GM Chief to Resign at White House's Behest Obama Pushes General Motors and Chrysler to Slim Down, Make More Concessions
By Peter Whoriskey Washington Post Staff Writer Monday, March 30, 2009; A01
The Obama administration has forced the longtime head of General Motors to resign and said yesterday that it would withhold additional federal aid to the auto industry unless the ailing companies undertake changes they so far have been unwilling or unable to make.
The administration effectively rejected as untenable the business plans that GM and Chrysler had submitted to restructure their companies, saying that neither had fulfilled the terms of the federal loans the companies received in December.
. . . Between 2005 and last year, Wagoner oversaw more than $73 billion in losses.
His defenders, however, have noted that during Wagoner's reign GM has led the industry in renegotiating key contracts with the United Auto Workers. Those revised contracts allow automakers to pay new hires much lower wages and permit the company to shift billions in retiree health-care costs to a union-run trust. Both of those moves put the company in far better financial position for the future.
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The Harvard Business School strikes again, as '77 graduate Rick Wagoner gives the heave-ho to R&D, blunders ahead on the big-ticket, big-profit SUV and pickup truck lines, finally skidding to a stop with three flat tires and a busted company.
Who knew? bawls the now 'downsized' General Motors' CEO, as his legacy grinds like a blown transmission down to wrecking the company, renegotiating (downward) wages and shifting health care to the Unions. That essentially means that workers who relied upon GM to provide health care can now take care of themselves.
Wow, Rick. I wonder if the full story of your storied years at GM will be studied by future grads at the good ol' Harvard Business School?
How does a CEO lose $73 billion in three years and not get defenestrated from the 14th floor Executive Suite? That's two thousand million buckaroos a month, nearly a $100 million a day on the basis of a five day week. Do you suppose anyone was pulling all-nighters up there? Any emergency meetings of the finance committee? Anyone even bother to see what the Japanese were doing.
Yeah, Toyota had a serious loss year as well, but they have a war-chest of retained earnings, something GM can only wish for. So, here we are, supposedly bailing out GM to save jobs, then demanding more job cuts and more shifting of liability back to the workers through their union. One wonders why we bother?
Tongue-in-cheek (but not all that far), I opined some years ago (2005) "My Plan to Save General Motors," that GM ought to become a brand manager and get out of manufacturing.
Actually, it looks like they are well on the way, but the brands may go as well, thanks to decades of inbred staring at the hood ornament.