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GM CEO Rick Wagoner Resigning Upon Obama's Orders

From The Detroit News:

General Motors Corp. Chief Executive Officer Rick Wagoner will step down after heading the largest U.S. automaker for more than eight years, a person familiar with the situation said.

GM declined to comment and it was not immediately clear who would succeed Wagoner or if Wagoner's departure was a condition set by the government for further assistance to the struggling automaker.

According to the AP, Wagoner's resignation is effective immediately.

According to The Politico, Wagoner is stepping because Obama demanded it:

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

The White House confirmed Wagoner was leaving at the government's behest after The Associated Press reported his immediate departure, without giving a reason.

On Monday, President Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler.

Industry sources had said the White House planned very tough medicine, which turned out to be an understatement. And it went to the very top. The measures to be imposed by the government will have a dramatic effect on workers, unions, suppliers, retirees and the communities where plants are located, the sources said.

This is a disaster waiting to happen. General Motors would be better off declaring bankruptcy than accepting any plan by this inept, incompetent White House. For Pete's sake, this administration can't even distribute the tickets to the White House Easter Egg Roll competently.

Update: Obama said this about GM on today's Face the Nation:

"Everybody's having problems, even Toyota and other very profitable companies," Obama said on CBS's news show "Face the Nation."

"We think we can have a successful U.S. auto industry," he said. "But it's got to be one that's realistically designed to weather this storm and to emerge at the other end much more lean and mean and competitive than it currently is.

"And that's going to mean a set of sacrifices from all parties -- management, labor, shareholders, creditors, suppliers, dealers," Obama said.

"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.'"

Yes, that's called Chapter 11.


Exit question: Ever get the feeling that Obama's not quite the centrist pragmatist Christopher Buckley thought he'd be?


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Comments (37)

this is a MONSTROUSLY bad e... (Below threshold)

this is a MONSTROUSLY bad expansion of Obama's "powers".

as I posted over at BeJohnGalt:


Resign because it makes sense, be forced out because THAT would make sense...but resign because OBAMA asks you to?

If it seems quieter, folks, it's because those nasty SLIDING and SCRAPING noises have ceased. Why? Because we're not on a "slippery slope" any more...we've gone off the cliff!

see how much more peaceful it seems now?

Could be we'll get ... (Below threshold)

Could be we'll get to see what a nationalized auto industry looks like.

This should be fun.

Change we can believe in!<b... (Below threshold)
Dave W:

Change we can believe in!
Change we can believe will result in some kind of weird Orwellian world of a tyrannical dictator.


Yes. Next it will be "Will... (Below threshold)

Yes. Next it will be "Will no on rid me of this troublesome CEO?"

Er, "Will no ONE rid me..."... (Below threshold)

Er, "Will no ONE rid me..."

I note that they are maki... (Below threshold)

I note that they are making the CEO fall on the sword, but no mention is made of the UAW and concessions - the real source of the problem. I guess it's a matter of making everybody *feel* they did something useful, and really cracked the whip, but not actual accomplishing anything.

"...but no mention is ma... (Below threshold)
George Author Profile Page:

"...but no mention is made of the UAW and concessions - the real source of the problem."

Exactly right.

Obama is driving our country into bankruptcy. Perhaps he should resign.

Oh, this is going to be fun... (Below threshold)

Oh, this is going to be fun! What next, the head of the UAW or some DNC political hack gets appointed to head GM?

What next, the he... (Below threshold)
What next, the head of the UAW or some DNC political hack gets appointed to head GM?

Or, in other words, as I mentioned the other day, the workers control the means of production. With guidance from the ruling elite, no doubt. Five-year-plans, perhaps?

Say one thing about these guys, they are certainly predictable. Nauseatingly predictable.

Sorry to follow up my own p... (Below threshold)

Sorry to follow up my own post, but, I also predict that the UAW will be publicly called to provide concessions, which they will grudgingly comply. Trivial concessions, but sufficient to provide symbolic cover for the fact that absolutely nothing consequential is conceded. Theater!

