GM CEO Rick Wagoner
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.
Kent Kresa, chairman emeritus, Northrop Grumman Corporation, has been named interim non-executive chairman of the board of directors. Kresa became a GM director in 2003
GM is awaiting further announcements by the President and the Task Force on Automotive Reconstruction, and we will have additional comments at that time.
GM Board of Directors statement, attributable to Kent Kresa, Chairman
“The Board has recognized for some time that the Company’s restructuring will likely cause a significant change in the stockholders of the Company and create the need for new directors with additional skills and experience. The Board intends to work to nominate a slate of directors for the next annual meeting that will include a majority of new directors taking into account the addition of new directors, retirement, and decisions by individual directors not to stand for re-election, although the specific individuals who will be nominated or choose not to run or leave the board are not yet known.”
GM Message From Rick Wagoner
On Friday I was in Washington for a meeting with Administration officials. In the course of that meeting, they requested that I “step aside” as CEO of GM, and so I have.
Fritz Henderson is an excellent choice to be the next CEO of GM. Having worked closely with Fritz for many years, I know that he is the ideal person to lead the company through the completion of our restructuring efforts. His knowledge of the global industry and the company are exceptional, and he has the intellect, energy, and support among GM’ers worldwide to succeed. I wish him well, and I stand ready to support him, and interim Non-Executive Chairman Kent Kresa, in every way possible.
I also want to extend my sincerest thanks to everyone who supported GM and me during my time as CEO. I deeply appreciate the excellent counsel and commitment of the GM Board and the strong support of our many partners including our terrific dealers, suppliers, and community leaders. I am grateful as well to the union leaders with whom I have had the chance to work closely to implement numerous tough but necessary restructuring agreements.
Most important of all I want to express my deepest appreciation to the extraordinary team of GM employees around the world. You have been a tremendous source of inspiration and pride to me, and I will be forever grateful for the courage and commitment you have shown as we have confronted the unprecedented challenges of the past few years. GM is a great company with a storied history. Ignore the doubters because I know it is also a company with a great future.