GM Stands by Its Man

By Marty Padgett August 5th, 2008

Email this page to your friend:

Despite a surprise $15.5 billion loss in the second quarter, and the drumbeat of lower truck sales and shrinking market share, General Motors' board of directors is firmly behind Rick Wagoner.

Friend of the TCC house John Stoll reports over at the Wall Street Journal today that Wagoner's leadership at GM isn't in question whatsoever, despite the dark news surrounding the company throughout the past six months. While Wagoner and his executive team carved out and implemented a recovery plan for the automaker, the world changed around them--and that's why he's in no danger, Stoll reports.

"The board is totally behind Rick, realizing nobody could deal with this situation any better than he," a source close to the GM board told the Journal. "It's a case of an excellent plan, [and] delivering on all promises."

Wagoner has survived a remarkable downturn at General Motors since his arrival in 2000. A continuing drop in market share has left GM with only about 20 percent of the U.S. market right now; at the start of the decade, GM execs were working feverishly to preserve a 28-percent share, even then a historic low.

To Wagoner's credit, the piece says, GM has cut equally historic deals with the United Auto Workers, turned around the quality of its cars and trucks, and seeded strong growth in China and other world markets outside of stagnant Europe and shrinking North America.

To give some momentum to its latest turnaround plan, GM announced last month it would cut more trucks from its production plan while it pushed ahead the launches of several new cars and crossover vehicles, including the 2011 Chevrolet Cruze; the 2010 Cadillac SRX and Saab 9-4X; the Chevrolet Equinox; and an unnamed Buick sedan that likely will replace the Lucerne in 2010.

Posted in : 2008, GM, Industry News |

Previous Post
"Smart" Cars Pass a Euro Hurdle

Next Post
Death Valley Days: 2010 Kia Sorento...

2 Responses to “GM Stands by Its Man”

You know what? I think I somewhat agree with this. GM quality has improved; although I would attribute most of that to the quality of work put in by the employees. I work for a big bank that’s drowning with this mortgage mess. Our CEO is doing nothing to fix it. At least Rick’s trying…

Rick Wagoner inherited 20 years of bad decision making at GM. A complete lack of attention to small and mid-size car development over that time has cost them dearly and will continue to cost them over the next several years. Beginning with the fwd shift in their mid-size cars in 1988, GM began a pattern of replacing desirable products with less-desirable products, causing their slow deterioration in market share.