GM CEO Replaced By Chief Operating Officer
March 30, 2009 by Tisa Silver
Filed under Finance
Shares of General Motors (Ticker: GM) fell 25 percent today. Over the weekend, Rick Wagoner was relieved of his duties as the automaker’s chief executive. His replacement: Fritz Henderson, the company’s Chief Operating Officer.
photo by southerntabitha, courtesy of flickr
The office of the chief executive is by far the most public and as the financiers of the bailout, members of the public have demanded accountability.
Earlier today, President Obama vowed not to let the auto industry vanish, but said that “It is a failure of leadership — from Washington to Detroit — that led our auto companies to this point.”
The penalty for failure was clear and swift for Mr. Wagoner. He announced his resignation today after working at GM for 32 years. Mr. Wagoner became GM’s CEO in 2000.
Mr. Wagoner is not the only one who will be leaving the troubled company. According to MarketWatch, about half of GM’s board members will soon follow.
Replacing the CEO with the COO didn’t seem like much of a change, but from media accounts it appears that Wagoner and Henderson are indeed different. A BusinessWeek article described Wagoner as “measured and aloof” and labeled Henderson as “fast-talking and direct.”
Hopefully, Mr. Henderson is a fast problem solver. He has 60 days to return to the government with more union cuts, less debt and a better plan.
Would you buy a car from Government Motors now? Should you call the White House with your warranty problems?
I’m not shedding any tears over Mr. Wagoner being forced out. But I am not happy with the way in which it was done. This company should be in bankruptcy with the courts forcing changes in management, the board of directors, the bond holders, and the union contracts…. not the power hungry power brokers in Washington dictating ridiculous terms to promote their agendas. This is the height of arrogance on the part of the administration, and the car makers are still in denial by refusing to accept the inevitable and letting the laws of the land work the way they are supposed to. The weak are meant to fail and reorganize…… not become political pawns for the green agenda.
I’m buying Ford bonds…… I think they have a future with the “Buy American” crowd considering how badly the government will screw up the reorganized GM and Chrysler/Fiat.
Thanks for the comment Jim. GM is in a terrible spot right now. Even if GM made great cars, no one would want to buy one from a company that may go under.
The BusinessWeek article I quoted in this post had an old quote from GM’s new CEO. About two years ago, Mr. Henderson told BW that “no brand has a God-given right to exist.” Sounds like he is more in touch with reality than Wagoner was.
I think Wagoner was pushed out because he was resistant to the radical change that might be required to put GM on sound financial footing. I listened to the new CEO’s first press conference and he certainly sounded a lot tougher and more realistic. Without radically changing their debt situation and labor costs, GM is going the way of the dinosaur. But I don’t think the politicians will let it fail, even if it means some tough love for both the company and unions.