Last fall, I suggested that General Motors Corp. (NYSE: GM) ought to follow a six point restructuring plan. One of those steps was to can GM's CEO Rick Wagoner. Under his tenure, which began in 2000, GM's stock has lost 95% of its value and GM has posted $30 billion in 2008 losses while presiding over a North American market share slide from 33% to 19%. What amazes me is that GM's board did not step in years ago. So Monday, President Obama will officially ask Wagoner to step aside.
Regrettably, getting rid of Wagoner leaves an important question unanswered: Who is willing to step into GM's CEO position who is clearly better able to fix the problems that ail GM? It is far easier to fire the person who made the mistakes than it is to find the right person to fix the problems. For that job, I can think of one person who has a successful track record of turning around companies in deep trouble -- Lou Gerstner -- who brought International Business Machines (NYSE: IBM) back from the brink in the 1990s.
In the meantime, GM is poised to get more government billions to keep it afloat. I am confident that getting rid of the CEO who got GM into its current condition is a good move. And it probably helps deflect the criticism heading towards the White House as it unveils additional billions for GM. But unless the next CEO who comes into the job actually starts to remedy GM's problems, it will be far more difficult to defend the next government handout GM demands.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.