Even if GM, Chrysler and Fo... (Below threshold)
Mac Lorry:

Even if GM, Chrysler and Ford were to go extinct we would still have a strong U.S. auto industry. Toyota has 11 manufacturing plants in the U.S. Honda also manufacturers vehicles in the U.S. In fact their Odyssey minivan has 70% U.S./Canadian parts content and is assembled in Lincoln, Alabama. That's as much domestic content as many models manufactured by the Detroit three.

Some argue that the profits go overseas, but that's not the case. Toyota (TM) and Honda (HMC) are both publicly held corporations and traded on the New York stock exchange (Honda since 1976 and Toyota since 1999). Like any publicly held company the profits ultimately go the shareholders, so profits go to Americans in proportion to their ownership of the stock. GM is also publicly held and they have shareholders all around the world, so their profits (and losses) go overseas as well. Not along ago Chrysler was mostly owned by Diamler and now it's 35% owned by Fiat, so how is it a demostic company?

Obama's goal is not so much to save American jobs, but to save union jobs.

The difference between God ... (Below threshold)

The difference between God and Obama is that God doesn't want to be Obama.

This should surprise no one... (Below threshold)

This should surprise no one. Obamalala is going to pay back the UAW, among others, regardless of the cost to the country. Remember, he won.

"When seeking office, the aspirant must pretend to be what he is not. After seizing power, he should impose his agenda quickly and ruthlessly before his subjects realize what he is doing and have time to react."

Sound familiar? It might, but this approach was designed 500 years before the Barack Obama campaign in 2008.
Read the rest at the link. Interesting.

Now he needs to force Ron G... (Below threshold)

Now he needs to force Ron Gettelfinger out. Bluegrass Pundit

So you folks think GM shoul... (Below threshold)

So you folks think GM should just take a bailout from the taxpayer and carry on as before?

If you take government money, you become a government employee. If you don't like it, don't take the money. If you can't survive without government money, declare bankruptcy.

Did Rick Wagoner do the right thing and declare bankruptcy? No. He asked for a government bailout.

The only question is why the government didn't force out Pandit, Lewis and the fools who took government money at the big banks.

Elrod: "If you take gove... (Below threshold)

Elrod: "If you take government money, you become a government employee."

I guess all those who took the moeny are now Obama's "bitches"...right?

Only Obama and Geitner (or however you spell it) now want to authority to control EVERY company in America!

Remeber, when pressed for a definition, BEFORE CONGRESS, as to:
(1) what constituted a "threat to the economy" if they failed
(2) what constituted "a company in danger of ailing"
(3) how "control would be taken and potentially released"
Geitner could answer NONE of these questions!


Scared yet? If not then you are either not paying attention or are a Communist. The only two options!

"The measures to be imposed... (Below threshold)

"The measures to be imposed by the government will have a dramatic effect on workers, unions, suppliers, retirees and the communities where plants are located, the sources said."

Sure they will. I'm sure the WORKERS and UNIONS are next on Obama's target list. Yeah.

Of course the successor to ... (Below threshold)

Of course the successor to Wagoner will be an Obama loyalist who will have either no idea of how to run a company, or who has lived solely in the government/academic arena where making a profit and controlling costs is only a quaint theory.

So you folks think... (Below threshold)
So you folks think GM should just take a bailout from the taxpayer and carry on as before?

Of course not. But meddling by symbolically removing the CEO, and not demanding something that will really help (i.e. massive concessions by the union), is pointless, is another example of simply playing to the crowd. Certainly Obama and his company of class/race warriors, tax cheats, and smirking frat boys are not competent to run it themselves. It's not like the CEOs of the auto companies don't know what to do, it's that they aren't able to do it.

There wasn't even an offram... (Below threshold)

There wasn't even an offramp for "Socialism"...with this move the next stop is "Communism"

Overreacting? Most likely not reacting enough!

April 15 is Tea Party. Find one and attend. Sooner or later "The One" is gonna shut dissent down completely...better enjoy it while you can!

April 15 is Tea Party. F... (Below threshold)

April 15 is Tea Party. Find one and attend.

Get a job, hippie.

Brett: ah yes, smirking fratboys. It's fine if the President is one, but not if he employs them.

Fascism comes to American g... (Below threshold)

Fascism comes to American government, courtesy of the "I won".

I would have told Him to go... (Below threshold)

I would have told Him to go to hell. In fact I will do it for Him.

Obama, go to hell.

