President Barack Obama has showed his teeth. He’s told the boss of GM to resign. Presumably he wouldn’t have done that unless he was about to give GM the billions in loans the company is asking for. The president needed to get some collateral, didn’t he?
Rick Wagoner was never a car guy. I met him several times and honestly his eyes never showed the slightest flicker of interest when the subject came up. There was no clue he wasn’t running a washing-machine maker.
He got other people to design and engineer the vehicles. He didn’t interfere. If they were talented, that was fine. And in Europe, they have been pretty good. But if those designers and engineers did badly, GM knocked out a clunker and Wagoner didn’t know the difference.
He kept himself busy with another task. A boring but necessary one. He had to sort out the ghastly mess of GM’s finances. Persuade tens of thousands of workers to take redundancy, closing dozens of factories. Drive down the costs of pensions and healthcare. Cut better deals with suppliers and dealers. Trickiest of all, negotiate endlessly with Wall Street to secure lines of credit to keep the whole wobbly edifice afloat day-to-day.
But he’d been in charge for eight years. He’d got costs down. His engineers had got the vehicles more and more reliable. They were on the way to becoming better cars, full stop – more attractive, better to drive, more economical.
But the car range hadn’t got good enough fast enough. Obviously it hadn’t, or GM would have made money in the good years, 2007 and 2008. Instead it lost billions.
GM’s top management didn’t expect Wagoner to get the heave-ho.
And that just shows how staggeringly out of touch those guys have been with the American public. If a corporation is asking for loans of $30 billion of public money, it’s obviously a company that has failed catastrophically in the past.
The boss must take responsibility. The public, in Britain as well as the US, has got pretty fed up with heads not rolling. President Obama has a talent for reading the public mood. He could see that Wagoner had to go.