General Motors Chief Rick Wagoner Said to Step Down

[turbo200]

The better move would have been goverment support to make many of the sweeping changes needed to fix GM's problems and they block they face fixing the way they have to do buisness.

Many of the things with labor and dealers are not able to be address due to goverment rules and regulations.

Shall we walk the dogs and use the pooper scooper too?

I favor GM as much as the next guy, but they gave up responsibility the day decades of inept decision making caught up with them and they came running to the gov't purse. by the way the majority elected obama, we gave him the right to make these calls, for better or worse. the time for turmoil officially ended when gm came running for money. they gave up independence, now the gov't gets to make the call.

[Drew Dowdell]

If you don't understand the definition of partisan hackery. Stay out of the thread.

[Camino LS6]

I am a bit more nuetral, both in how I feel about this and the political aspects.

Which, by the way, do matter in this situation.

I see two potential reasons for this move:

1) Obama requested/demanded it

2) GM did it to blunt the impact of such a demand, a pre-emptive strike if you will.

Truly, we all know that the current crisis has little to do with management.

[Robert Hall]

I am a bit more nuetral, both in how I feel about this and the political aspects

Truly, we all know that the current crisis has little to do with management.

How can management not be a significant part of GM's current crisis? Decades of mismanagement got them where they are today, going back to Roger Smith & co. From 35% market share in '90 to 18% today says they aren't building the cars that the buyers want..that is 20 years of mismanagement of the direction of the company..bad choices on products, bad choices on union agreements, etc. Not to lay all the blame on Wagoner, but he is part of the problem...look how market share and stock prices have tanked during his years at the helm. Someone has to go down for this, and as would be expected in any business, the CEO has to go when it's been this bad for so long.

Edited March 30, 2009 by moltar

[Intrepidation]

Exactly moltar, while the economic conditions aren't GMs fault, their blunders over the past 2-3 decades are all their doing.

[Camino LS6]

How can management not be a significant part of GM's current crisis? Decades of mismanagement got them where they are today, going back to Roger Smith & co. From 35% market share in '90 to 18% today says they aren't building the cars that the buyers want..that is 20 years of mismanagement of the direction of the company..bad choices on products, bad choices on union agreements, etc.

Well, all of those things existed before the crisis, in fact, before Wagoner.

That's my point, nothing more.

To lay it all at his feet alone would be absurd.

He is a sacrificial lamb (if not an innocent one).

When the mob calls for blood, the expedient thing is to give it to them.

[Justin Bimmer]

Ok guys, time to take off your tinfoil hats.

Looks like it's going to be GM COO Fritz Henderson

Before reading any of the stuff I thought to myself. . . SELF, we have seen a lot of Fritz Henderson on TV. It looks to me like he is posturing for the CEO position. Wow SELF, Rich W. is finally going to leave after a decade of basically not making one red cent in profits. It looks like the COO would be the ideal replacement.

It would be lovely to have somebody like Iaccoca or Penske, but they would just be short-term solutions to a long term problem. GM is a lot like a school district here in my hometown. Too much oversight that is not ONSITE. People need to get back in touch with what is going on in the trenches, not whats happening on the 14th floor (or an ivory tower like the school district.) The biggest mistake this school district made was hiring outside of the "company" and GM doesn't need this right now. Too much learning curve to do that with not enough time. Your outsiders that look into the company are the Board of Directors, they should not be a rubber stamp, just like a School Board should not be a rubber stamp.

[daves87rs]

Well, this is going to be interesting....

More surprises on the way...

[bring_BUICK_back]

Now is the time for Bob Lutz to go also.

[Drew Dowdell]

I just got off the phone with President Obama. Looks like I'm going to be the new CEO of General Motors since he's so impressed with how I turned around C&G's finances.

[vonVeezelsnider]

I just got off the phone with President Obama. Looks like I'm going to be the new CEO of General Motors since he's so impressed with how I turned around C&G's finances.

Patronage Appts?

[Z-06]

I just got off the phone with President Obama. Looks like I'm going to be the new CEO of General Motors since he's so impressed with how I turned around C&G's finances.

Need help in the products engineering department?

[Chris_Doane]

Now is the time for Bob Lutz to go also.

You may have missed an automotive news story or two during the last few months....

[daves87rs]

Need help in the products engineering department?

Me too! :sign0200:

[Croc]

1 you underestimate the Goverments abilities with a company in need of money. Wait for Obamas other demads and see if you still thing they do not have a upper hand.

