General Motors’ CEO was told to leave
Filed Under (Business News) by Fred Chan on 31-03-2009
Tagged Under : CEO, General Motors, Wagoner
Rick Wagoner, late of General Motors, never saw the axe coming, according to Reuters.
When he arrived at the Treasury Department for a meeting on March 27 with Obama administration’s autos task force, he was a 32-year GM veteran and a chief executive carrying the weight of the company’s wrenching restructuring on his 6-foot-4 frame. Pressure for him to quit last fall when he first approached Washington for a bailout had faded.
But Wagoner’s plan for a GM turnaround and a US$16 billion bailout was rejected in the meeting and the company where he spent his entire professional life fell off his shoulders.
“In the course of that meeting, they requested that I step aside as CEO of GM, and so I have,” Wagoner said in a message posted on the automaker’s Website early March 30.
A majority of GM’s board will also be replaced.
Wagoner stepped into the afternoon air jobless.
He could not be reached Monday for further comment.
Wagoner has become the most-recognizable casualty of a once vaunted industry brought to its knees by a confluence of disastrous circumstances that coincided with the later years of his tenure. Some of the wreckage was out of Detroit’s control, but some of it — as President Barack Obama has said — was self inflicted.
“Yes, we were surprised,” Fritz Henderson, Wagoner’s former top deputy and now his replacement, said of the task force rejection of the company’s plan that he helped construct.
Henderson said emotions for many people in the GM community over Wagoner’s ouster has ranged from shock to sadness to pride.
“He was asked to step aside and he did because he felt that was one of the requirements in order to move forward,” Henderson said in a conference call with reporters.
“I think the organization is quite sad about that but our job is to move forward and get the job done,” Henderson added.
Obama last week cited years of corporate mismanagement as a factor for the U.S. auto industry’s decline. Wagoner presided over GM’s rapid deterioration in the past five years.
While the remark raised few eyebrows and some references were made to the entrenched Wagoner, many industry insiders believed he had begun to mute critics and was moving GM in a new direction.
At the very least, he was not resisting change.
“This is not meant as a condemnation of Mr. Wagoner, who has devoted his life to this company,” Obama said in a speech laying out an restructuring strategy he promises to aggressively pursue.
“It’s a recognition that it will take a new vision and new direction to create the GM of the future,” Obama said.
Lawmakers who spoke with Obama said he was “matter-of-fact” about the decision to seek Wagoner’s resignation.
“The president said he had decided to do that. He wasn’t asking for opinions,” said U.S. Sen Carl Levin, a Michigan democrat. “There wasn’t much point in arguing whether it was fair or unfair, wise or unwise.”
Wagoner’s counterparts at Chrysler, Bob Nardelli, and Ford Motor, Alan Mulally, are relatively new to their jobs and both recruited from other industries.
“We are left to look back and say that Wagoner’s appointment as both chairman and CEO in 2003 was little more than an act to ensure the dynasty of GM boardroom arrogance and failure continued,” said Howard Wheeldon, senior strategist at brokerage BGC Partners.
Wheeldon said Wagoner’s departure had been all but inevitable since the automaker sought government funds. At the time of the company’s US$13.4 billion bailout last fall, Sen Christopher Dodd, chairman of a committee overseeing corporate rescue funds, had publicly called for Wagoner to step down. – Reuters
