He made a number of difficult moves, and so did his hand-picked successor, Rick Wagoner, including the closure of the century-old Oldsmobile division. That’s not to say Jack Smith, who replaced Stempel, didn’t try. As the industry recovered, the unions and other stakeholders slammed on the brakes. The car maker squeaked through, following a boardroom coup, but Stempel’s successor could only make the most rudimentary changes. In the early 1990s, when GM also came perilously close to insolvency, then-Chairman Robert Stempel couldn’t bring himself to order the drastic plant closings and job cuts that he knew were required. And that clubbiness also made it difficult to take even the most obvious actions.
Top management was, with numbing regularity, plucked from within familiarity was as important as actual talent. Or maybe they feel more comfortable with an outsider.įor decades, Detroit was the ultimate insider’s club. Why wasn’t Nardelli also given the boot, considering there’s been little good news from Chrysler since he joined it in mid-2007-after his prior stunt overseeing Home Depot’s downturn? Perhaps the White House knows something that hasn’t quite come across in the headlines.
Where GM has 60 days to fix its restructuring plan, Chrysler CEO Bob Nardelli gets just half that time to finalize a proposed alliance between the automotive arm of private-equity giant Cerberus Capital Management and the Italian automaker Fiat SpA. What’s equally telling is the fact that Wagoner’s counterpart at Chrysler remains on the job, even though the smaller maker is clearly the worst off among Detroit’s Big Three. To a large extent, the faces that stared out of the annual reports before the financial meltdown still man the executive suites today. The irony is that, even now, representatives of the finance industry face minimal scrutiny-and most continue flying their Learjets and Gulfstreams. While Wall Street ran up the truly mind-bending losses, the jet-setting Detroiters became poster children for corporate America’s disconnect. Yet, the reality is that Detroit has undergone a far more grueling time making its case for aid, starting with last year’s high-profile congressional hearings, which the Big Three CEOs importunely arrived at in their individual corporate jets. That’s raised concerns about bailouts, in general. Timing didn’t help the 56-year-old former Duke basketball star: The March 31 deadline for Detroit’s troubled auto makers to turn in their business plans immediately followed the AIG bonus flap. To Michigan Governor Jennifer Granholm, nominally Obama’s close ally, Wagoner was merely a “sacrificial lamb,” the head on the pike declaring to all that the White House wasn’t an easy touch. Wagoner’s counterpart at Chrysler remains on the job, even though the smaller auto maker is clearly the worst off among Detroit’s Big Three.Ĭan Henderson-whose 25-year career closely parallels Wagoner’s-make a difference? Depends on who you ask, and that’s why many question the shakeup, which was touched off by the president’s automotive task force a day before Obama announced that GM and its even more damaged crosstown rival, Chrysler LLC, hadn’t made their case for further federal aid.
Wagoner’s successor and protégé, Fritz Henderson, now gets 60 days to pull off a miracle: convincing the White House that GM can not only survive but thrive with the help of new federal loan guarantees. Was he scapegoat, a talented and dedicated corporate leader who fell victim to a heads-must-roll witch hunt, or a misguided manager, in way over his head? The only thing certain, right now, about Rick Wagoner is that he’s lost his last shot at staving off the potentially devastating bankruptcy of General Motors.Īfter eight years as CEO, Wagoner was unceremoniously ousted last weekend by the Obama administration, which then delayed a final decision on a desperately needed bailout for the once-invincible auto maker.
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