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GM CEO resigns at Obama's behest

hypocritexposer

Well-known member
GM CEO resigns at Obama's behest
By: Mike Allen and Josh Gerstein
March 29, 2009 05:23 PM EST

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

On Monday, President Barack Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. The plan is based on recommendations from the Presidential Task Force on the Auto Industry, headed by the Treasury Department.

The White House confirmed Wagoner was leaving at the government's behest after The Associated Press reported his immediate departure, without giving a reason.

General Motors issued a vague statement Sunday night that did not officially confirm Wagoner's departure.

"We are anticipating an announcement soon from the Administration regarding the restructuring of the U.S. auto industry. We continue to work closely with members of the Task Force and it would not be appropriate for us to speculate on the content of any announcement," the company said.

The surprise announcement about the classically iconic American corporation is perhaps the most vivid sign yet of the tectonic change in the relationship between business and government in this era of subsidies and bailouts.

Wagoner has been CEO for 8 years and at GM for more than 30. It is not yet clear who would replace him, or what role the administration would play in that process.

Industry sources had said the White House planned very tough medicine in Monday's announcement, which turned out to be an understatement. And it went to the very top. The measures to be imposed by the government will have a dramatic effect on workers, unions, suppliers, bondholders, shareholders, retirees and the communities where plants are located, the sources said.

GM and Chrysler first requested billions in federal aid in November, warning that they could run out of cash in a matter of months if they didn't receive it. In December, President Bush agreed to loan $9.4 billion to GM and $4 billion to Chrysler.

Earlier this month, Obama agreed to loan $5 billion to American auto parts manufacturers to help them weather the steep drop in new vehicle orders and the financial uncertainty at the Big Three.

Obama and his aides may have honed in on Wagoner for two reasons. First, his company is asking for the most in total federal aid: $26 billion, a figure administration officials fear could grow even larger. Second, the GM chief was tied more directly to the ill-fated decisions that that brought much of the American auto industry to the brink of collapse. Wagoner joined GM in 1977, has had a senior role in GM management since 1992, and became CEO of the company in 2000. He is considered responsible for increasing GM's focus on trucks and SUVs—at the expense of the hybrids and fuel efficient cars that have become more popular in the last couple of years.


By contrast, Chrysler CEO Robert Nardelli, whose resignation does not seem to have been demanded as a price of further federal aid, was a newcomer to the auto industry when he was lured to that company to help turn it around. Nardelli had previously headed Home Depot.

Government officials have little reason to tilt at Ford CEO Alan Mulally since his firm has not actually taken bailout funds from the government. Ford asked for a $9 billion line of credit from the feds, but the firm has said it has no plans to tap the credit facility.

Obama's move against Wagoner hearkens back to September 2008 when President Bush's Treasury Secretary, Hank Paulson, insisted that AIG CEO Robert Willumstad step down as part of an $85 billion bailout of the insurance giant. Paulson installed in his place Edward Liddy, a former Allstate executive. The AIG bailout has since grown to about $170 billion and Liddy has faced calls for his resignation in the wake of reports about hundreds of millions of dollars-worth of bonuses the firm agreed to pay to employees.

Obama said Friday in an interview with CBS’s “Face the Nation,” broadcast Sunday, that the carmakers were going to have to do more.

“There's been some serious efforts to deal with a combination of long-standing problems in the auto industry,” the president told host Bob Schieffer. “What we're trying to let them know is that we want to have a successful auto industry, U.S. auto industry. We think we can have a successful U.S. auto industry. But it's got to be one that's realistically designed to weather this storm and to emerge at the other end much more lean, mean and competitive than it currently is.

“And that's gonna mean a set of sacrifices from all parties involved — management, labor, shareholders, creditors, suppliers, dealers. Everybody's gonna have to come to the table and say it's important for us to take serious restructuring steps now in order to preserve a brighter future down the road."

Schieffer followed up: “But they're not there yet.”

