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GM Chairman and CEO Rick Wagoner said in a statement today that he is resigning at the request of Obama administration officials.
“On Friday I was in Washington for a meeting with Administration officials,” Wagoner said in the statement. “In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have.”
“The Board has recognized for some time that the Company’s restructuring will likely cause a significant change in the stockholders of the Company and create the need for new directors with additional skills and experience,” said Kent Kresa, the GM Board of Directors Chairman, in a separate statement. In addition to Wagoner, most of the board will be replaced.
Wagoner was forced out by Steven Rattner, a former investment banker who now runs the Presidential Task Force on Autos. Rattner threatened to send GM into bankruptcy if Wagoner didn’t resign. The task force was also critical of GM’s restructuring plan.
“We believe our approach to GM is starting with a clean sheet of paper,” said a senior Obama administration official. The task force has promised 60 days’ worth of funding for GM, during which time it is to work with officials to replace top management and create a new, more aggressive restructuring plan. In a summary, the task force also said that GM “may well require utilizing the bankruptcy code in a quick and surgical way.”
Wagoner will be replaced by former chief operating officer Fritz Henderson, who will serve as temporary CEO, and Kresa who will serve as interim chairman.
“Fritz Henderson is an excellent choice to be the next CEO of GM. Having worked closely with Fritz for many years, I know that he is the ideal person to lead the company through the completion of our restructuring efforts,” Wagoner said of Henderson.
Wagoner had worked for GM for 32 years.
Source: GM, The Wall Street Journal, Reuters, CNNMoney
I find the punitive actions taken against the automaker kind of strange. Their problems really came from the credit crunch, which was the fault of lending institutions, which received government bailouts with little or no punitive actions. From everything I’ve seen Mr. Wagoner was steering GM in the right direction before this crisis started, he just couldn’t get there quick enough. I think Mr. Rattner might be trying to name scapegoats to hopefully avoid a backlash like there has been in his own industry.
Who is the [italic]government[/italic] to dictate the management of private enterprises? Wagoner did not embezzle money or cheat with stocks. There was no legally criminal activity. Say what you will about running GM into the ground, but if he was to be removed, it should have been done by a board of directors, [italic]not[/italic] the government. Sure, the industry needs some help. But this? I don’t think most people know what a slippery slope this is.