Good Bye Rick

[Charles D. Barnette]

"Obama forces GM chief out" are today's headlines. After a 31 year career, GM CEO Rick Wagoner must resign if the rescue plan is to continue. At the Detroit Auto Shows, Rick was treated like a "Rock Star" by the media. Is his departure a good thing or a bad thing for GM and Cadillac? Charles D. Barnette

[Guidematic]

Purely and completely politically motivated.

Mike

[Rich S]

News reports also indicate a "majority of the General Motors Board of Directors will be replaced." It seems that there is a double-standard from our elected leaders:  millions in government bail-outs to AIG, yet the AIG executives remain and collect millions in bonuses with lavish executive retreats. Now, to save an industry that has been the backbone of our economy, the CEO and Board must step down, as condition of the government bail-out? It seems this is a highly irregular business intervention, and to consider the idea of a GM bankruptcy, there will be serious repercussions--as GM suppliers, most of whom survive by making parts primarily for GM, would not get paid, and they would be largely harmed. This news certainly changes the likelihood that Cadillac may ever build any future products that are desirable to the members of the CLC. Expect a much leaner GM, with many eco-friendly, economy models, dominating the line-up. 

[Rusty Shepherd CLC 6397]

GM CEO Rick Wagoner Is his departure a good thing or a bad thing for GM and Cadillac? Charles D. Barnette

A bad thing.

[Otto Skorzeny]

 "Brother, you asked for it!"  Ayn Rand


Welcome to the new fascist state of America. Private businesses under the control the government. It makes me want to vomit.

[Sweede64]

Better of chapter 11, autoindustry seems to be the root of all evil...... whos gonna run GM now? Some enviromental fahcist....

[Otto Skorzeny]

Better of chapter 11,

I agree. Bankruptcy is the only way yo save GM. Wagoner should have pulled that rabbit out of his hat and told the Big O to take frigging hike.

[Jim Garner]

It is a worse thing for the country than it is for GM. It is a power grab for this egomaniacal dictator wannabe. A very bad precedent, but the one you owe money to calls the shots. GM should have filed bankruptcy to begin with and saved themselves and the taxpayers a lot of money. The whole bailout mess stinks and I doubt any good will ever come of it.
Jim

[Mike Josephic CLC #3877]

The last time anything like this happened was in 1943 when FDR considered relieving
Henry Ford of his post.  He decided not to do it in the end.  However, that was in the
middle of WWII and the concerns were about organizing production to meet wartime
needs.

Like others here have already said, the "Big O" seems to have a real Napoleon complex
and seems to think he knows everything -- and better than anyone else.  That's
a dangerous mindset in a world leader. Rick, unfortunately, was sacrificed for political reasons. 
I think the decision was really stupid, as his insight could have been used to bring GM back -- he certainly knows where the problems are at after 31 years.  But then, I'm sure our government will appoint a "car czar" to solve all these problems.

[Jim Salmi #21340]

It goes to show you that if you make a tangible, understandable product and screw up, you stand a chance of not getting bailed out, no matter how big you are.  If you contaminate the entire world financial system marketing useless, incomprehensible "products" that no one needs or understands, you are guaranteed a blank check from the U.S. taxpayer. 

The lesson now will be that every hardware store and Chinese restaurant needs to form a finance arm and sell derivatives.  Make sure that your death will take a many others with you, and you be protected.

I'm no fan of GM management (as a long term stockholder) but it is amazing how much trouble they have getting support, when the feds are throwing money at AIG in $60 billion gobs like they were beads at a Mardi Gras parade.

Jim

[Gunnar]

According to legend, the AIG business is simple: the big European banks invested heavily in AIG.
If AIG goes, so does the European banking system.
That's why the fed keeps them afloat.

[Bill Gauch #23121]

I have mixed feelings about this. We (the government) should never have given money to bail out any company. Vanderbilt must be rolling over in his grave. That said, generally, people get entrenched and can't see the forest for the trees. Being close to or part of the problem makes it difficult to find or be part of the solution.

Personally, I think GM should reorganize and split up its major functional components. I'd be willing to bet that they could spin off companies who would perform better alone than part of the whole. At the very least, I think one thing that is hurting current sales is the lack of faith in a warranty. Why doesn't GM spin off a warranty company and sell those separate? Honestly, would you buy a $50k car without a warranty? And if you would, wouldn't you prefer that it were a $48k car?

I could see spin offs of a finance company, electronics, and mechanical assemblies. The remaining car manufacturing could focus on designing cars according to what people want. The parts companies would be able to sell to any manufacturer. It's much easier and cost effective to buy and integrated off the shelf parts than to engineer your own. Look to the hot rod/street rod world for inspiration. A pile of parts can be turned into a working car. In some cases, it can even be done piecemeal for less money than a new car costs.