Obama added: “They're not there yet.”

The Obama administration calls its task force “a cabinet-level group that includes the secretaries of Transportation, Commerce, Labor and Energy. It will also include the chairman of the President’s Council of Economic Advisers, the director of the Office of Management and Budget, the EPA administrator, and the director of the White House Office of Energy and Climate Change. The Task Force will be led by Treasury Secretary [Tim] Geithner and [National Economic Council] Director Larry Summers.”

The panel’s chief adviser is Steven Rattner, a well-known investment banker and former New York Times reporter.
 

Jessntx

Active member
Next step in Socializing our nation,,,, nationalize the auto, banking, & oil companies,,,,,,,,, health care is next,,,,

How do we stop this crap before the next election??
 

Texan

Well-known member
The White House confirmed Wagoner was leaving at the government's behest...

WAKE UP PEOPLE !!! :mad:

This is a slippery slope that has no end in sight. This type of heavy-handed government involvement would infuriate our founders. It should also infuriate and scare the hell out of everybody in this country - liberal and conservative alike.

Why doesn't the Obama Administration ask for the resignations of self-serving, incompetent government employees like Barney Frank and Chris Dodd?
 

Mike

Well-known member
Michigan Gov. Jennifer Granholm on Monday called the chairman and CEO of General Motors a "sacrificial lamb" after the White House asked Rick Wagoner to step down as a precondition for government aid.

Interviewed Monday on NBC's "Today" show, Granholm noted that Wagoner has worked for GM for more than 30 years and was trying to turn the company around.

She said that Wagoner agreed to step aside for the good of the carmaker and its workers.

U.S. Rep. Thad McCotter, R-Mich., also said Wagoner's resignation amounts to a "political offering."

In a written statement released Sunday night, McCotter complained that the Obama administration was applying tougher standards to Detroit than Wall Street as both continue to seek government assistance.

"Now Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date," McCotter said. "Mr. Wagoner has honorably resigned for the sake of his company's working families. When will the Wall Street CEO's receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue? I doubt it."

The Obama administration announced late Sunday that neither GM nor Chrysler has come up with acceptable business plans to merit receiving additional federal bailout money. The two automakers were each given a short deadline to try one last time to persuade Washington they're worth saving.

Administration officials denied Wagoner was asked to leave as a condition for receiving more government aid.

"We wanted to start GM with a clean sheet of paper. We felt the change in leadership would assist that," one official said.
 

don

Well-known member
wagoner had eight years as ceo to turn things around but they were just getting worse so he failed and should pay the price. the whitehouse is justified because gm wants taxpayer money and it shouldn't be handed to a failed management. i'm sure more changes will come - they are sorely needed.
 

don

Well-known member
well i guess the right answer then would be no aid for gm (i agree with that) and let them go under (agree again). either way wagoner is gone.
 

aplusmnt

Well-known member
don said:
wagoner had eight years as ceo to turn things around but they were just getting worse so he failed and should pay the price. the whitehouse is justified because gm wants taxpayer money and it shouldn't be handed to a failed management. i'm sure more changes will come - they are sorely needed.

Have they been doing that with all the companies that got bail outs? Were all the bankers and insurance CEO's asked to leave to get bail out money?

Personally I think he should go also, but it should be through a failed company that has to fire him because they no longer exist not from a Government interfering!
 

Broke Cowboy

Well-known member
The issue about him being gone is not the real issue. After all the board and / or the shareholders could have voted him out at any time.

There are always more reasons for a company to be in a bad situation besides the actual boss man himself. If that is not the case, every bank that has failed in the U.S. of A. and every company on the rocks in the U.S. of A. should also have their boss fired and replaced. Many times issues beyond the control of one man will make or break a company.

The fact that he was the head of the company and the feds said - "Out you go" - is the issue.

In truth that scares the hell out of me - when this type of thing happens you are well and truly in deep doo doo - and the worst part is - very few seem to be able to understand that.

