rick Wagoner posts
FeedPosted Apr 7th 2009 2:30PM by Zac Bissonnette (RSS feed)
Filed under: General Motors (GM)

Bloomberg reports that
General Motors (NYSE:
GM) is "speeding up" its preparations for a bankruptcy filing as talks with the UAW and bondholders have stalled. One plan being considered is a 363 sale, which would create a new company with GM's brands and assets, unencumbered by its staggering obligations.
And now for a little discussion of former GM CEO Richard Wagoner, one of my favorite punching bags for the current recession. Mr. Wagoner spent months telling anyone who would listen that bankruptcy was "not an option", even as more rational analysts insisted that it was very much an option.
Continue reading General Motors prepares for bankruptcy -- Was Wagoner lying?
Posted Dec 2nd 2008 10:10AM by Jonathan Berr (RSS feed)
Filed under: Ford Motor (F), General Motors (GM), Employees, Financial Crisis

The Big 3 CEOs are trying to turn lemons into lemonade.
After being pilloried by members of Congress for flying in separate corporate jets to beg for a $25 billion bailout from the federal government, Rick Wagoner of
General Motors Co. (NYSE:
GM),
Ford Motor Co.'s (NYSE:
F) Alan Mulally and Robert Nardelli of Chrysler LLC want to show that
they have learned their lesson. They decided to drive eight hours from Detroit to Washington before testifying on Thursday.
Moreover, they are milking their roadtrip for public relations purposes. Wagoner is traveling via Chevrolet Malibu hybrid and Mulally is driving a hybrid Ford Escape. Nardelli has not finalized his plans yet but as
BusinessWeek notes "he's not flying a corporate jet. That's for sure." I would be stunned if he does not motor to the nation's capital in a Chrysler hybrid.
This whole exercise is silly, but it has a serious purpose. The negative publicity from the corporate jet story cost the Big 3 critical support for the bailout. Some analysts are suggesting that GM and Chrysler may not be able to wait for the Obama administration to take over next month. Ford can hold on a while longer.
Continue reading Big 3 CEOs drive to Washington to suck up to Congress
Posted Dec 1st 2008 11:45AM by Brian White (RSS feed)
Filed under: Industry, Ford Motor (F), General Motors (GM)

When the CEOs of
General Motors Corp. (NYSE:
GM),
Ford Motor Company (NYSE:
F) and Chrysler again
take the steps up to the U.S Congress tomorrow, they will again try to convince U.S. lawmakers that a $25 billion injection into all three companies will somehow stave off their collective death along with over a million U.S. jobs that would be lost if the three automakers cease to exist.
GM's Rick Wagoner, Ford's Alan Mulally and Chrysler's Bob Nardelli -- all of whom flew to the last meeting with Congress on expensive private jets -- will be back in action tomorrow to try for the second time to siphon $25 billion from the federal government. Oops, I mean, the U.S. taxpayer. A few weeks ago, the trio were labeled as unprepared and failed to convince the majority of Congress that $25 billion would allow all three companies to somehow retool their complete efforts pretty fast.
If Wagoner, Mulally and Nardelli can't make their vision compelling with facts, future plans, some kind of competitive strategy and a five-year layout on changes they will make, along with being held accountable to each of them, then the end of the American auto manufacturing triumvirate as we all know it may be the end.
Of course, like many pundits, I sincerely believe that this is all for show and that a structured bankruptcy is the "way out" for at least Ford and GM at this point.
Speaking of leaders, Ford's Mulally -- who has shown some excellent chops at trying to rescue Ford in his two plus years there -- may be the only CEO that needs to stay. Wagoner needs to go (actually, years ago), and why on earth Chrysler nabbed Home Depot shenanigan master Nardelli is beyond comprehension.
Posted Oct 28th 2008 1:12PM by Jonathan Berr (RSS feed)
Filed under: General Motors (GM), Politics, Financial Crisis
General Motors Co. (NYSE:
GM) Chief Executive Rick Wagoner, the longest serving head of an automaker, is personally lobbying members of Congress to back a federal bailout of the struggling automaker, which wants to merge with its much weaker rival Chrysler LLC.
