GM CEO asked to step down.

Well I don't know if "asked" is the right word. Apparently he is being told to leave by the Obama administration. More weirdness in the world of the Detroit auto makers.

Link:

http://news.yahoo.com/s/ap/gm_wagoner

And so it begins.

The only upside to all this mess is that companies will avoid bailout money like the plague in the future (hopefully).

Interesting. I guess it's a good sign for taxpayer that our government is trying to do more than just throw cash at the problem, I'm just not sure I like the idea of the government running car companies.

wow...

investors demanding results??

That's the way I see it. The government "invested" billions of dollars, so they should have a bit of say in how the company works. If companies don't like the idea, they can avoid taking the bailout money, pay back what they've been given, or manage themselves so this doesn't happen.

Proves the old saying "The borrower is slave to the lender." I do believe the borrowers are going to end up regretting these loans. Good for them they, are getting what they deserve. I'm betting bankruptcy is looking better every day.

Keith wrote: That's the way I see it. The government "invested" billions of dollars, so they should have a bit of say in how the company works. If companies don't like the idea, they can avoid taking the bailout money, pay back what they've been given, or manage themselves so this doesn't happen.

True, but they didn't take such an interest in the banks who received hundreds of billions of dollars until the public started screaming anyway. I am in no way defending Detroits record but Washington seems to have a serious dislike for the big three.

Toyman01 wrote: loans.

Loans is being generous.

Feedyurhed wrote:

Keith wrote: That's the way I see it. The government "invested" billions of dollars, so they should have a bit of say in how the company works. If companies don't like the idea, they can avoid taking the bailout money, pay back what they've been given, or manage themselves so this doesn't happen.

True, but they didn't take such an interest in the banks who received hundreds of billions of dollars until the public started screaming anyway. I am in no way defending Detroits record but Washington seems to have a serious dislike for the big three.

Maybe not until the public started screaming, but now they're paying attention. The "request" for Wagoner to get lost may have been a result of that as well.

(tinfoil hat) I wonder who at the UAW Obama talked to (end tinfoil hat)

I certainly hope that companies take this as a sign to pay back ASAP or you can become "Government Motors"

Can we just take a moment to consider how much trouble Mr. Wagoner would have been in, with everybody from his stockholders to the know-it-alls from the business press, if he had NOT been building those notorious "pickup trucks and SUVs" when that was what the great North American public wanted to buy? Suppose he had said, "Never mind what the consumer thinks he/she wants, cancel the Escalade and let's build more Aveos"? They would have given him a nice cup of tea and wheeled him away in an unmarked van for "rest." Everyone on this board knows that it takes YEARS to produce a car, but apparently only weeks to trash an economy. Mr. Wagoner is not a villain here, just another victim.

Stealthtercel wrote: Can we just take a moment to consider how much trouble Mr. Wagoner would have been in, with everybody from his stockholders to the know-it-alls from the business press, if he had NOT been building those notorious "pickup trucks and SUVs" when that was what the great North American public wanted to buy? Suppose he had said, "Never mind what the consumer thinks he/she wants, cancel the Escalade and let's build more Aveos"? They would have given him a nice cup of tea and wheeled him away in an unmarked van for "rest." Everyone on this board knows that it takes YEARS to produce a car, but apparently only weeks to trash an economy. Mr. Wagoner is not a villain here, just another victim.

QFT

I don't fault him for building SUV's and trucks when they were hot. That was the right thing to do at the time. However, they did it at the sacrifice of their total line of vehicles and as such were not able to react to market swings quickly. And when the market started to move they didn't, until it was way too late. I do not think he is a victim. I think he had a good run but they need someone else.

There's other factors afoot here, too. I'm going to mention one of them in particular - the chicken tax.

One of them unintended-consequences jobs passed as retaliation against Europe in the early 1960's (Europe tripled their import duties on American poultry, so the US slapped foreign truck imports with a 25% tax - this back when VW was essentially the only foreign truck manufacturer)

So, that 25% tax on foreign trucks created a specific and artificial home field advantage for domestic manufacturers in the truck market. Over time, it's totally reasonable to see how the truck sector could slowly become a larger and larger share of the domestics' product makeup simply due to the government-mandated advantage. On top of that legislation, you get various layers like CAFE, which had separate fuel efficiency standards for cars and trucks. On top of all of that, trucks that serve the role of cars find an exploitable grip on the buying public, and it's a combination of factors that winds up painting Detroit into the very corner the government had originally wanted to protect for it.

ignorant wrote: I don't fault him for building SUV's and trucks when they were hot. That was the right thing to do at the time. However, they did it at the sacrifice of their total line of vehicles and as such were not able to react to market swings quickly. And when the market started to move they didn't, until it was way too late. I do not think he is a victim. I think he had a good run but they need someone else.