No more power than a standard bank has in approving/denying loans. If the administration says "No money if this guy is in charge" then GM has a choice in accepting the money with those conditions, looking elsewhere for funding (good luck with that ), or filing for bankruptcy.

2 There is plenty of incompetence in GM but much of it was there before Rick and at this point there is still much that needs to change but it is better now than under past leaders.

How is it better? Because not ALL of the cars are in the POS category? Financially, GM is in pretty bad shape. Businesses do not exist to make superior product, but to make money.

3 You underestimate Rick. He may have made mistakes but he has done more right than many of the past 6 leaders combined.

How in the hell am I underestimating him? He has a pretty impressive record of bad decisions, failures to capitalize, failures to react to changing market conditions, and a legacy of "too little, too late." The only thing he could be lauded on is saying "hey, I'm incompetent at product planning, so I'm going to make Bob Lutz the 'car czar'!"

4 Even if GM brought in Alan Mullaly things would not be much better. Fords problems were much smaller than GM. Ford is a much smaller company with less problems, brands and products to rehash. Besides the biggest problem Ford has always had was some one names Ford running the company. After Henry came out with the Model T only Edsel Ford I did anything to benifit Ford Motor company and then he dies before he really could do much to help them.

Ford only recently has fewer brands. GM's had the same problems for 30 years, and it's a problem with mentality, not much else. Lutz brought in some change, but he could not effect organizational change in his capacity. GM needs an outsider who will be able to look at things with fresh eyes and make the necessary organizational changes.

GM is a large corperate comapny where Ford is mostly a large Family buisness. A lot less internal poltics involved.

Not really in agreement on this at all. Ford is multinational, just like GM. Ford has simply been successful at building a cohesive, unified company, while GM still, through its organizational structure, allows infighting to exist.

[Croc]

Hopefully a temp move until GM can attract someone who isn't old-school GM, like Ford did when they got Mulally.

Likes this.

[gm4life]

I just got off the phone with President Obama. Looks like I'm going to be the new CEO of General Motors since he's so impressed with how I turned around C&G's finances.

That'd be fine with me, seen as you wouldn't kill any fun or RWD cars. Also I know you'd plus and bring back the 4.5L diesel V8 and push diesel motors in general which would be good for GM.

[K.C.]

My question. Since Henderson is coming in, will be be the puppet and Obama the puppet master in an automotive puppet regime?

[Camino LS6]

We shall see.

[Drew Dowdell]

That'd be fine with me, seen as you wouldn't kill any fun or RWD cars. Also I know you'd plus and bring back the 4.5L diesel V8 and push diesel motors in general which would be good for GM.

Can you say full Sigma/Zeta/Alpha/Kappa line up? Yes... I knew you could.

[Blake Noble]

What should have happened a long time ago: Wagoner stepping down.

What shouldn't have happened now: Henderson stepping up. This isn't change for the greater good for the company. This is a very redundant decision. A lifer should not have top chair at GM; we all know what that's brought us.

[Oracle of Delphi]

You may have missed an automotive news story or two during the last few months....

[Oracle of Delphi]

Well, all of those things existed before the crisis, in fact, before Wagoner.

That's my point, nothing more.

To lay it all at his feet alone would be absurd.

He is a sacrificial lamb (if not an innocent one).

When the mob calls for blood, the expedient thing is to give it to them.

Give Us Barabbas ... Just in time for Easter too ...

[Z-06]

That'd be fine with me, seen as you wouldn't kill any fun or RWD cars. Also I know you'd plus and bring back the 4.5L diesel V8 and push diesel motors in general which would be good for GM.

I am going to be the product engineering guru. Just say that all cars will be RWD from the Ultra Luxury Cadillac to Aveo and future Spark replacement . For wusses there will be AWD capability. And yes some cars will not have B Pillarz.

Engines will all be DI with twin turbos wherever possible. Small Blocks will also be thoroughly updated with DI and latest technologies. Diesels will be available in all vehicles. I will hire dwightlooi to take over engine and drivetrain portfolio. Volt will proliferate into every category as possible. Honda, BMW, Lexus and others will follow GM rather than lead it in technology.

Engineering wise with help of Dave I will put EXCITEMENT!!!!!!!!!! back not only in one brand but also in all GM brands.

I will leave up to Oldsmoboi the decision regarding which brand to kill.

[Brougham-Holiday]

I seem to remember PCS telling us about 6 months ago that things were about to get interesting. Looking back at the last 6 months leading up to today, I think we can say you called it Sir.