Bloomberg News, which broke the story, reported that Wagoner's "involvement includes attending meetings, such as one with Treasury Department officials last week in Washington." You can bet that Michigan's powerful senior member of Congress, John Dingell, is attending many of the same meetings as Wagoner. GM no doubt is employing an army of lobbyists -- both Republicans and Democrats -- to press its case. The company, which for now may be the largest, has little choice.
GM and Chrysler would need between $10 billion and $12 billion to integrate their operations, according to a Citigroup note cited by Bloomberg. Combining the two fading industrial behemoths would be a logistical nightmare. Imagine trying to combine disparate systems for everything from personnel to purchasing to accounting. Let's not forget the byzantine IT systems at both companies as well.
Economically, it's hard to justify bailing out GM. Decades of incompetent management at the Big Three resulted in the industry drowning in billions of debt. The problem with telling the industry "no" is political. Dingell is a 1,000-pound gorilla in Congress. The auto industry continues to have considerable clout in Washington as well. Their argument is simple: if Wall Street fatcats can get a federal bailout, why not us?
The problem with rescuing Wall Street is that lots of struggling industries are going to pass the hat in Congress. What about the airlines? The retail sector? Pharmaceuticals? When does it end?
Posted Oct 28th 2008 9:25AM by Gary Sattler (RSS feed)
Filed under: Deals, Bad News, Rants and Raves, General Motors (GM)

You may file this under
he can't be serious.
Looking in
The New York Times business section, I notice that GM CEO Rick Wagoner skipped on over to Washington with his hat in his hand. It seems that Mr. Wagoner has discovered that the bailout legislation has been written in a manner that would allow him to get some money for his flailing company,
General Motors Corp. (NYSE:
GM). The funniness starts when you realize that Rick wants some money from the government (read that, us, the taxpayers) so he can finish totally wrecking his company by merging it with Chrysler. Really, the idea is almost too funny to laugh at. It makes me glad that my dad dumped his GM holdings when he did.
The
Times' article states: "If G.M. or Chrysler were to go under, tens of thousands of people would be thrown out of work." That may be true in a fashion, but I have news for the
Times and Mr. Rick Wagoner: if this merger happens, about 40% of those people now employed by the two companies will probably be out of work anyway. On the other hand, a merger of this sort would effectively pitch the UAW into the street, pretty much for good. Oh, I bet our friend Rick already thought about that.
If anyone who reads this has a chance to talk with GM's CEO Rick Wagoner before he pillages the public coffers to assure his income for a few more quarters, he/she might want to offer him this one little gem of wisdom:
An attractive, quality product, in keeping with the times, would really get your rear out of a jam, Rick.
Posted Oct 23rd 2008 10:00AM by Brian White (RSS feed)
Filed under: Competitive Strategy, General Motors (GM)
This post is part of a feature on companies and products that our bloggers think are in need of a makeover. See all 26.
General Motors Corp. (NYSE: GM) will never be the same. The American manufacturing icon is in the worst shape of its life in the past five decades, it's not selling the larger vehicles that have been its bread and butter for years and its stock is absolutely in the tank. It's also shutting down factories as it feverishly tries to reinvent itself. After all, Madonna has done this many times -- so why can't GM?
Okay, that's an unfair comparison. But for long-term survival, companies always need plans to rapidly change with the times, even if the money needed for that flexibility conflicts with the incessant market need for quarterly expectations. After all, like we've seen this week, the market is more emotional than a 14 year-old girl. It always will be. So, what can GM do? It's hard to say, but time is of the essence. Makeover times in this age should take double-digit months, not double-digit years.
Wipe off the dribbling eye shadow, visit Neiman Marcus, and get an extreme makeover -- that's what. Since GM really doesn't have a cash pile like some other blue chip companies, can it pay for a makeover? Doubtful. Can companies reinvent themselves with marketing and image? Sure, this happens all the time.
