Mr. Wagoner has been CEO since 2000 and has managed the company through some of its most difficult moments. Over the last four years, GM has reported losses of $82 billion and nearly ran out of money at the end of 2008 before the U.S. Treasury Department provided emergency loans.
GM’s Wagoner Will Step Down [The Wall Street Journal]
I can’t help but think this is a sign of worse things to come, at GM & generally.
Not because Wagoner has been great, or even deserves the job. But because, honestly, they (USG) should have just forced Chap 11 in the first place, and now seem to scrambling, again, to address the fact that their plans didn’t work out.
“45 43 Matt Drudge changed the headline. Was the CEO supposed to offer to work for a buck and he missed the cue?
I do believe he was working for $1 in 2009. It’s about the bond holders and concessions Wagoner did not get from them.
Now a question for the financial types out there: how can Obama threaten the bond holders? Because if they don’t tow the line, he is planning to threaten them.
Posted by: shibumi at March 29, 2009 05:27 PM (tZB/c) ” http://tinyurl.com/d8xnxz
I was just watching MTP and McCain was on. Again he said “i don’t really know much abt the economy.” I am really mad he didn’t get elected. Not only is he a neophyte as far as the economy is concerned, but he doesn’t learn…that whole “i don’t know much abt the economy” is what sank him in the 08 election.
He also said Palin doesn’t definitely get his vote in 2012. How great is that for a running mate?
Cue EP.
Cheers B1tches,
Tanned Banker
Who are the GM bond holders?
McCain is a graceless c*nt. Without regard for the ultimate qualities of Palin, throwing her under the bus speaks more to his character than hers.
That said, Obama was clearly the better candidate in Nov ’08.
THAT said, Obama is still a shit-sandwich, medium rare, and it disgusts me that we had no better choices available to us in that election.
I don’t blame Wagoner for leaving. After the grilling Liddy got from Congress, who would want the aggravation for $1/year? The odds are pretty good that Wagoner will land on his feet, and be out of the public eye. No more taking orders from the empty suit in the White House.
Heads of Goldman, BofA and all the other tarp sucking banks next.
This is how capitalism dies. It’s a dangerous to allow the government this much control and access to business. The shareholders of GM should be outraged that the Obama administration just in effect fired their CEO. That should be the exclusive right of the equity holders, NOT the U.S. government.
There wasn’t much Wagoner could do in shoving the union around for as long as he had been there. I honestly thought he did what he could, but it is attune to being captain of the Titanic…you just aren’t going to win.
The only reason a wealthy guy like Wagoner stayed on there was he saw a chance to undertake a huge achievement in saving one of American’s iconic businesses. Guys like him certainly don’t do it for the money (supposively his salary was $1)…you could argue for the power, but GM has been a wounded duck for quite a while.
With whom is our Dear Leader going to replace him?
“Maybe you could shed some light on this. It is my understanding that any party with a significant stake in any given company could have standing to force an involuntary bankruptcy filing. Is this true?
In other words, any of the various banks/ funds/ suppliers/ plans/ bondholders/ etc. could petition the Court and force a reorganization, in order to protect their interests. What’s holding any of these parties up?
TIA.
Posted by: Doc Rochester at March 29, 2009 06:59 PM (aYL9O)”
http://tinyurl.com/c37vre
On the John Batchelor program he was just interviewing a chick who said the “shitty bankers” have found away to get around the bonus debacle”. Waiting if something comes up on the website, apparently she has or will have an article in the NYT.
John Batchelor is discussing this now. Source can’t confirm who fired the CEO. Batchelor just asked if we nationalized GM.
I hope Wagoner negotiated a nice severance/parachute for all he’s done for GM. It’s important that talented managers like him get rewarded. His interests need to be aligned with those of the firm’s owners. Otherwise, what incentive will he have to deliver strong performance for them? It’s all about principal-agent costs, you see. Wagoner’s talent is in short supply: only a handful of people in the world could manage GM as well as he has. If his talent isn’t duly rewarded, he’ll just go somewhere else and do for them all of the great things he’s done for GM. Then where will GM shareholders be? Those communists/negroes in DC don’t get it.
