Now that General Motors (NYSE: GM) has filed for bankruptcy, leaks about what happened in the company's final days and weeks will begin appearing in the media at a furious pace.When Obama auto task force chief Steven Rattner called then-CEO Richard Wagoner in to tell him it was time to pack his bags, some GM board members were "furious."
"I want out," Bloomberg quotes one GM director as saying. "When they made the decision to fire Wagoner without talking to the board, that did it. We had a conversation with Rattner. I told him it's our responsibility to pick the CEO."
The notion that the United States government shouldn't step into the management decisions of failing companies it takes a majority ownership stake in is flawed. As GM's single-largest shareholder, the United States government has a responsibility to shake things up when taxpayer money is on the line -- just as an activist hedge fund manager will put pressure on management when it believes shareholder value is in danger.
One of the nice side effects of this bankruptcy filing is that the company's board of directors will be sent packing.
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Reader Comments (Page 1 of 1)
6-01-2009 @ 1:56PM
David said...
It is about time that GM's Board of Directors are fired. They "milked" GM for way too many years and could give a damn about how it does, as long as they got well paid for doing NOTHING. While I do not agree that the Gov't should own private companies, it is something that the Gov't had to do to stop the ABUSE that the Directors and moron executives did for way too many years. I feel that the Directors and Executives of GM should be forced to pay back all their bonuses etc. Shame on them for not carring about GM and the employess, especially the non union emloyess which they kept in the dark all these years.
6-01-2009 @ 3:33PM
al coholic said...
It's hard to argue with the reasons Treasury had to fire Wagoner but the action does leave on with an uncomfortable "slippery slope" feeling.
6-01-2009 @ 9:12PM
R Brist, MD said...
Rick Wagoner did not perform his Functional Responsibilites for years! He has lost GM 82,000.000.000.00 BILLION DOLLARS since 2003!! This CEO, "AKA", Known as a "PONZI" had the nerve to continue take his SALARY OF $24,000,000.00 ++ and a EXIT SALARY From us! (the U.S. TAX PAYERS FOR BEING FIRED!!) another $23,000.000.00 to leave Quietly to the Grand Cayman Islands with a GM made Shovel! Oh by the way RICK , your new homes are almost completed in Fisher Island and in Port Royal, Florida. Please bring the ADDITIONAL CASH LEFT OVER FROM YOUR GROSS POINTE HOME. THANKS--SEE YOU ON THE BEACH IN FLORIDA!!
6-02-2009 @ 6:56AM
al coholic said...
I'm just a little concerned about where this type of action is taking us. What's next? Polititions on the boards to represent the Government's interests? I'm sorry, but as good a thing as it may have been to remove Wagoner, we may have given up too much freedom down the road from the action. JMHO....
7-24-2009 @ 11:04AM
dick_nichols said...
Damn, I missed this article when it came out. Not sure why any member of the board should be upset. If they hadn't been such a flock of mindless, spineless sheep, they could have saved the shareholders, bondholders and U.S. taxpayers about $160 billion. They and the AIG management teams should be.......oh, hell.never mind.