[evok]

I am a bit more nuetral, both in how I feel about this and the political aspects.

Which, by the way, do matter in this situation.

I see two potential reasons for this move:

1) Obama requested/demanded it

2) GM did it to blunt the impact of such a demand, a pre-emptive strike if you will.

Truly, we all know that the current crisis has little to do with management.

Given all of GM's historic problems over the past 30 years, Wagoner has done the most out of any CEO during that period to address GM's structural problems and actually came within about 12 months of turning this company around before the rug was pulled out.

I give Wagoner the credit he deserves. Too bad the guy who pulled the plug on Wagoner's career has less weeks of executive experience than Wagoner has years.

Obama, Geitner and Rahm are afraid of another AIG fiasco like last week. Yet, GM's big bondholders are likely holding out of swaping debt for equity per the Bush viability requirements because they hold Credit Default Swap (Insurance) backed by AIG and if GM goes bankrupt they will get their money back from AIG - aka the US government.

Either way, Fritz will likely will be given the job and that is not a bad thing.

[ShadowDog]

It's also a good move for marketing if consumers take this as a decision to turn the company around. When the head guy gets the sack, confidence in applying alternate or previously ignored plans is bolstered.

[daves87rs]

I seem to remember PCS telling us about 6 months ago that things were about to get interesting. Looking back at the last 6 months leading up to today, I think we can say you called it Sir.

Yep.

[BigPontiac]

Link to Article

U.S. autos task force rejects GM, Chrysler plans

Reuters

WASHINGTON (Reuters) – The Obama administration autos task force on Monday rejected the turnaround plans of General Motors Corp and Chrysler LLC and warned both could be put through bankruptcy to slash debts.

The announcement by the White House autos panel headed by former investment banker Steve Rattner marked a stunning reversal for management at both automakers and for GM investors and creditors who had bet on a softer line.

"We have unfortunately concluded that neither plan submitted by either company represents viability and therefore does not warrant the substantial additional investments that they requested," said a senior administration official, who asked not to be named.

Instead of granting GM's request for up to $30 billion in loans, the administration only pledged to fund GM's operations for the next 60 days while the top U.S. automaker develops an even more sweeping restructuring plan under new leadership.

GM CEO Rick Wagoner, who met on Friday with the task force, was forced out on Sunday at the request of Rattner, an official said. U.S. officials said plans were also underway to replace most of GM's directors in the coming months.

(Reporting by Kevin Krolicki and John Crawley; Editing by Lincoln Feast)

[gm4life]

My question. Since Henderson is coming in, will be be the puppet and Obama the puppet master in an automotive puppet regime?

Dear Lord lets hope not, because you can kiss any fun cars or V8 powered cars good-bye, hybrids for everyone.

[Oracle of Delphi]

Y'all do know old Fritz boy was hand picked by Wagoner don't you, and y'all know he is a Bean Counter, don't ya? And I know how much y'all love Bean Counters! Can you imagine what he is going to cut first? I can ....

Edited March 30, 2009 by Pontiac Custom-S

[vonVeezelsnider]

Can you imagine what he is going to cut first? I can ....

I surmise that logo bar below your sig would be about a third of its width...

[!!!TED!!!]

Y'all do know old Fritz boy was hand picked by Wagoner don't you, and y'all know he is a Bean Counter, don't ya? And I know how much y'all love Bean Counters! Can you imagine what he is going to cut first? I can ....

[pow]

Viability Assessments -

GM: http://graphics8.nytimes.com/packages/pdf/...-assessment.pdf

Chrysler: http://graphics8.nytimes.com/packages/pdf/...-assessment.pdf

Neither GM nor Chrysler have met the terms for a loan agreement, but GM is considered "viable" under further restructuring, while Chrysler isn't - it can't survive on its own and needs a partnership.

[turbo200]

amazing twist of fortunes. i did not expect this assessment to be this strict---good for obama,. this is what both chrysler and GM needed to hear:

for GM:

Market Share: GM has been losing market share to its competitors for decades, yet its plan assumes only a very

moderate decline, despite reducing fleet sales and shuttering brands that represent 1.8% of its current market share.

• Price: The plan assumes improvement in net price realization despite a severely distressed market, lingering

consumer quality perceptions, and an increase in smaller vehicles (where the Company has previously struggled to

maintain pricing power).

• Brands/Dealers: The Company is currently burdened with underperforming brands, nameplates and an excess of

dealers. The plan does not act aggressively enough to curb these problems.