[EP: Feel free to add any platitudes I've left out.]
If you need proof, just look at AIG!
Who in their right mind would take the post of CEO after AIG? Oh, I forgot Ed Liddy.
No doubt Ken Lewis is currently spell checking his resume.
@9
i never do this, but i feel compelled to help you. “supposively,” is not a word. the correct word is “supposedly.” your future thanks me.
@13, wow, that was almost funny. Actually, not even that.
At the White House’s request. I wonder if Carl Ichan is ready to fire up a lawsuit?
Amazing how having control of the last big bag of money in the Western hemisphere suddenly makes you a master businessman.
I’m sure Obama asked very intelligent and thoughtful questions at the “Global Industrial Conglomerates for Beginners” seminar before firing GM’s CEO.
This is the same as firing the captain of the Titanic after it hit the iceberg…it doesn’t change a thing, the ship is still going to sink.
Kiss the rally goodbye.
Ahem, hello? White House kindly request you all shut the fuck up, comrades. Complainers will be shot. Bankers will be shot. Those without picture of Obama on living room wall will be shot.
(I want to defect. Look for me, you’ll be able to see it in my eyes.)
In the end, this is America. Once all the fuckhead Wall Street and Media types that financed Obama’s ram-job to the White House end up paying 55% off the top, coupled with a 75% haircut on future revenues, Bruce Willis will be on the ticket in 2012.
But why now? Why, after what 8 years? Why is is “necessary” for him to leave now?
Riddle me this, Batman. So Bammy/Pelosi/Napolitano are ending those “un-American” workplace raids seeing as “we don’t want to break up families” but at the same time are supporting sending all the H1-B visas home (screw their families) and presumably they are not going to start letting in just any old European/Korean/Indian immigrant into the US. (Save for the odd and cranky Saudi terrorist.)
Figuring they’ve calculated that most of the 20 million they are going to help “get on the path to citizenship” are going to vote Democrat, particularly if Bammy gives them all green cards and construction yobs. The other immigrants probably wouldn’t and are considered expendable.
Sixty nine million votes last time, plus at least another 10 mil. out of this latest humanitarian effort and shazam, nobody in Congress is going home in in 2010 and Barry is going to be a two-termer.
Time to rethink a) my US job search or b) whether Saving the Plah-net earning fifty bucks an hour while installing solar panels is going to cut it on both a spiritual and material level. I’m thinking no.
Also, poor Rick. Must be time for Obama to put in another one of his Chicago Comrades.
Ignorant comments stink this place.
@24,
It should be obvious by now that the administration thinks that this will somehow placate the public outcry against, once again, bailing out the auto companies. As the prez said on 60 Minutes (at least in his mind) there is nothing less popular than giving the auto companies more money. The reason Vikram Pandit still has a job is there was no replacement, Pandit was, after all, not at Citi when most of the shit was loaded onto its balance sheet, and the public sensitivity was not as heightened as it is now, post-AIG.
The intent is also to send a message to the other interested parties that he means business and will smoke them just as he did to Wagoner, unless they agree to his terms.
Unfortunately, this may temper Main St., but I doubt Wall St. will see any wisdom in this move. As others have noted, this ship will still sink.
First we had “too big to fail”
Then we had “too interconnected to fail”
Now we have “too politically important to fail”
“WASHINGTON — The Obama administration plans to give General Motors Corp. enough government aid to restructure over the next 60 days, while Chrysler LLC will get up to $6 billion and 30 days to complete an alliance with Italian automaker Fiat SpA.
Two people familiar with the plan said Sunday it will demand further sacrifices from the automakers and bankruptcy would still be possible if the automakers failed to restructure. The officials spoke on condition of anonymity because they were not authorized to make details public.” http://tinyurl.com/czuzxg
If you look at Wagoners track record, there are very few CEOs that have vaporized as much shareholder wealth and jobs as this guy. My favorite move was when they sold off Hughes for approx $1bn because it was non-core. That included DirecTV, which now has a market cap of $22BN, more than 10x that of GM. Good call buddy. Spinoff the one asset that is growing and focus on the dying business that is gagging on legacy costs.
