Should Wagoner go?

[FoMoJo]

Wagoner's future with GM has been kicked around in the hearings for awhile.  It seems that many of the politicians want to see a head on the platter as part of the loan bailout deal.

Does Wagoner deserve to stay or go?

Debate over Wagoner's future at GM heats up

excerpts...

A debate over whether embattled General Motors Corp. CEO Rick Wagoner should be removed heated up again on Monday even as Congress proposed a short-term industry bailout designed to keep the automaker from collapsing by year-end.

There have been several missteps on Wagoner's watch, but there are ample reasons he should stay at GM, analysts say.

Wagoner, 55, has amassed a long list of hits and misses since being named CEO in 2000. On the plus side, he has slashed $9 billion in costs, overseen a push into emerging and profitable overseas markets, landed landmark concessions from the United Auto Workers union, rejuvenated product development and narrowed GM's quality gap with foreign rivals.

The automaker also has pumped $103 billion into its pension and other retirement plans.

But GM has lost almost $73 billion since 2004, and its U.S. market share has dropped more than 6 percentage points to 22.1 percent. It remains saddled with too many brands and dealers, has taken on significant additional debt, and failed to take steps to boost liquidity to help insulate the company from the latest severe downturn.

Some critics think the automaker also relied too long on large SUVs and pickups -- a source of profits for years -- and failed to see the consumer shift to more fuel-efficient cars.

Growing pressure on Wagoner to step down emerged over the weekend as Washington readied a rescue bill for the industry. On Sunday, U.S. Sen. Chris Dodd, D-Conn., head of the Senate Banking Committee and a key player in the bailout situation, said it was time for the executive to "move on." Dodd reiterated his position on Monday, though he said it's not his job to "hire and fire."

The proposed $15 billion bailout bill sent to the White House on Monday did not specifically call for management changes.

President-elect Barack Obama said Sunday that Detroit auto executives should step down if they are not willing to adapt to changes in the market and the industry.

[280Z Turbo]

"President-elect Barack Obama said Sunday that Detroit auto executives should step down if they are not willing to adapt to changes in the market and the industry."

You mean go back to making SUVs and V8s? Did everyone forget that gas is under $2 a gallon? Hybrids are not going to be very lucrative at this point.

[MaxPower]

Well, generally speaking when a corporation is struggling it's the management's fault.  So yeah, clean house if they can find someone better to do the job.

But it'd be dumb just to fire one guy so that they can nail his head to the gates of Detroit as a warning.


Also, can these low gas prices be anything but temporary?

[SVT666]

Also, can these low gas prices be anything but temporary?

They aren't "low".  This is where gas prices were 18 months ago.  This is where they should be.

[JYODER240]

Senator Dodd probably knows very little about running such a large company. He has no right to say Wagoner should go. He's not a Chairman or probably even a shareholder. Just because he's a Senator doesn't mean he should be able to tell GM who should be their CEO. As much as anything else we have the government to thank for the current situation in Detroit we don't need Senators like Dodd to make it worse.

[JYODER240]

They aren't "low".  This is where gas prices were 18 months ago.  This is where they should be.

uhh, gas is 1.4X a gallon here. It hasn't been that low in over 5 years. That's low.

[Rich]

Hell no he shouldn't go.  Wagoner is still battling all the crap that happened in the Zarella era.  It takes time to turn shit around

[Rich]

uhh, gas is 1.4X a gallon here. It hasn't been that low in over 5 years. That's low.

Man, I wish I was in the states..............

[MaxPower]

uhh, gas is 1.4X a gallon here. It hasn't been that low in over 5 years. That's low.

+1.  These gas prices are low.  Lowest here in nearly 4 years, and look at the precipitous drop in the last two months.  You'd have to be stupid to think that won't go up again.

[3.0L V6]

He has to stay. Playing musical chairs in the executive offices would just make things worse, I imagine.

[TBR]

Well, generally speaking when a corporation is struggling it's the management's fault.  So yeah, clean house if they can find someone better to do the job.

But it'd be dumb just to fire one guy so that they can nail his head to the gates of Detroit as a warning.


Also, can these low gas prices be anything but temporary?

It isn't current management's fault though (however, Wagoner has been at GM far longer than Nardelli or Mullaly have been at Chrysler and Ford).

If the Big 3 top dogs go, so should the UAW's president.

[FoMoJo]

"President-elect Barack Obama said Sunday that Detroit auto executives should step down if they are not willing to adapt to changes in the market and the industry."

You mean go back to making SUVs and V8s? Did everyone forget that gas is under $2 a gallon? Hybrids are not going to be very lucrative at this point.

You mean "same old, same old"...what got them here in the first place?

There's nothing wrong with SUVs; as long as they are efficient to run.  If the domestics can accomplish this before the imports they'll make a mint.