It is simply putting the business sector one step closer to being under federal control - this is only one step and that is why many will make light of it - but it is always easier to repeat something than it is to initiate it when it comes to policy - after all the ice has been broken and precedence has been set.

Yup - you want that government contract Mr. Defence Company? Well, we do not like your CEO, VP, COO so if the board fires them, the company gets the contract.

Mr. and Mrs. Smith we see you have applied for a government business loan but you and your husband are registered Republicans and also listed as the CEO and VP - place the business under the direction of a registered Democrat of our choice and you get the loan.

Your local sale barn wants some government seed money to build an expansion and hire more locals - but can be told - "No money until you fire Bob the auctioneer because he bad mouths Obama at every sale".


Do not sneer at the possibles from above - actually it reminds me of Chicago - except now on a possible national scale.

The above is now completely within the realm of reality because the feds have now stepped in and interfered in a publicly held company - removing all the responsibility of the board and shareholders.

As for Readers comments about targets not being met - that may or may not be true - despite the Obama loving media tall tales section of the front page - above the fold of course.

Until one truly knows what those targets are and were - and if they were truly attainable - then any talk of targets is simply spurious and potentially malicious - so watch the media to see the spin come from this one.

If the initial news is all positive for Obama - then there will be proof of a definite spin from the co-operative media. Hopefully there will be at least a few that see the dangers here.

Demonize a man and do it right - blur the facts and force him to sign a non-disclosure (been there personally) and then ride him into the sunset and ruin his reputation at the same time. None of us know this man or have walked in his shoes and dealt with his situation. But we are willing to let the feds do the job of the board and the shareholders. If this happens again I might seriously quit investing completely in the U.S. of A. market - because any due diligence I perform can be wiped out by a president who decides management needs to be changed!

Yeah, this is not only big news, it is an indication that government may be about to enter the business of controlling business - even more than they do now.

Some folks need to think on this one a bit more.

BC
 

TexasBred

Well-known member
don said:
wagoner had eight years as ceo to turn things around but they were just getting worse so he failed and should pay the price. the whitehouse is justified because gm wants taxpayer money and it shouldn't be handed to a failed management. i'm sure more changes will come - they are sorely needed.

Failed management? What about CITI, FNMA, FHLMC, etc etc etc..I guess I forgot. Their management had "connections".
 

TexasBred

Well-known member
reader (the Second) said:
We the U.S. taxpayers now own a significant percentage of GM. If we were the board, we would have gotten rid of this guy years ago. He clearly has not done well for the stockholders and now for the taxpayers. The articles I read last night said that he was given targets when GM was bailed out and he has not met them.


Wouldn't you say "Obama was given targets when he was innaugurated and he has not met them"?? Much of the public seems to think so. How fast is HIS created debt growing? When will he become a viable entity?
 

garn

Well-known member
Texan said:
The White House confirmed Wagoner was leaving at the government's behest...

WAKE UP PEOPLE !!! :mad:

This is a slippery slope that has no end in sight. This type of heavy-handed government involvement would infuriate our founders. It should also infuriate and scare the hell out of everybody in this country - liberal and conservative alike.

Why doesn't the Obama Administration ask for the resignations of self-serving, incompetent government employees like Barney Frank and Chris Dodd?

and that slippery slope just got slipper :roll:
 

Sandhusker

Well-known member
reader (the Second) said:
We the U.S. taxpayers now own a significant percentage of GM. If we were the board, we would have gotten rid of this guy years ago. He clearly has not done well for the stockholders and now for the taxpayers. The articles I read last night said that he was given targets when GM was bailed out and he has not met them.

If he's failed his job, he should be booted just like anybody else. However, that decison should come from the Board of Directors or by the shareholders NOT THE GOVERNMENT!

Now Obama is even saying that the US Government will honor the warranties of GM! THAT IS NOT THE PLACE OF GOVERNMENT!

