Obama to GM CEO Wagoner: You're fired!
Filed under: Company News
Last fall, I suggested that General Motors Corp. (GM) ought to follow a six point restructuring plan. One of those steps was to can GM's CEO Rick Wagoner. Under his tenure, which began in 2000, GM's stock has lost 95 percent of its value and GM has posted $30 billion in 2008 losses while presiding over a North American market share slide from 33 percent to 19 percent. What amazes me is that GM's board did not step in years ago. So as part of the restructuring plan, President Obama has officially asked Wagoner to step aside.
Regrettably, getting rid of Wagoner leaves an important question unanswered: Who is willing to step into GM's CEO position who is clearly better able to fix the problems that ail GM?
It is far easier to fire the person who made the mistakes than it is to find the right person to fix the problems. For that job, I can think of one person who has a successful track record of turning around companies in deep trouble -- Lou Gerstner, who brought International Business Machines (IBM) back from the brink in the 1990s.
In the meantime, GM is poised to get more government billions to keep it afloat. I am confident that getting rid of the CEO who got GM into its current condition is a good move. And it probably helps deflect the criticism heading towards the White House as it unveils additional billions for GM. But unless the next CEO who comes into the job actually starts to remedy GM's problems, it will be far more difficult to defend the next government handout GM demands.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He has no financial interest in the securities mentioned.
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Reader Comments (Page 1 of 1)
3-30-2009 @ 11:01AM
Scarol said...
Obama will put Tim Geithner in charge of running all the private enterprise in the country now; they can hire or fire at will and according to who is willing to give them kickbacks. We are now officially a dictatorship, no longer a free country. We were taken over by the two biggest crooks in the nation, Obama and Geithner.
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3-30-2009 @ 6:07PM
Jim said...
I am with you, since when can our government fire people in private companies? This whole thing is a farce...
If it look like fish and smells like fish, it is proabably fish or socialism.
3-30-2009 @ 11:00AM
Scarol said...
Amazing that a man who has never as much as run a lemonade stand and has been in office for 3 months can fire a company executive who has been in the business for 32 years. Obama is a flaming idiot and his cabinet are crooks. They all need to be investigated and thrown out.
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3-30-2009 @ 12:01PM
adam hartung said...
This is what happens when you lose your position as #1. It doesn't take long for people to start envisioning a world without you. GM started on the road to irrelevant years ago by focusing internally rather than on the market - missing all major shifts and becoming also-ran. Obama's team is telling everyone (auto and banking) that if you can't prove you know where the market is heading and demonstrate you can get back in front, then there's little reason to support you. Read more http://www.ThePhoenixPrinciple.com
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3-30-2009 @ 8:27PM
Doug said...
"a man who has never as much as run a lemonade stand " -Scarol
I don't know what rock you've been hiding under, or in what inbreeding state it is in... But, didn't you ever wonder where the title "senator" Obama came from before "President" Obama?
" Obama is a flaming idiot and his cabinet are crooks" - Scarol
Have you not been paying attention again? Maybe we shnpould put Bush and Cheney in office again and see how fast we either come to WW3 or the country tanks so hard we don't get back up. You should really look at who you're rooting for here and think about who you're calling names.
The new administration inherited 8 years of absolute mess from the "flaming idiots and crooks" who tore our country to shreds both economically and otherwise. Now the new administration working to fix the old mess so we can survive as a country in this world and we have people like you ready to call names and criticize their work after only 3 months.
You think you could do it better? Maybe you should run for president in 2012... oh, but you better start your lemonade stand now so you can at least say you have experience running that...
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