Rick Wagoner, GM CEO, Will Step Down At Obama's Behest
The Obama administration asked GM CEO Rick Wagoner to step down, according to numerous reports.
According to Politico:
The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.
The White House confirmed Wagoner was leaving at the government's behest after The Associated Press reported his immediate departure, without giving a reason.
And the Wall Street Journal adds more details:
Mr. Wagoner was asked to step down on Friday by Steven Rattner, the investment banker picked last month by the administration to lead the Treasury Department's auto-industry task force. Mr. Rattner broke the news to Mr. Wagoner in person at his office at Treasury, according to an administration official. Afterward, Mr. Rattner met one-on-one with Mr. Henderson, who will fill in as GM's CEO.
"On Friday I was in Washington for a meeting with administration officials," Mr. Wagoner said in a statement released by GM. "In the course of that meeting, they requested that I 'step aside' as CEO of GM, and so I have."
General Motors CEO Rick Wagoner will step down from the company, according to several reports.
The timing is curious, considering that President Obama is expected to announce on Monday the next steps to help GM and Chrysler, which have received $17.4 billion in emergency funding from the U.S. Treasury and are asking for more help: G.M. has asked for up to $16.6 billion more, and Chrysler another $5 billion. On Friday, Wagoner was in Washington, DC to meet with the White House auto task force, led by former investment banker Steve Rattner.
Wagoner and GM have been criticized for not doing enough to slash debt and cut costs as part of the giant automaker's agreement with the government.
CNBC first reported that Wagoner would step down, adding that GM did not confirm or deny the report.
The New York Times reports:
The unexpected move by Mr. Wagoner, who has been at the helm of G.M. for eight years, was not confirmed by the company. But a statement about Mr. Wagoner's future will be issued after the president's address...
There was no indication yet who would take over the top job at General Motors. As recently as March 18, Mr. Wagoner said in an interview that he had no indication that his job was in jeopardy because of the task force.
Though there was no word on who would replace Wagoner, GM's COO Fritz Henderson, is widely expected as the leading candidate to replace him.
Some former critics of Wagoner were surprised that the administration decided to force him out, rather than bank executives who have received billions in bailout funds.
University of Maryland economist Peter Morici, a one-time critic of Wagoner who had called for him to resign but now believes he had "started to get it," said the administration has a "PR problem" regarding unpopular corporate bailouts.
"They are bailing out just about anybody that shows up and says they need cash. The public has grown weary of it and instead of throwing a banker to the wolves they have decided to throw Wagoner to the wolves," Morici said.
Congressman Thaddeus McCotter, a Detroit-area Republican and member of the House Financial Services Committee, was critical of the White House decision, claiming that Wagoner was a victim of a double standard:
"Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date. Mr. Wagoner has honorably resigned for the sake of his company's working families.
When will the Wall Street CEOs receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it."
Amid increasing accusations of a double standard in the treatment of the auto industry compared to banks, the Wall Street Journal is reporting that White House officials considered ousting Citigroup CEO Vikram Pandit in the past:
Since the financial crisis bloomed in September, the Bush and Obama administrations have replaced management only in cases when they took control of struggling companies, such as mortgage giants Fannie Mae and Freddie Mac and insurance concern American International Group Inc.
Citigroup Inc., by contrast, has received three government rescues since October, under which the U.S. will own up to 36% of the company's stock. Officials have in the past considered removing CEO Vikram Pandit, but demurred, in part because of the paucity of candidates to replace him, people familiar with the matter say. A spokesman for Citigroup couldn't be immediately reached for comment.