Brett: ah yes, smi... (Below threshold)
Brett: ah yes, smirking fratboys. It's fine if the President is one, but not if he employs them.

Brilliant reposte'! Completely irrelevant to the topic at hand, of course, but keep trying, you will understand someday, perhaps.

Watching Geraldo on Fox, an... (Below threshold)

Watching Geraldo on Fox, and he's giving the news about this. He mentioned that GM will have 60 days to reorganize and get however much billions, and Chrysler will get 6 billion and 30 days to restructure or get more investors (they floated that Fiat might want to increase their share of 35%).

One observation though, if it were YOUR money to invest, or business trying to merge with... would YOU want to get involved with either company now that the gov't has made damned clear that they'll put their hand in and muck things up whenever they darned well please? I sure wouldn't. One of the major reasons I left gov't employment was because I was so sick and tired of all the damned oversight and second guessing done by the "higher ups" though the "higher ups" were never in the trenches seeing what actually had to be done.

Why oh why would THIS be any different?

"So you folks think GM s... (Below threshold)

"So you folks think GM should just take a bailout from the taxpayer and carry on as before?"

I didn't even bother reading past that point. Could you be anymore disingenuous?

Marc's got it right. With the government's hand in there I wouldn't invest one thin dime.

Doh, I meant ExSubNuke. So... (Below threshold)

Doh, I meant ExSubNuke. Sorry bout that.

If Obama was so displeased ... (Below threshold)

If Obama was so displeased with the way GM was being run, why didn't he and the Dems in Congress insist that GM change its leadership BEFORE loaning the billions? Also, the money is a loan, not a purchase of controlling interest in the company. A POTUS who has never run a business, and whose only experience is running for election, now believes himself able to run companies as large and as complex as GM. To top it off, he now wants to replace the entire board of directors and replace them with who he wants as directors. If he appoints GM directors the way he chooses members of his cabinet, GM won't last another three months.

What about making the union... (Below threshold)

What about making the unions reduce the inflated benefits they receive? ww

I don't see any way out of ... (Below threshold)
Mac Lorry:

I don't see any way out of the mess GM and Chrysler are now in simply because they got into this mess with short term thinking and I don't see that changing. Top management in the U.S. is driven by short term profits while top management in Japan is driven by market share. The short term profits goal leads to buzzword driven manufacturing strategies such as just in time inventory, high density and lean manufacturing, but with no deep understanding of how these methods work or how and why to apply them. The short term profit goal results in bean counters rising to positions of top management rather then engineers, logistics, quality or manufacturing experts taking the helm.

The market share goal leads to a focus on producing products that satisfy the customer better then competing products. Such companies invest heavily in engineering, research, logistics and quality manufacturing methods. If you have never done so, pick up a copy of Consumer Reports annual auto issue (on sale now) and read it. You'll soon understand why GM and Chrysler are failing and the only way to save them is to somehow replace the short term profits goal with the market share goal. Oh, and fire the bean counters who have migrated out of the accounting department.

Hermie -"If he ... (Below threshold)

Hermie -

"If he appoints GM directors the way he chooses members of his cabinet, GM won't last another three months."

You and I see that as a bug. I think Obama sees that as a feature. Crash GM, rebuild it as a 'state-owned' business, and you end up with the unions being obliged to support you in perpetutity.

The real question I've got is - why does ANYONE think the government can find people who can run a major business at a profit? (Then you wonder - is running the business at a profit even seen as NECESSARY?)

More and more it's seeming like we've gotten dropped into a crappy political-economic piece of fiction, not only isn't the plot clear but the major characters are showing very few signs of either understanding the problem or having the talents to solve them - OR the inclination to find out just what's needed to take care of the problem. They're too busy staying elected by pandering to constituent interest groups to see just what they're doing - but they don't seem to either realize or care that a real economic collapse is going to take out THEIR luxuries and perqs pretty damn quick.

Mac -Went out this... (Below threshold)

Mac -

Went out this weekend to find a new replacement for an aging minivan. (Thought about buying used - but even with a fleet vehicle you're really not sure what you're going to be getting maintenance wise.)

Specs were - needs to be able to tow a minimum of 3500 lbs, and be what we considered 'affordable'. 3rd-row seating very desirable, but not essential, given sufficient thought to 'affordability'. No pickup trucks need apply.