• Product mix: GM earns a large share of its profits from high-margin trucks and SUVs, which are vulnerable to a

continuing shift in consumer preference to smaller vehicles. Additionally, while the Chevy Volt holds promise, it will

likely be too expensive to be commercially successful in the short-term.

• Legacy liabilities: In GM’s plan, its cash needs associated with legacy liabilities grow to unsustainable levels,

reaching approximately $6 billion per year in 2013 and 2014.

looks to me like the Obama team got the info they needed to get.

DUMB DUMB DUMB DUMB DUMB:

• The plan contemplates that each of its restructuring initiatives will continue well into the future, in some cases

until 2014, before they are complete.

o The slow pace at which this turnaround is progressing undermines the Company’s ability to compete

against large, highly capable and well-funded competitors. GM’s plan forecasts it to catch up to (and, in

some cases, surpass) its competitors’ current performance metrics; however, its key competitors are

constantly working to improve as well, potentially leaving GM further behind over time.

• Given the slow pace of the turnaround, the assumptions in GM’s business plan are too optimistic.

o Market Share

GM has been losing market share slowly to its competitors for decades. In 1980, GM’s US

market share was 45%; in 1990, GM’s US share was 36%, in 2000, its share was 29%. In 2008,

its share was 22%. In short, GM has been losing 0.7% per year for the last 30 years.

• Yet, in its forecast, GM assumes a much slower rate of decline, 0.3% per year until 2014,

even though it is reducing fleet sales and shuttering brands which represent a loss of 1.8%

market share, of which only a fraction will be retained. Management’s plan to achieve

this is driven by a reduction in nameplates and an ensuing increase in marketing spend

per nameplate.

• Furthermore, in the current plan, GM has retained too many unprofitable nameplates that

tarnish its brands, distract the focus of its management team, demand increasingly scarce

marketing dollars and are a lingering drag on consumer perception, market share and

margin.

[turbo200]

MORE:

look at how clean and efficient this is:

GM earns a disproportionate share of its profits from high-margin trucks and SUVs and is thus

vulnerable to energy cost-driven shifts in consumer demand. For example, of its top 20 profit

contributors in 2008, only nine were cars.

GM is at least one generation behind Toyota on advanced, “green” powertrain development. In an

attempt to leapfrog Toyota, GM has devoted significant resources to the Chevy Volt. While the

Volt holds promise, it is currently projected to be much more expensive than its gasoline-fueled

peers and will likely need substantial reductions in manufacturing cost in order to become

commercially viable

• Even under the Company’s optimistic assumptions, the Company remains breakeven, at best, on a free cash flow

basis throughout the projection period, thus failing the fundamental test of viability.

o Under its own plan, GM generates $14.5bn of negative free cash flow over its 6 year forecast period.

Even in 2014, on its own assumptions, GM generates negative free cash flow after servicing legacy

obligations.

o Given the highly challenging current market, the Company is already behind plan in its overall volume

expectations and market share for calendar year 2009.

o Since the Company has built a plan with little margin for error, even slight swings in its assumptions

produce significant and ongoing negative cash flows. For example, a 1% share miss in overall global sales,

all else being equal, in 2014 would lead to a $2 billion cash flow reduction in that year.

somewhere i read the board of directors is also going to be replaced!!!!

[Teh Ricer Civic!]

While i appreciate that the government evaluated GM's plan in a manner that any company would do, the assessment is not all that deep nor offers any additional insights into anything. Of course management is going to pitch an overly optimistic plan, that's how you sell something then negotiate it to something you want.

And who is going to run GM now? Some puppet of the government? This seems like nothing more than a not-so-subtle way to nationalize the company.

I fear that i may be forced into a Mustang come time to buy a new car, as i will not be supporting a nationalized car company, nor some company that is partnered with FIAT.

[Intrepidation]

My question: why the f@#king hell are the banks being held to this sort of strict standard?

[SingleStylish]

My question: why the f@#king hell are the banks being held to this sort of strict standard?

Sadly that is the question few are asking and NO ONE is answering. Furthermore, the banks were given grants as opposed to these asset backed loans. The government modified law to make them the first recipients of money should there be a bankruptcy. Sad... the effing banks should have failed, been sold, and in the interim the government could have shored up confidence with law that would have temporarily expanded powers of the FDIC to insure all deposits regardless of amount. The amount of money required would have been smaller in every way along with being transparent.

It is sad, we have a lack of vision in Washington. All parties are guilty.