It is amazing he lasted this long. I am normally opposed to the govt dictating crap like this. But the board of GM refused to do their job and can this clown. Someone had to do it.
How the hell did all the Yahoos get here so quick today?
Wagoner is (was?) a GM lifer. I doubt that anyone could have done much more than he did to improve GM’s chances of survival. Like others have said, GM was most likely doomed long before Wagoner even got on board.
Also, echoing some above, I’m curious why anyone sitting on >~$10MM or more liquid would want to be at/near the helm of any large public company, especially one that’s taken (or may need) Government $$.
Sure, if you somehow manage to pull it off you may be hailed as a hero and rewarded handsomely, but it appears the downside far outweighs the upside, especially given the low probability of success the expected value of that trade is dangerously low.
@24 and @27,
It’s not just to the public, but also a warning shot across the bows of the company boards. It’s the GM directors that are the real culprits here. The board is supposed to represent the shareholder, but instead they represent the fundamental gap of leadership that resides in most large companies these days. This gap that manifest itself in officers that are more focused on their paychecks than the long term health and success of the company, and a visionless CEO. It will be interesting to see if this action generates more board oversight on CEO actions in other companies that are seeking to slop at the government trough. As for GM, take a flamethrower to the board, and let the entity BK. Maybe out of the ashes a few good companies can be created with decent (and reliable) products.
Wow, takes till @27 for an intelligent analysis to appear.
You can’t bail the company and keep the guy in charge in his job, simple as that.
And temporary government takeovers or directives are not socialism any more than the bazillion other western nations doing the same thing are socialist.
you.
must.
learn.
The way most of the comments read, he deserved a fat bonus, not a pink slip or does that logic just pertain to the financial industry?
You know who could get the job done at GM? Bruce McMahan.
A company that f’ed up deserves an equally f’ed up executive.
By the way, Rattner is a POS. The guy is a mediocre investor in media properties. So we give him the auto sector to piss on? Makes no sense. The guy that filled me up with unleaded yesterday knows more about the autos than this clown.
True that @30. Intimately acquainted with that shitshow of a deal. Never thought I would feel vaguely sorry for the guy.
@8
the sharholders should be giving the white house a zj because their share price >0. i’ll take gov’t orders over worthless paper any day
37, sort of like electing a community organizer to be president.
40 comments on a weekend for some non-event like this? WTF?
#41, why do you consider this a “non event”?
Yeah, hopefully the next GM CEO isn’t a community organizer from Chicago with no executive experience–cause that would just be insane.
The articles say they are going to promote some guy who was just promoted. So won’t he just continue to follow the former CEO’s plan?
Fritz Henderson
http://zerohedge.blogspot.com/2009/03/exclusive-aig-was-responsible-for-banks.html
That’s dude has been on fire lately.
@10
The words “avoidance powers of the trustee” immediately come to mind. GM’s creditors really do not want to deal with the potential clawbacks that would come from a GM bankruptcy.
Those creditors include the US government.
Blackmail is racist.
Uh oh. Fox News reporting Obama is saying, “NO!”.
The White House says neither GM nor Chrysler submitted acceptable plans to receive more bailout money, setting the stage for a crisis in Detroit and putting in motion what could be the final two months of two American auto giants.
The Obama administration, however, has decided not to require the automakers to immediately repay government loan money they previously received, since that would force both companies into Chapter 11 bankruptcy.
“A senior administration official told FOX News, “calling in the loans would not be a productive exercise for the American taxpayer since the companies don’t have the money [to repay the loans] and it would simply put the companies into uncontrolled Chapter 11.”
Obama was set to make the announcement at 11 a.m. Monday in the White House’s foyer.”
@ Finnegan
Go to fucking sleep man!
Lovely, they threw $ at the problem to avoid BK, and now the Co’s are still facing it. Shocking, truly.
