GM CEO Wagoner to step down at White House request

GM CEO Wagoner to step down at White House request

I find this news interesting on a lot of levels.

I have never worked at GM, and have never met Rick Wagoner. GM’s current problems have been a long time coming. They are not solely due to the current economic downturn, the market conditions have simply removed the veil.

GM has been steadily losing market share for a long time, while, in my opinion, clinging to the idea that somehow, someday, there would be a spontaneous triumphant return to the good old days. As someone else has said recently, “Hope is not a strategy.” GM has been institutionally unwilling to face harsh realities, and has fallen into the trap of “continuing to do the same things and expect a different outcome.”

Ironically, GM has had for a couple of decades, the best possible insight into their most successful competitor. No other automobile company has had the incredible advantage of unlimited access to a joint venture with Toyota. Everyone else has had to learn from books, consultants, or what they can glean from people they hire in. Not GM. And not just how to run it. They watched the entire process of converting the worst plant they had into the best. On that note alone, I am not sympathetic in any way to GM’s plight. They have just been very good at finding reasons why they couldn’t.

So, all in all, I agree that Wagoner’s time has past, he has had his chance, and he has failed the company.

But now what?

Personally, I think it is time for an outsider, possibly even someone from outside the automotive industry, to take charge. That is what Ford did, and though they are also hurting badly, they are moving in the right direction. The key qualification, in my mind, is someone willing to deal with the truth as it is, and capable of cleaning out the people who operate under any belief system other than “We are responsible.”

Another aspect of this story is disturbing, however. Wagoner’s departure is not at the request of the board of directors (though it should have been). No, it is at the request of the President of the United States. Now with the U.S. Treasury as a significant (and growing, apparently) stakeholder in GM, I suppose he can make that request. But this whole thing is, in my mind, dangerous territory.

2 Replies to “GM CEO Wagoner to step down at White House request”

  1. Mark,

    Very little has been said of why boards of directors of these companies continue to allow failure at the CEO level. Even GE has turned in unusually unacceptable results, but Jack Welch’s hand pick successor Jeff Immelt is still in charge even after doing business with IRAN!

    Why has the system failed these companies?


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