[longtooth]

My question: why the f@#king hell are the banks being held to this sort of strict standard?

The unfathomable strength of the 'toaster lobby'.

[BuddyP]

My question: why the f@#king hell are the banks being held to this sort of strict standard?

That's the key here... Congress screwed that up bad with just handing over $$ with no concessions (Thanks Barney and Dodd!), now since people are getting upset about the ordeal, Obama's going to put on a "hardass" face and throw his power around to GM to make it look like he's "being tough". Look, whether or not Wagoner needed to go is one thing, I'm not arguing that. However the Gov't has NO right to come in and tell a business who's gotta go and who's staying.

Looking back pre election, once again I see another thing that McCain was right about.... let them go Chapt 11, restructure and come out lean with next to NO Gov't intervention.

I cannot stress enough about how disappointed I am with our current governing body (President through Congress)

[cletus8269]

My question: why the f@#king hell are the banks being held to this sort of strict standard?

because thats where the money comes from silly, if they go under we'll have to barter and trade again

see my lowly bank has high standards and didnt give in by handing out loans to every tom dick and harry that wanted one. high risk? no loan. The Palmetto Bank may not ring a bell to some but its been around since 1906 and made it through the great depression, and doesnt need the governments help this time around either.

[saturnd00d]

I'm glad to see Rick gone, I don't understand how anyone could be sad to see him go.

He took over at a time when GM was slipping, and shoved them over the cliff.

[Drew Dowdell]

While i appreciate that the government evaluated GM's plan in a manner that any company would do, the assessment is not all that deep nor offers any additional insights into anything. Of course management is going to pitch an overly optimistic plan, that's how you sell something then negotiate it to something you want.

If you lie on your mortgage application and get caught, you get denied for a loan also.

And who is going to run GM now? Some puppet of the government? This seems like nothing more than a not-so-subtle way to nationalize the company.

The current GM COO looks to be first in line.

[Drew Dowdell]

Y'all do know old Fritz boy was hand picked by Wagoner don't you, and y'all know he is a Bean Counter, don't ya? And I know how much y'all love Bean Counters! Can you imagine what he is going to cut first? I can ....

Opel we hope. There is no point for them anymore. Chevy is growing in Europe. Cut Opel, Saab, and Vauxhall to free up marketing dollars/euros for Chevy and Cadillac.

[CaddyXLR-V]

My question: why the f@#king hell are the banks being held to this sort of strict standard?

Some of those you want held to those standard are in no danger of collapsing. They made money in 08, and will make money in 09. They bought the failed banks. To make your statement more accurate, you need to name Citibank, and not pull all other banks in the same category as them. I worked for 2 of them that are making plenty of money, and took over failed banks. They can still pay their bills, and didn't even want the money from the Govt. GM was begging for the money.

Edited March 30, 2009 by CaddyXLR-V

[capriceman]

Im just saying....

Anyone notice the "world" stocks kinda crashing right now?

and For the first time gold is not going up while stock as a whole fall?

Must of you are so blind of the internals of how gm works. with this news gm will most likely fail. That Will be the sad end of America with it.

[BuddyP]

Im just saying....

Anyone notice the "world" stocks kinda crashing right now?

and For the first time gold is not going up while stock as a whole fall?

Must of you are so blind of the internals of how gm works. with this news gm will most likely fail. That Will be the sad end of America with it.

Dow is down 280 points due to Obama throwing out his "personal" plan to reconstruct GM/Chrystler... this just 15 min. before he is to speak about it (10:45 EST here right now). Watch for the stocks to plummet more. Obama has NO right to try and tell GM how to run it's business. This IS a sad day, for us and GM and another blow to America as a whole for '09. Obama should've been the first to go before Wagoner.

GM how we know it will be dead. Cars we want/like (Corvette, Camaro, V8 G8's, anything "fun") will be gone. Don't expect a 6th gen Camaro or C7. Buy em up now and say bye.

[BuddyP]

Sorry but I'm still a bit irate about this, letting Wagoner go is Obama's scapegoat. Why wasn't Gettlefinger told to leave? A lot of what the UAW has done has put GM down this path?

[Drew Dowdell]

Im just saying....

Anyone notice the "world" stocks kinda crashing right now?

and For the first time gold is not going up while stock as a whole fall?

Mostly unrelated events.

The Dow is going to go to 6500 and it's going to take the rest of the world with it. The "rally" last week was a false one brought on by irrational reactions to housing news.