation.

Too bad the thread title bangs the same tired old drum. We might have had a good discussion about what was actually written in the piece had that not been the case.

I don't give a rat's ass who is "right" but I do care about the quality of the discussions on this site.

No more: from any quarter please.

And leave the agenda at home.

[regfootball]

Interesting how "shareholders" were questioning Wagner's ability to be both Chairman and CEO at GM...but no one questions Ghosn's ability to be the CEO of Nissan, Renault AND GM???  Get a grip!

I also know a lot of "former Nissan owners" since Carlos took over...he also seems to not comprehend that management is a team sport...moving the Nissan HQ from CA to TN will likely cost them dearly and negate most of the cost reduction...

I don't think I'd be letting any 'Carlos' run GM, If it were me.....

[regfootball]

Ask any employee within the past 5 years of Nissan USA what they think of Ghosn

[SouthHavenSal]

Well then, call me Neptune.

A question for Buickman...

In the Devil's Handmaiden editorial on the GeneralWatch website you reference that "He is without doubt the worst sort of corporate criminal, personally responsible for the suffering of thousands across the US"

http://www.generalwatch.com/editorials/edi...al.cfm?EdID=113

Were you referencing the current Rick Wagoner or Carlos Ghosn three years from now?

The reason why I ask, is that you have been clamoring for the removal of, the self proclaimed, "The Rick" and you may get Ghosn in his place. Do you feel that Ghosn will give a Rat's Patoot about Flint, or Michigan or anyone in the rust belt? Are you aware of Ghosn’s (and Kerkorian’s) track record? His main priority will be to ship as many $$$ to Rodeo Drive, Paris & Tokyo as possible. If he happens to sacrifice a few thousand American middle class families in the process, so be it. Are you comfortable with this new solution? Just curious?

Be careful what you wish for, you just may get it.

[Guest buickman]

A question for Buickman...

In the Devil's Handmaiden editorial on the GeneralWatch website you reference that "He is without doubt the worst sort of corporate criminal, personally responsible for the suffering of thousands across the US" 

http://www.generalwatch.com/editorials/edi...al.cfm?EdID=113

Were you referencing the current Rick Wagoner or Carlos Ghosn three years from now? 

The reason why I ask, is that you have been clamoring for the removal of, the self proclaimed, "The Rick" and you may get Ghosn in his place.  Do you feel that Ghosn will give a Rat's Patoot about Flint, or Michigan or anyone in the rust belt?  Are you aware of Ghosn’s (and Kerkorian’s) track record? His main priority will be to ship as many $$$ to Rodeo Drive, Paris & Tokyo as possible.  If he happens to sacrifice a few thousand American middle class families in the process, so be it.  Are you comfortable with this new solution?  Just curious? 

Be careful what you wish for, you just may get it.

<{POST_SNAPBACK}>

Good question. Kerkorian has every right to buy as much GM stock as is available on the market. If doing so allows him to gain control of the company, then so be it. Ghosn on the other hand can only hope to rise in power if the Board accepts Kerkorian's plan, which is doubtful. Really it is my feeling that the banks are behind this and are the ones who will benefit the most. Remember how ATT was broken apart, then put back together?

From today's Detroit News:

In addition, GM's outside investment banks are also helping to compile data on Renault-Nissan in advance of Friday's board meeting.

"It's not unusual that we would ask our bank advisers to help gather facts and provide analysis when you're looking at such a complicated transaction," said GM official Toni Simonetti.

Why would GM need banks to interpret the situation? Aren't we in the auto business? Why do we have so many lawyers and accountants on the payroll? Look at the paperwork everytime we spin off or sell something. Hundereds of millions paid to banks for what? Advice? C'mon.

Personally, I'd like to see Fritz Henderson put in charge immediately and get down to the matters involved in actually running an automobile company.

Buickman

[regfootball]

Really it is my feeling that the banks are behind this and are the ones who will benefit the most.

BINGO!!!! YOU ARE CORRECT SIR!