GM CEO Rick WagonerEnlarge Photo
Wagoner's departure is the prelude to another round of government loans expected for GM, which is struggling to put together a restructuring package outside bankruptcy court. Last night, the Wall Street Journal and others reported that President Barack Obama asked for Wagoner's resignation in exchange for new loans that would give the automaker an additional 60 days to finish a plan to cut its massive debt by two-thirds, reach an agreement with the United Auto Workers on health and pension benefits, and finalize a plan to shut down or sell some GM divisions.
In Wagoner's place, former vice chairman Fritz Henderson, 50, will step in as CEO. There's no word on whether his appointment is permanent or temporary, as the Detroit newspapers have floated several names for potential chairmen of the company, including that of Roger Penske.
Across the table at the bailout talks, Chrysler's Bob Nardelli has apparently not been asked to resign though that company will also be given another 30 days and more operating loans to complete a deal in which Italy's Fiat will take a 35-percent stake in the smallest domestic automaker. Nardelli, a recent arrival at Chrysler under its latest owners Cerberus, is an ex-Home Depot veteran who has kept a lower profile during his tenure as Chrysler tries to cut and cleave its way back to financial health.
Wagoner's resignation will have little effect on the new GM plans for restructuring, according to David Cole, the chairman of the Center for Automotive Research in Ann Arbor, Mich. Cole tells the AP that "I don't think you would see any shift or significant change at all with Rick's leaving. I think the course they're on, they're on."
So why the resignation? Wagoner's tenure framed a massive slide in GM's market share to its present 18.3 percent, and also, ironically, included a $2 billion payoff to Fiat for a failed partnership. Wagoner also fast-tracked the current generation of GM full-size SUVs and pickups over smaller, more efficient vehicles--a move that's been lampooned as out of touch. However, until gas prices soared in mid-2008, GM's big trucks turned in vast profits that helped keep the company afloat, particularly while it recrafted its car lineup and engineered award-winning vehicles like the new Chevrolet Malibu and forward-thinking efforts like the 2011 Chevrolet Volt plug-in hybrid.
In political terms, Wagoner's a convenient fall guy for the Administration as it threatens automakers with a forced Chapter 11 bankruptcy filing if restructuring deals are not reached very soon.
Unfairly or not for Wagoner, the ex-Duke basketball player's tenure at the helm of GM effectively ended on the day his beloved Blue Devils bowed out of this year's NCAA men's basketball tournament--far shy of the results either had hoped.
GM Statement On Officer And Board Announcements
GM is announcing the following changes in the corporate officers and the board of directors:
Rick Wagoner is stepping down as chairman and CEO, effective immediately. Wagoner, 56, was named president and CEO in 2000, and assumed the role of chairman in 2003.
Fritz Henderson, GM president and chief operating officer, will serve as CEO. Henderson, 50, was named to his current position in 2008. He was previously vice chairman and chief financial officer.