How does General Motors CEO Richard Wagoner still have a job?

Posted Aug 1st 2008 5:42PM by Zac Bissonnette
Filed under: Management, General Motors (GM)

In June 2000, Richard Wagoner became president and CEO of General Motors Corporation (NYSE: GM) In case you haven't been paying attention for the last eight years, here's an overview of what's gone down:

GM paid huge dividends even as its pension and health care obligations spiraled out of control leaving the company in a precarious capital position.

When SUVs started to get hot, GM essentially bet its future on the continuation of that trend and the reasonably low gas prices that made it possible. That's right: GM was essentially an commodities speculation hedge fund masquerading as a car company. Now Bloomberg is reporting that GM lost $2 billion on leased SUVs.

Now that gas is at $4 per gallon and M&A activity has dried up, GM has decided that this is a good time to try to sell its Hummer brand. Does it come with Pogs, Pokemon cards, and HD DVD?

The stock was trading in the $60 per share range when Wagoner took the helm and now it's fallen to $11.07 and Merrill Lynch is saying that a GM bankruptcy is "not impossible." And remember: Merrill Lynch has been overly optimistic about its own ability to survive without raising capital. So "not impossible" may very well mean "quite possible."

Given all that, I have a serious question for General Motors' board of directors: How can Richard Wagoner possibly still be your CEO? Hypothetically, what would he have to do to get fired? Join Al Qaeda? In 2007, Wagoner took home $14,415,914, a 41% raise over 2006.

The fact that Carl Icahn isn't filing a 13-D and raising hell is indicative of the fact that this is one company that's probably too late for saving.

Tags: carl icahn, CarlIcahn, General Motors, GeneralMotors, GM, gm bankruptcy, GmBankruptcy, hummer

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Reader Comments (Page 2 of 2)

8-15-2008 @ 11:30AM

Bill Dollar said...

Disappointed Dolfan said...
sonnype said...

GM will have only Chevrolet and Cadillac and GMC trucks.

Ford will be purchased in a fire sale by either a Korean or Chinese company unfortunately!"

Are you a complete idiot?? It is almost IMPOSSIBLE for GM to get rid of one brand, let alone more than HALF!!! It's called dealerships, and they wouldn't take kindly to GM doing that

And about Ford, once again, COMPLETE STUPIDITY! You people are the most negative, un-American, whiney, BABIES, I've yet to see.

You need to take a long walk and drink prenty of water. GM has no choice but to eliminate brands. Remember Oldsmobile?

As to Ford they waited too long and will be out of cash in a couple of years. Yes, this is sad but business only allows the strong to continue to serve customers, and both GM and Ford have not listened to the market.