Pressure Builds For GM To Oust CEO As Part Of Auto Bailout

UPDATE 12/07 at 9:00PM EST:

In addition to Dodd's statements this morning, there is growing outside pressure for GM CEO Rick Wagoner to step down.

The Wall Street Journal reports:

But calls for Mr. Wagoner to step down appear to be growing. In a statement from his office Sunday, Sen. Charles Schumer (D., N.Y.), said that, "while it can't happen tomorrow because of the urgency of the companies' financial situation, I would like to see management changes as part of any restructuring."

On Sunday, Jerome B. York, an adviser to billionaire investor Kirk Kerkorian who served as a GM director in 2006 when Mr. Kerkorian owned a stake in the company, called publicly for sweeping change at GM.

"Aside from a failure of leadership at the most senior executive management level, GM has five long-serving directors who have been on the board 10 years or more," Mr. York said in a telephone interview. "They have approved of and overseen many of the moves that have contributed to the company's troubles. They should also resign."

Possible successors for Mr. Wagoner could include GM President Frederick "Fritz" Henderson, who took over responsibility for GM's auto operations from Mr. Wagoner earlier this year. Outside replacements could include Nissan Chief Executive Carlos Ghosn. With the right personal financial incentives, Mr. Ghosn might accept, suggested Jeffrey Sonnenfeld, an expert on CEO turnover and a senior associate dean at Yale University's School of Management.

Sen. Chris Dodd (D-Conn.) said that Rick Wagoner should step down as chief executive of General Motors as part of any government-supported restructuring process.

"I think he has to move on," Dodd said on CBS's "Face the Nation".

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Dodd has been working over the weekend to craft a roughly $15 billion
auto bailout package that would carry the Big Three through March of next year. The automakers requested $34 billion from Congress last week.

Dodd said the smaller, short-term package would give lawmakers more time to consider a government oversight board or an administrative process to oversee the restructuring of the industry.

"There is a lot of reason to be furious," Dodd said about the industry and its pleas for federal aid. "But there is a lot more at stake than just Detroit. If this were just about Detroit, I'd let them fail in a New York minute."

Read full story here.

-OR-

Watch a clip of Dodd on "Face the Nation."

Comments

[richardmcnoggin]

Hey all you commie dems; why dont you just call for the execution of these CEO types like they do in Obama's favorite country.. China..

[geobushono]

OK . Execute them.......anything else?

[Bettysdad]

This is what happens when you have money men running consumer products companies.

The Big 3 are all run by money men, not car guys.

Great restaurants aren't run be accountants.

Give the designers, engineers and marketers free rein, and cars Americans want will appear in showrooms, and be bought.

[stayoutofmybusiness]

As for the Big 3 being run by money men, take a look again, Wagonner has been with the company since the 70's. Previously other execs were indeed "car guys" and they weren't as successful given the current conditions. HOWEVER, all publicly traded companies are held accountable to investors.... who ARE money people. If a product isn't selling (regardless on how "green" it is); why should they continue to invest for negative returns.

As for restaurants... unfortunately, good restaurants are run by good business people; typically accountants and the like. Most chefs and the like don't have good business sense. Check out Anthony Bourdain's books.

For designers, engineers, and marketers to build cars; like any manufacturing, take coordination. They're not the only ones involved in the process. Consider safety aspects; many designers will pose a beautiful design that is drop dead gorgeous... but deadly. There's a balance.

[biabouman41]

ALL CEO's of companys requesting government bailout or guarantees of non-failure should be forced to resign as a prequisite to government help. ALL. This one maneuvre will weed out those who abuse taxpayers. This should be a standard requirement, unless that CEO was recently (6months) hired specifically to aid the company out of trouble.

[BillyMae]

And what about the Board, who has been rewarding lousy management for years?

[neoconumb]

Don't ask that question. You might start hearing strange beeping sounds when you talk on your telephone.

[AKJM]

No, these men only sold cars Americans wanted to buy. GM is said to have and EV in the works, so they are doing the job.

[amluvinit2]

That's true only in part. If these companies would make a better quality small sized cars, they could have been in competition. I mean Ford's escort, with no re-sale value, come on, they can do better than that.