Texan is exactly right, it's time to WAKE UP!!!!!!!!!!!!!
 

aplusmnt

Well-known member
And now the stock market heads south again because of more Obama action. Maybe he should just go back on his talk show tour and stay out of Washington!
 

SMN Herf

Well-known member
reader (the Second) said:
We the U.S. taxpayers now own a significant percentage of GM. If we were the board, we would have gotten rid of this guy years ago. He clearly has not done well for the stockholders and now for the taxpayers. The articles I read last night said that he was given targets when GM was bailed out and he has not met them.

I don't think that is right. True, the us taxpayer loaned money to GM and Chrylser but as far as having an actual share of the complany and having representation on the Board, I don't think so. Now are we secured or unsecured creditors, I really don't know. But I am sure we are the largest creditor. The thing is that when a company verging on bankcruptcy wants more money, the creditors do have the right to make certain changes it sees fit. Like firing the CEO. It happens all the time. I don't know if the failure was his fault or not, but one of the requirements of the 'targets of the bailouts' was to come to an agreement with the labor unions. Given the influence of the unions on this administration he didn't have much hope as they certainly would have just dug their heals in and taken their chances with Obama rather than GM.

This whole auto industry situation is puzzling with me. From the sounds of it GM is going to let the Aboma administration act as the defacto bankcruptcy trustee. Why not let this go through an actual bankrupcty proceeding and let people who actually know what they are doing make the decisions rather than letting the politicians use you for their own personal grandstanding as they did with the AIG bonuses?
 

TexasBred

Well-known member
reader (the Second) said:
Wagoner leaving GM with compensation worth $23M
CEO Wagoner leaving General Motors with no severance pay, but pension is worth more than $22M

* Monday March 30, 2009, 2:53 pm EDT

NEW YORK (AP) -- When General Motors Chairman and CEO Rick Wagoner leaves the automaker, he'll take with him a financial package worth an estimated $23 million.

The terms of General Motors Corp.'s government loans prevent it from giving executives severance pay, but they don't affect earned pensions.

As of Dec. 31, Wagoner's accumulated pension was valued at $22.1 million, but he'll receive that in payments over the rest of his life, so the actual amount he collects might be different.

According to GM's latest annual report, Wagoner also will receive about $367,000 in stock awards and about $535,000 in deferred compensation.

Wagoner announced his resignation Monday. Obama administration officials asked him to step aside as part of the government's plan to assist the struggling automaker.

How honorable to give you something you already earned.
 

nonothing

Well-known member
I am just gonna ask a question as I was not privy to any disscussions between Obama and GM....

If this CEO stayed in power and ran GM to the ground with taxes payers money, would that then be blamed on Obama?...Seeing how previous targets may have not been meant.Is not the prudent thing to do to ask for change in those who have been making bad decisions in that company.....All Obama has to say is, listen, these last figures were not met, so either get sombody that can do the job right or the money goes to another cause....
 

aplusmnt

Well-known member
nonothing said:
I am just gonna ask a question as I was not privy to any disscussions between Obama and GM....

If this CEO stayed in power and ran GM to the ground with taxes payers money, would that then be blamed on Obama?...Seeing how previous targets may have not been meant.Is not the prudent thing to do to ask for change in those who have been making bad decisions in that company.....All Obama has to say is, listen, these last figures were not met, so either get sombody that can do the job right or the money goes to another cause....

The prudent thing to do is give them no money, tell them nothing to do and let them file Bankruptcy just like most other businesses do. If they can not come out of Bankruptcy able to operate then let them go the the way of the Edsel, Studebaker and many other car companies that did not make it!

All Obama is doing is postponing it for another 60 days and acting like he is doing something.

In reality the CEO probably needed to go, or maybe not. Maybe it was a sinking ship when he took over, actually it was. Just think if you can not get the unions to break and start over right now at the door of bankruptcy how would this CEO have ever accomplished that when no one thought this would ever happen.
 
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