Continue reading Makeover needed: General Motors
Posted Sep 17th 2008 3:15PM by Michael Rainey (RSS feed)
Filed under: Ford Motor (F), General Motors (GM)

So where do the CEOs of
General Motors (NYSE:
GM),
Ford (NYSE:
F) and Chrysler go when they need to turn their companies around? Are they huddled in their boardrooms in Detroit, planning sales strategies with top executives? Are they cracking the whip in their design studios as they seek to build the perfect car?
Nah. They go where every other corporate bigwig goes when there's trouble afoot: Washington, D.C., home to the world's most dependable source of capital -- the U.S. Treasury.
This week, Rick Wagoner of GM, Alan Mulally of Ford and Bob Nardelli of Chrysler are
testifying before Congress as they go fishing for $25 billion in funding to help develop more fuel efficient cars. Now that the SUV craze is over and Detroit has consumed the hundreds of millions in fat profits those trucks produced, the car companies find that they failed to save for a rainy day.
It's more than a little ironic that the one-time powerhouses of the American economy are begging the federal government for help. Major corporations have spent the last 40 years fighting government involvement in the economy -- the Big Three fought government rules requiring
seat belts, for goodness sake. And GM played a major role in defeating national health insurance decades ago, among many other sins committed in the name of maintaining the glorious free market. But when they hit a wall, the corporate powers know just where to go -- and it's certainly not to the free market. No, Uncle Sam is a far more reliable source, especially in hard times. So much for free market capitalism.
The only problem is, with the bailout of AIG among others, Detroit may not like its place at the end of the state capital line. And the Big Three had better hope that voters don't start wondering why the government is spending the limited capital of the American people on an industry that is currently dedicated to lowering the wages and eliminating the benefits of its workers.
I certainly don't want to see large American companies go out of business. I just hope that they repay the generosity of the tax-payers with something other than low wages and canceled pensions.
UPDATE: In response to a question in the comments about GM's role in opposing national health insurance, you can start reading about that shameful history in a
New Yorker piece by Malcolm Gladwell. Here's an excerpt:
In 1945, when President Truman first proposed national health insurance, they [union leaders] cheered. In 1947, when Ford offered its workers a pension, the union voted it down. The labor movement believed that the safest and most efficient way to provide insurance against ill health or old age was to spread the costs and risks of benefits over the biggest and most diverse group possible. Walter Reuther [the national president of the U.A.W at the time]...believed that risk ought to be broadly collectivized. Charlie Wilson [president of G.M.], on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.
If that's too 'liberal media' for you and you need something more academic, try
For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State (Princeton, 2003) by Jennifer Klein, a labor historian at Yale. Please send your revised analysis to me after you do a little reading . . .
Posted Aug 29th 2008 10:00AM by Peter Cohan (RSS feed)
Filed under: General Motors (GM), Politics
The New York Times reports that General Motors (NYSE: GM) wants a $50 billion bailout due to the credit crunch. It says it can't get the money it needs to build fuel efficient cars. But during the decade, when it was minting money from SUVs and trucks sales, GM could have invested those profits in fuel efficient products. Now that those profits have evaporated, it wants taxpayers to step in.
What kind of bailout does GM want? The Times reports it seeks $50 billion in government-backed loans to retool its plants to build fuel efficient cars. GM is not alone -- Detroit's automakers and the United Auto Workers (UAW) already requested Congress to "appropriate $3.75 billion to back the $25 billion in loans authorized last year." Now they want to double that amount and are "urging Congress to act by the end of September so that the money can be available next year." No doubt the industry is in trouble. The Times reports that "total sales for [August are forecast to be] 14.4 percent lower than a year ago and that G.M.'s sales [will drop] 27.5 percent."
But the economic logic for this taxpayer-funded bailout is tenuous. GM wants the government to leave it alone when it comes to fuel efficiency and it made huge profits on gas guzzlers before the price of oil shot up from $24 a barrel to $117. Thanks to GM's lack of investment in fuel efficient vehicles, its losses are soaring. Most recently it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. It wants our money to make up for its bad management. Since its current CEO, Rick Wagoner, has taken over, GM's stock price has fallen 83%. But he still has the support of GM's board.
Continue reading Does GM deserve a taxpayer bailout?