Also, if you’re Fiat, hell, or even any other global Car Co, why the fuck would you do a deal with one of the Big 3? Just hurry up and wait, call DC’s bluff, and pick up the pieces for a fraction of what it’d cost you to close today.
@50 – Question is, can Obama make a tough decision? Everyone knows there’s only one real answer to GM’s problems but it will require a profile in courage that, to date, Obama has not demonstrated.
@51 agreed. This may be temporarily bad for the market but would show some real decision making. The question is how will this affect him politically. Is losing Mich and Ohio be enough to make an under the table deal?
You financial types crack me up. This is all politics. GM is about to become a cabinet department, a crucible for the accelerated development of next gen super-efficient low-carbon zero-speed vehicles. And ridiculously inefficient healthcare.
Bring on the Tata Nano. Yea baby!
And for those fans of (East)German engineering nothing says Freude am Fahren better than the Trabant and the Wartburg.
Yeah, the Govt should tell us who to run our companies.
I think we, as American voters, should fire all politican, including the Comrade in the White House.
watch the unintended consequences of this retard show.
they’re going to destroy the entire concept of capital formation by telling secured lenders (bondholders) tough luck we’re changing the rules (laws).
chapter 7 if the bondholders want it or make them whole.
how is anything else reasonable?
57 Where are the rules being changed? The lender (govt) made a management change a condition of lending. SOP in private equity.
http://tinyurl.com/cayqdw Fritz is a Harvard man
58 – wagoneer made it clear chapter 7 or nothing.
you don’t understand that this is all rule changing?
are you saying bondholders have fluid rights?
60 Wagoneer made it clear? Does it say 7 or nothing in the indentures? This is the normal risk that bondholders assume and in no way diminishes their rights.
The unions are the only constituency Obama cares about here, and his problem was getting the bailout cash to them without leakage to the capital. He’s just told the equity they will get nothing, and taken out the negotiator likeliest to stand up for them. Next he’ll want the bondholders to trade their credit for the equity of the restructured enterprise. And the benefit and wage claims of the unions on that enteprise will be prior to any capital claim.
So all the government bailout cash will benefit the workers first. They are essentially getting company. The next question will be, how much will the government inject to prop up the new enterprise, and over how long a period?
It is a very clever bit of work.
Yeah, getting the company in return for contract concessions. Why is it that contracts with bondholders are sacred and with workers not?
union worker: $100,000
wagoner: $1
When you take a loan and cant pay it back, the lender has every right to foreclose or demand changes in your operations etc.
By taking the bailout money private enterprise essentially ceded some of its authority to the lender/ government.
Obama/government now has every right to demand changes now that its a major holder of equity or debt. I hope he throws Vik and some of the others under the bus too – but i doubt it. Its cool to bash the car companies and their blue collar workers. Obama doesn’t have the balls to call for head of a financial type. This is opportunism at its best by Obama.
@65-When did the Executive branch become Lord and Master? Congress has the budget authority yet Obama decides who gets fired? Seems like he’s just jumping over that old silly division of powers thing imagined 200 centuries ago.
A brave new world of change indeed!
63 -
are you stupid?
thx.
“When you take a loan and cant pay it back, the lender has every right to foreclose or demand changes in your operations etc.”
But the other lenders also have rights. If you look at the government as a DIP lender, they should get 100% back. But they don’t get more than that.
The government is manipulating this to take the whole company. The equity or capital could have filed and sought to save themselves through cost and debt restructuring, but instead figured the government would protect the unions, and the capital into the bargain.
No tears for GM here. This was a self-interested political calculation that didn’t work out. It was probably their best and only bet in the first place. It does illustrate that these had become essentially political enterprises a long time ago.
This is the economy progressives would like to structure. Winners and losers would be chosen not by the value they provide others, but by their political and rhetorical strength. Less popular players can get some shelter from political deals, but these will be valid only so long as the weaker player has utility to some stronger player. People will be judged not by the quality of their work but by their conformity to the opinions and preferences of the politically strong. You will be free to have your own opinions, but you may find it hard to prosper if you insist on them.