[FoMoJo]

It isn't current management's fault though (however, Wagoner has been at GM far longer than Nardelli or Mullaly have been at Chrysler and Ford).

If the Big 3 top dogs go, so should the UAW's president.

I think they only want the one head on the platter.  Although Wagoner has implemented a lot of restructuring initiatives at GM, it wasn't nearly enough.  Two years ago Ford mortgaged most of its NA assets to raise $18B, in a sink or swim move.  So far, they're the only ones who haven't sunk.

[Byteme]

Replacing Wagoner won't change GM any more than changing Senate leadership will change the Senate.  Dodd should know that.

Frankly, looking at the value of GM stock over the past several years I'm surprised the shareholders are not asking for his head on a platter.

[Lebowski]

GM has structural problems that are much, much deeper than the current CEO.

Nothing short of chapter 11 and the death of the UAW will make the big 3 viable entities over the long term.  Bailouts, new managements etc. merely delay the inevitable.

[the Teuton]

UAW pres. Ron Gettelfinger said yesterday on CNN (I watch this crap occasionally) that only 10 percent of a car's cost is due to labor, and he says he has statistics to back that up.  He also said that the union contracts were not out of line with the non-union prices demanded down south, and he said unions aren't anywhere close to being the source of the problem.

Hogwash.

[r0tor]

its amazing Dodd has the balls to say that after giving the financial instututes 10x more money and not syaing shit about their CEO's... oh right, they give him more money though

[Lebowski]

He also said that the union contracts were not out of line with the non-union prices demanded down south

So why does the union need to exist?

[the Teuton]

So why does the union need to exist?

And we've now come to the "ah hah!" moment of the day, haven't we?

[Raza]

They aren't "low".  This is where gas prices were 18 months ago.  This is where they should be.

I don't know about Canada, but this is the first time I paid less than $2 per gallon for gas since 2004.

[Raza]

GM has structural problems that are much, much deeper than the current CEO.

Nothing short of chapter 11 and the death of the UAW will make the big 3 viable entities over the long term.  Bailouts, new managements etc. merely delay the inevitable.

I really doubt that Chapter 11 would save the Big 3.  I think it would be a stepping stone to an epitaph.

[FoMoJo]

So why does the union need to exist?

They're still hoping to get their pot of gold to manage for pensions and healthcare.  Otherwise, with new employees being hired for $14.+-, they serve no other purpose in this economical climate.

[TBR]

I don't know about Canada, but this is the first time I paid less than $2 per gallon for gas since 2004.

Yeah, other than last week the only time less than $25 filled the Prelude was the day I bought it.

[the Teuton]

I still remember the day when gas went up to $2.30 a gallon and there was one mom and pop shop that still had it at $1.899.  We were in such a frenzy to fill our tanks at that place.

[Byteme]

UAW pres. Ron Gettelfinger said yesterday on CNN (I watch this crap occasionally) that only 10 percent of a car's cost is due to labor, and he says he has statistics to back that up.  He also said that the union contracts were not out of line with the non-union prices demanded down south, and he said unions aren't anywhere close to being the source of the problem.

Hogwash.

I heard that.  I wonder if that 10% is the cost of labor at the assembly plant or does it include the labour cost in all the components of the car, many of which are fabricated by UAW unionized subcontrctors to the auto companies.

Anyway I think the big killer is not the actual wages so much as the benefits package the automakers have agreed to pay the UAW worker.  Not to memtion all the retiree benefits, which the non-big three manufacturers located in the US are not saddled with to the same extent since their plants have not been in existence very long and their number of retirees is far less than the big three's.

[Lebowski]

I really doubt that Chapter 11 would save the Big 3.  I think it would be a stepping stone to an epitaph.

It might not save them, but it's the only course of action that has a chance.  They are quite simply uncompetitive in their current form (and have been for decades), and no other plan will change that.

They need to get out from under the UAW, and only Ch 11 will achieve that as I see it.

[SVT666]

I don't know about Canada, but this is the first time I paid less than $2 per gallon for gas since 2004.

If the dollars were equal, then we're paying the equivalent of $3.18 a gallon.  If you take into account the disparity in the dollars, we're paying $4.01.

[FoMoJo]

They aren't "low".  This is where gas prices were 18 months ago.  This is where they should be.

What are the prices out your way?

They were 72.9 here this morning.

[Speed_Racer]

If there's anybody's head I want to see on a platter, it's Ron Gettelfinger's (along with the rest of the UAW.) I just don't see how the companies ever expect to turn themselves around if they have to drag the UAW behind them.

[dazzleman]

If Dodd is looking for somebody who needs to move on, maybe he should look in the mirror.  He's a major figure behind the Fannie Mae/Freddie Mac debacle.  I don't think the handmaiden of that disaster ought to be deciding whether other people ought to be held accoutable for much lesser disasters.