Exactly. I think overall America has built good trucks, SUVs and large cars but never developed any good small cars. They left that market to the Japanese and Koreans who gladly took it over and dominated it. When the economy went south and the fuel prices sky rocketed GM was left with nothing that people wanted. Not only poor planning but this had happeded at least once before. If you fail to learn from history you are doomed to repeat it.

ignorant wrote: I don't fault him for building SUV's and trucks when they were hot. That was the right thing to do at the time. However, they did it at the sacrifice of their total line of vehicles and as such were not able to react to market swings quickly. And when the market started to move they didn't, until it was way too late. I do not think he is a victim. I think he had a good run but they need someone else.

Agreed. There's no reason they couldn't have been building a line of small, fuel-efficient Honda-like vehicles under a different name, say, oh, I dunno, like Saturn?

The beauty of having so many different brands is that you can have niche vehicles in every niche. GM just seemed to make every brand try to be everything to everyone. Ford and Chrysler are guilty of this too, I mean, a Lincoln is just a Ford with leather seats and pearlescent paint, and Mercurys are just... urm... honestly, I don't know what Mercury is supposed to be anymore.

GregTivo wrote: (tinfoil hat) I wonder who at the UAW Obama talked to (end tinfoil hat) I certainly hope that companies take this as a sign to pay back ASAP or you can become "Government Motors"

Yeah that thought crossed my mind as well. The UAW was a big supporter of His Highness. I can't see him doing anything that would weaken the UAW. Maybe Wagoner was better than I gave him credit for.

Good Riddance.

I like Wagoner, I thought he was doing well, especially recently.

This is what really scares me,

"Wagoner's departure indicates that more management changes may be part of the deal, but it is still unclear who will be in charge of GM. The automaker recently promoted Fritz Henderson, its former chief financial officer, to become president and chief operating officer. Many in the company thought he would eventually succeed Wagoner."

That's what GM needs, a finance guy running the company again, that'll make good products...

PaulY wrote: That's what GM needs, a finance guy running the company again, that'll make good products...

thats common. The head Ops guy at the company I am going to is an accountant by trade.. ugh.

Just a question...what did the Alan Mullaly, CEO of Ford, do that Wagoner didn't? Ford seems to be doing fine right now. While GM is taking it in the shorts. Did Mullaly squirrel money away knowing that an economic downturn was coming? Most definitely. He also implemented changes that ensure Ford was profitable. Good thing about Mullaly is he's an engineer.

Maybe Wagoner attempted this but GM was too big a behemoth to turn? Either way, he's the CEO. Therefore he's the fall guy. The first guy to get the axe should always be management. They make the decisions. Therefore, they should profit and lose first from those very decisions.

It's been a long time coming. How long has Wagoner had to turn the company around?

Wagoner has been at GM for decades. In senior management for almost 30 years (~10 in Brazil, ~20 in the US), CEO since around 2000, and chairman since 2003.

You hit the nail on the head on all three companies (and VAG) that they try and make all of their subcompanies be everything.

Ford was just better at it, and had few enough car "lines" that is was not so obvious. They were also smart enough to keep Jag and volvo distinctly seperate from the main Ford lines.

GM has too many "lines" that overlap. People who shop buick would be just as happy with Olds (when it was around) as pontiac, Chevy, Caddy, etcetc.. and they crossed too much into Saab and Saturn. Far too many of the cars were just different "looks" as opposed to even slightly different sheetmetal or even packages.

Chrysler... well, they deserved what was coming to them. Yes, they Axed Plymouth, but it was quite obvious their whole mantra was LARGE cars and trucks. Even their smallest car was a trucklet (wannabe) no diversification what-so-ever.

Personally with GM.. they should have left Saturn as Opel/Vauxhal and thrown Saab in to that Mix as the high end version. Let Saturn and Saab duke it out for the people who do not want to be seen buying an american car.

Ford's Mulally has been at Ford since 2003, prior to that, he was at Boeing.

Chrysler's Nardelli has only been at his job since 2007, prior to that, he was with Home Depot.

So, GM needs the most money and Wagoner happens to be the only one of the three CEOs with long-standing ties to the Big 3.

Ford hasn't actually borrowed any money yet. And Chrysler was sucked dry by Mercedes. What's GM's excuse?

It's been said already so I'll echo it here. GM was making the vehicles that made them a profit, that's just business. But GOOD business would have been to realize that the fuel to drive these cars is finite and as the supply dwindles the price will go up. when THIS happens, we will want small cars. Unlke some here have said (in other topics) Americans did and do want small cars or Toyota, Honda, Mini, Subaru, Mitsubishi and the Koreans wouldn't be selling them here. For GM to not see this coming is short sighted and really dumb business. Now wasn't it Lutz that allowed the Germans to exact revenge on Chrysler for what America did in WWII? He took his HUGE check and left, giving the keys to the Germans. They raped and pilliaged Chrysler and left them for dead.