Chrysler's Aspen was considered - but the local dealer didn't have much in stock and it was too expensive considering fit and finish. Salesman didn't offer to search for anything in the area that would work. No idea when they'd get something in, didn't seem concerned about it. Saturn VUE? Nope. Saturn Outlook? Didn't feel good, fit and finish weren't there, and too expensive for the perceived value. There weren't ANY GM products available that were within striking distance of our criteria. Might have been able to swing a good deal for a Hummer H3, but... no third row seating and I'd need a friggin' stepladder to get my aged parents into it.

Wasn't really much of a surprise on the availability, to be sure. When you've got a company about to go under, making product isn't going to be a high priority. Making affordable product will be even less. And the salesman attitudes were "Buy it or not, we don't really care." We seemed to be an annoyance to them, not potential customers.

Ended up looking at a Kia 'Borrego', and it's a heck of a lot more for a lower price than any comparable GM product. (Even beat Honda, Nissan, and Toyota..) AND the salesman wanted to make a sale - that was more than the GM folks seemed to want to do. We'll be seriously considering them.

I'd rather buy American - but when the product just doesn't match up in quality or price, I'm not going to downgrade or pay more just for a nostalgic attachment to the GM that USED to be, but seems to be no more...

Seems to me His Majesty has... (Below threshold)

Seems to me His Majesty has another non-tax paying stumblebum in the shadows shouting ""I am collecting on the one you owe me", hence the GM main slot. This chair can be filled without congress approving. Go Figure

Jlawson,The Kia Bo... (Below threshold)
Mac Lorry:


The Kia Borrego is certainly able to meet your towing requirement and has third row seating. It uses traditional body-on-frame construction, which is also good for towing and hauling, but adds a lot of weight compared to unibody construction, which may mean lower mileage.

The Borrego is new so there's not much long term reliability data, but as a brand Kia is ranked as 10th by Consumer Reports just above the highest ranked American brand "Lincoln" for reliability. BTW, Saturn is ranked next to last just below Chrysler and just above Land Rover.

I used to buy Dodge and thought it was normal to have to fix lots of things after three or four years. Then I started reading Consumer Reports (CR) and found that Dodge is one of the worst brands in terms of reliability and the problem areas CR reported matched my own experience. On page 84 of the April 2009 issue of CR there's a graph based on annual subscriber surveys for the last ten years (1.4 million subscriber surveys in 2008) that shows that the average 10 year-old Toyota has the same reliability as the average 4.5 year-old Chrysler (which includes Dodge).

If you buy a new vehicle every 3 years, then long term reliability is not all that important other than it effects resale value. Anyone who keeps vehicles longer than three years should get a hold of the April issue of CR (April is the annual auto issue). You can also subscribe on-line at http://www.consumerreports.org

Anyway, congratulations on your new Kia Borrego.

Interesting tangental subst... (Below threshold)

Interesting tangental substory, that plays into this "gov't run business" stuff. While in the Navy, I had the opportunity to go to a couple different Navy bases and shipyards. 2 of the ones I'd been to were San Diego, and Portsmouth (VA). They were 2 shipyards that actually turned a profit for the gov't (a rarity).

Take a wild guess at which of these remained open and which were closed during the course of the various BRAC's? Both of them. And non-profitable shipyards were kept open... mainly because of better lobbying and congressional district representation for the other shipyards.

My view is very skeptical of GM or Chrysler turning a profit while the Gov't is pulling the strings. VERY skeptical.

Mac - The Borrego ... (Below threshold)

Mac -

The Borrego (I call it the Burrito and my wife hits me...) is relatively new, but it's been out since last August. Couldn't find sales figures for last year, but there were over 700 sold here in the US in Jan and Feb.

I looked HARD on-line for any horror stories, and couldn't find one. (Which doesn't mean all that much.) Found a LOT of complimentary stuff, reviews, and it was even a Kelly Blue Book 'Deal of the week' - so I'm thinking it'll at least last out the payments!

God knows what sort of garbage we'll be getting from GM soon...

Hey, finally found a bad re... (Below threshold)

Hey, finally found a bad review - in a Detroit newspaper!

Nah, no possibility of bias there!






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