GM Stands by Its Man

August 5, 2008
GM chairman Richard Wagoner 2008

GM chairman Richard Wagoner 2008

Despite a surprise $15.5 billion loss in the second quarter, and the drumbeat of lower truck sales and shrinking market share, General Motors' board of directors is firmly behind Rick Wagoner.

Friend of the TCC house John Stoll reports over at the Wall Street Journal today that Wagoner's leadership at GM isn't in question whatsoever, despite the dark news surrounding the company throughout the past six months. While Wagoner and his executive team carved out and implemented a recovery plan for the automaker, the world changed around them--and that's why he's in no danger, Stoll reports.

"The board is totally behind Rick, realizing nobody could deal with this situation any better than he," a source close to the GM board told the Journal. "It's a case of an excellent plan, [and] delivering on all promises."

Wagoner has survived a remarkable downturn at General Motors since his arrival in 2000. A continuing drop in market share has left GM with only about 20 percent of the U.S. market right now; at the start of the decade, GM execs were working feverishly to preserve a 28-percent share, even then a historic low.

To Wagoner's credit, the piece says, GM has cut equally historic deals with the United Auto Workers, turned around the quality of its cars and trucks, and seeded strong growth in China and other world markets outside of stagnant Europe and shrinking North America.

To give some momentum to its latest turnaround plan, GM announced last month it would cut more trucks from its production plan while it pushed ahead the launches of several new cars and crossover vehicles, including the 2011 Chevrolet Cruze; the 2010 Cadillac SRX and Saab 9-4X; the Chevrolet Equinox; and an unnamed Buick sedan that likely will replace the Lucerne in 2010.

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