One of the chief architects of the last 8 years at GM – CEO Rick Wagoner – has reportedly stepped down as a preface to President Obama’s statement on the reconstruction of the motor industry, which is due tomorrow.
From Automotive News:
General Motors CEO Rick Wagoner is about to resign after eight years as the Obama administration prepares to decide on the automaker’s request for additional government rescue loans, two people familiar with the matter said.
A senior Obama administration official told NBC’s John Yang that Wagoner, 56, was asked to step down by the White House.
The automaker, which has lost about $82 billion since 2004, awaits word Monday from President Obama on a request for as much as $16.6 billion in additional U.S. aid. GM, surviving on $13.4 billion in U.S. loans received so far, has failed to clinch needed concessions from bondholders and the UAW that government officials had set as targets to justify further aid.
Obama said in an interview broadcast today that GM and Chrysler LLC had not done enough yet to become “lean, mean and competitive” under federal oversight.
Obama, who appeared in a taped interview on the CBS-TV news program “Face the Nation,” said the automakers had more work to do to reduce costs in the face of slumping demand.
“We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge … much more lean, mean and competitive than it currently is,” Obama said.
“That’s going to mean a set of sacrifices from all parties involved — management, labor, shareholders, creditors, suppliers, dealers. Everybody’s going to have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road,” he said.
Obama added: “They’re not there yet.”
The Associated Press said Wagoner will leave immediately. The story was first reported by Bloomberg News.
Wagoner came under fire for his stewardship of GM late last year when U.S. lawmakers debated a bailout for the automaker. He had repeatedly said that he intended to stay on, and GM’s board has offered unanimous support for him.
A GM spokesman declined comment.
Today’s my birthday.
One might think I’d see this as a nice little birthday present, but in truth, I’m a bit sad for Wagoner. I think he’s probably being made to be a scapegoat here by an administration that’s trying to look like they’re all about taking action.
If there’s one thing GM need at the moment it’s stability at the top and whilst Fritz Henderson will probbly make a good replacement, I don’t think Wagoner’s deserving of the large slice of blame that he’ll get for this.
Wagoner always made sense when he spoke, which is more than what you can say for many of his cronies. Still, GM’s share price has dropped around 95% since he took over, so I suppose that says more than any of Wagoner’s eloquence. At the end of the day, the buck should stop at the top.
The big question now is what a change at the top will mean for GM’s ongoing obligations with Saab, and perhaps even more immediately, whether the Obama administration will try and force more action by way of a structured bankruptcy proceeding.
An announcement like this one hints at big things coming.