[Otto Skorzeny]

The last time anything like this happened was in 1943 when FDR considered relieving
Henry Ford of his post.  He decided not to do it in the end.  However, that was in the
middle of WWII and the concerns were about organizing production to meet wartime
needs.

Interesting that you mention that. It was, in fact, General Motors that forced the resignation of Henry Ford in order to save Ford Motor Company during WWII.

At that time, Henry Ford was senile and under the control and influence of a thug by the name of Harry Bennett. Bennett was little more than a gangster who ran the company to suit himself and nearly destroyed the company. Ford was even beaten out by Chrysler in sales just before the war started.

GM knew that if Ford went out of business, it would take the entire US economy down the drain with it.

Former VP of Chevrolet, William Knudsen, was able to pull some strings and have Henry's grandson Henry Ford II (Edsel's son)  discharged from the Navy and brought back to run Ford.

After the war ended, Henry II and Henry's wife Clara combined their voting shares to force Henry Ford out of the company and Henry II in. HenryII  then fired Bennett.

[The Tassie Devil(le)]

Rick, unfortunately, was sacrificed for political reasons.  I think the decision was really
stupid, as his insight could have been used to bring GM back -- he certainly knows where
the problems are at after 31 years. 

But, if his insight was so good, why was GM allowed to get so down in the dumps in the first place?

Bruce.

[John Tozer #7946]

Bruce,

You are far too cerebral for me!

Can I just ask what a "Section 11" bankruptcy would achieve for GM? Isn't that where PanAm and Continental (remember them?) went at one stage?

GM relies heavily on independent suppliers now (Ford in the 1940's isn't an analogy because Ford either made or controlled every component input to their vehicles in those days), many of them are now based "off-shore" who simply won't supply unless there is security of their payment. As I understand a section 11 bankruptcy, you as an independent supplier are not guaranteed payment to the extent that, particularly now, lending institutions to those independents will accept and lend you the money you need to operate your business. Unfortunately, it only takes one supplier of the reverse threaded screws in the left hand widgets that go into every front end of every car to refuse to supply because HE can't get finance and you bring an entire production line to a screaming halt.

I liked the idea on the British top-rating show "Top Gear" last night when they drove (and loved) the Cadillac Sixteen (very rare for the Poms to love anything west of the Isle of Man)! Ring Elton John and all those other mega-rich b_____ and tell them to ring all their friends to ring GM and the US government to say "Build that Mother and we'll buy it!"

Something similar worked with the V16 in 1930!


John Tozer

[The Tassie Devil(le)]

I too watched the Top Gear and loved seeing the "Sixteen" being driven around and seeing all the features that were never shown in any other pictures I saw if it.

James May must be one of the luckiest peoiple in the world to have been able to drive it without any passengers.

The report they did on the car did Cadillac proud.

Bruce.

[Edward Kenny]

Hmmmm.... let's see....

If you just laid out a lot of cash in the name of the US in order to save a company whose stock value had dropped 95% since 2000, would you keep the man who ran the company during that stock drop in place??

I think not.

I'm surprised that the stockholders didn't want Rick's head on a stick.

[Jeff Maltby 4194]

Much like the 1940's Bing-Hope 1940's Road Flicks. We're Morocco/China Bound x pi, but nobody saw it coming ?

[Mike Josephic CLC #3877]

But, if his insight was so good, why was GM allowed to get so down in the dumps in the first place?

Bruce.

I'm not defending the guy, just playing a little "devil's advocate".  He was the CEO during a time when many problems arose and the business was under pressure from all sides -- the government, the UAW,
the environmental "green people", the off shore competition, etc.  You assume since he was CEO
that he had the absolute power to control all of these issues.  He didn't -- there were stockholders, Board of Directors, etc.  He was chosen to have his head axed as a "figurehead" and for political reasons.
I've seen this first hand in industry -- there always has to be a "fall guy" when things go wrong.

I'm not feeling sorry for the guy -- he's leaving with a $23 million parachute.  But, the fault does not
lie just with him.  His Board Members and their subordinates went along with it and are equally to
"blame" for the situation GM is in now.

However, what do you suggest?  Should the government fire them all and appoint their own political
hacks to run the company?  That, in my opinion, would be a total disaster and the end of GM as
we know it.

[Bob S]

I am totally against the government forcing the CEO and some Board member out! The stock holders own the company and has the right to do so.  Not our Government!  WE are the USA not some socialist country.  If this pisses you off write, call or E-mail the President and your Congressman and Senators!