[AKJM]

No resale value because no one wants to buy .
Detroit needs health care and as one poster put in a non-poverty pension system plus fair trade. Not a lot just the same as with the rest of the industrial world.

[Rule Of Law]

If they throw this guy under the bus, then they should demand the heads of every Wall Street Banking Executive and his team members right down through middle management! They should all be gone. They cost us more, endangered the country to a much greater degree, and have had more far reaching effects on every day Americans than Detroit has.

If this guy goes, ALL the bankers should go with him!

[neoconumb]

They won't do that. They're their buddies!

[Mikeeee]

Right on the mark!!

[ATruthBeKnown]

Like Washington this company needs fresh blood from the top down. They (including Ford and Chrysler) need someone with bold leadership and vision skills. These mooks don't qualify.

In my business, if I showed up at a captial committee asking for money without a plan I'd been fired. I'm sure they would not tolerate that behavior from their employees ...on second thought maybe they do.

That makes them unqualified for the job and need to move on.

[neoconumb]

Actually, I think your response is much the same as how a badly managed company would handle the situation. Make broad sweeping conclusions, and don't look into the details.

[Hank10303]

I wonder what part of "YOU DID A LOUSY JOB" is he not getting.

[ThinkLiberal]

Rick Wagoner has been the biggest obstacle to GM taking the bold, transcendent steps that it should have taken, back in the late '90s, that would have put the company on a much more competitive footing, which in turn would more than likely would have prevented all of the heartburn and upset stomach that they are now experiencing. Instead, he trashed the electric car (EV4 I think it was called) in favor or the gas-thirsty Hummers and Expeditions of the world. Remember, that it was Wagoner himself who impugned and laughed at the fact that global warming even exsists. The man has absolutely no forward vision and definitely needs to exit the stage before a dime of taxpayer money is put into his hands. The sooner he leaves, the better.

[ckt]

ditto...and BTW, well said.

[ErnestineBass]

Unless Wagoner, Lutz, Laneve and the entire fossilized GM BOD are replaced, you might as well take GM's cut of the "bailout" and pound it down a rathole.

As for Nardelli and Chrysler...there's no sense in bailing out a privately owned entity. Let 'em sink.

[conniec]

Again, I've got to ask, WHY aren't we demanding that the CEOs of financial firms receiving bailouts step down? Why are they getting a "pass?"

I mean, the d.o.u.c.h.b.a.g CEO at Merrill Lynch (being taken over by Bank of America) is asking for a $10 MILLION bonus, after losing over $11 BILLION thus far. (Plus Bank of America is giving him a job.)

I agree the Big 3 will need lots of oversight to make sure they change what needs to be changed (practically everything?). But let's get real...DO THE SAME THING FOR THE FINANCIAL INDUSTRY!!!

[neoconumb]

The U.S. government is bought and paid for by the Banks and Wall Street. They love this little show they can make about the U.S. auto industry, so they can divert our attention from the fact that they passed an abomination of a bailout (not loan) for their buddies and financiers in the financial sector. THE fundamental that needs to be addressed is how do we get back our government from these S$O Bees?

[AKJM]

Well said!

[HoraceOvidson]

You did a helluva job Waggie.

[kellygrrrl]

OUST ALL CEOs of bailed-out companies!!!!!!!

these dinosaurs will never change and we need to make room for true innovation

[Hank10303]

Not only the CEO's but the entire executive staff!!

[jinxed]

EXACTLY! Incompetence should point to the door with the pink slip, NO severence, golden parachute and consider yourself lucky you aren't going to jail!

[BuckeyeGal]

Promoting from within, ok.
But having the competition's management come on board -- insanity. Does no one see the conflict of interest in that?

[RoseBlue]

You're wrong there. Promoting from within a brain dead organization just continues brain dead leadership. They PRECISELY need to hire from the competition. They need new blood from a company with a record for innovation. A former Nissan executive fits that bill.

[BuckeyeGal]

Yes, I get your point about new thinking. But my concern is that management from a rival, particularly a foreign one, would then be in a position to 'innovate' the US auto industry right out of business.

[feo]

Maybe he'll change his name to Wagoneer and go to work for Jeep.