Posted Aug 21st 2008 5:25PM by Jonathan Berr (RSS feed)
Filed under: International Markets, Products and Services, General Motors (GM), Oil

With great fanfare,
General Motors Co. (NYSE:
GM) announced it was spending $500 million developing the Chevrolet Cruze, a so-called next generation compact car. Investors, who have seen the value of GM's stock slip 60 percent this year, could not have cared less. Shares of the company, which for now is the largest automaker, closed down for the day.
Granted one car is not going to revive General Motors' fortunes, but the Chevrolet Cruze clearly is a step in the right direction. For one thing, it's got a nice design though it certainly did not blow me away. The automaker clearly is trying to build on the popularity of the Chevrolet Cobalt whose sales are up 16 percent year to date. It aso underscores how General Motors is trying to be more efficient.
"The Chevrolet Cruze was designed and engineered by our global teams in Europe and Asia Pacific and will be manufactured in those regions in addition to the assembly plant here in Lordstown, Ohio," said Chief Executive Rick Wagoner in a
press release. "Our goal for the Chevrolet Cruze is to lead in fuel economy in this very competitive car segment.
But it's also taking a gamble here.
As the
Wall Street Journal points out, "The auto maker believes growing demand for nicer, well-equipped small cars coupled with a dramatic redesign for the Cruze will be enough to command sticker prices well beyond the $15,000 base price of a compact Chevrolet Cobalt."
For Wagoner to keep his job, he's going to have to sell lots of them along with the company's pick-ups and SUVs, which the company and consumers are less enthused about.
Posted Aug 1st 2008 9:39AM by Peter Cohan (RSS feed)
Filed under: Major Movement, Earnings Reports, Bad News, General Motors (GM), Toyota Motor Corp. (TM)
General Motors (NYSE: GM) posted a $15.5 billion loss in its second quarter. This was much worse than analysts had expected. With its stock opening 8% lower, GM stock has lost 84% of its market value since CEO Rick Wagoner began that job on June 1, 2000. His failure to prepare GM for high gasoline prices, as Toyota Motors (NYSE: TM) has done, makes me wonder whether GM's board is asleep at the switch.
GM's North American results were really bad. The New York Times reports it lost $4.4 billion and its revenues plunged 33% from $29.7 billion to $19.8 billion. But Wagoner has promoted cost reduction plans. In June, Wagoner announced that GM would close four assembly plants making pickups and SUVs by 2010 and cut vehicle production by 500,000. Then, on July 15, he detailed a 20% cut in "salaried personnel costs, the elimination of health-care coverage for white-collar retirees past the age of 65, and cuts in advertising and marketing budgets and capital expenditures," according to the Times.
Some Administration officials have been touting the wonders of a cheap dollar as if that will save our industries from a collapsing domestic economy. They should think again. Meanwhile, it is a testament to Wagoner's board relationships that there have not been calls for a new CEO. There is absolutely no way that GM can cut its way to prosperity. He has led GM into a situation where his choices are to cut costs or to file for bankruptcy. During the booming SUV and truck years, Wagoner could have invested the profits in energy efficient vehicles.
His failure to do so has jeopardized GM and should end his role as its CEO.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.
Posted Jul 15th 2008 11:03AM by Jonathan Berr (RSS feed)
Filed under: Major Movement, Management, General Motors (GM)
General Motors Corp. (NYSE:
GM) shares fell in early trading as Wall Street viewed the company's announcement that it plans to raise as much as $15 billion through the end of next year by suspending its dividend, cutting its salaried workforce and selling
assets with skepticism.
For one thing, who is going to want to buy the assets GE is trying to sell? For instance, sales of Hummer were down
about 60% in June. What private equity player will take a chance on buying a brand synonymous with gas guzzling as gas sells for more than $4 a gallon at the pump? Who is going to want other lackluster GM brands like Saturn? Any new owners of the business will face the same problems as GM.
Also, let's not forget the rising prices of commodities used to make cars, such as steel. Hyundai Motor Co. announced today that it was raising prices on its cars because of increased costs for raw materials,
according to Reuters. Soaring oil prices also is making the costs of plastics needed for car parts rise.
Continue reading Who is going to want the assets GM is trying to sell?
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