Fear and Loathing in Wilmington

June 7, 2005
It was standing room only as General Motors Chairman and Chief Executive Officer Rick Wagoner opened the automaker’s annual meeting in Wilmington, Delaware on Tuesday. Irate shareholders were there in force, ready to take some shots at the company's directors and senior executives. But Wagoner clearly anticipated what was coming, and cut the protestors off at the knees by launching the meeting with news of a massive cost-cutting program. As you’ll be seeing here and elsewhere, GM will be shrinking its manufacturing base by closing more plants and eliminating 25,000 manufacturing jobs.

(Oh, and by the way, some of those cuts, in places like Lansing, MI, Baltimore, and Linden, NJ., were actually already underway or even completed, so beware the numbers. The rest will not be completed until 2008.)

Announcing job cuts is a tried and true way for ailing automakers to pacify restless analysts and shareholders, and there’s no question that investors are angry, having watched GM’s sales and market share plummet, and losses mount. It certainly didn’t help when Wagoner’s deal with Fiat fell apart, costing still billions more. Yet the former college basketball star proved adept as at the podium as he once did under the hoops. Wagoner managed to absorb and deflect the criticism by cutting off comments before they turned unruly and holding the meeting to two-and-a-half hours. A few diehards were left lined up to complain into silenced microphones. But there’s no question the dissidents will be back, and if things don’t go well over the next year, GM's management won't get off as easily.

Fear and loathing, anyone?

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