Wagoner's New Reduced Role At GM

This week we have a change in GM's top management, and more excuses from Rick Wagoner for its continuing problems.


Wednesday's Wall Street Journal carried an article detailing the elevation of 'Fritz" Henderson's rise to COO. The piece states,


"Two years ago, General Motors Corp. Chairman and Chief Executive Rick Wagoner won a battle to keep his job, in large part by convincing his board he had the best plan for restructuring the auto giant.

Now, with GM still not making money, Mr. Wagoner has turned over responsibility for the company's sprawling day-to-day operations to Frederick "Fritz" Henderson. Speaking to reporters yesterday at the Geneva auto show, Mr. Wagoner outlined what his role will be in the auto maker's hierarchy, saying that he will focus on global growth, advanced technologies and environmental lobbying.

"At the top of the company, we've been somewhat stretched," Mr. Wagoner said. With "two people doing three or four jobs," he said, he "always felt like I was running from pillar to post." "


As CEO of GM, why didn't Wagoner do what was necessary years ago to be properly staffed and handle the company's problems? The Journal article continues by noting,


"But some investors are still unhappy with Mr. Wagoner's restructuring. GM is widely expected to lose money this year -- the fourth in a row -- even though it has cut $9 billion in fixed costs, shed a third of its hourly work force, and improved the quality of its cars and trucks.

"Where is the multipoint plan from Wagoner?" said SAM Asset Management President Bill Smith, whose firm owns about 30,000 shares. "When I got involved in GM shares two years ago, Rick was out there with a plan. He cut the dividend and so forth ... but where is the plan now?"

GM shares spiked last fall on enthusiasm about its new labor contract with the United Auto Workers, but since have lost almost half of their value. Yesterday, they closed at $23.07.

GM's market value of $13.06 billion is about a third of its value at the beginning of the decade when Mr. Wagoner became CEO."


Call me sceptical- hey, it's the name of the blog- but I don't see how the same guy who, as CEO, lost 1/3 of GM's value, is going to magically become an asset to the firm once he has a COO. If this were so important, why didn't he do it several years ago?


Perhaps GM shareholders, of which I am not one, have the pleasure of seeing Wagoner at last stop wrecking the company by his operational role as CEO. The piece concluded with Wagoner opining on performing less operational duties,


"Now, without having to manage daily operations, Mr. Wagoner plans to spend more time on so-called transformational issues such as environmental regulations and new technologies likely to reshape the auto industry down the road.


Mr. Wagoner said he also hopes to at least double his amount of annual visits to China, a fast-growing new market where GM has become well-established. Visiting roughly twice a year in the past "didn't feel right," he said.

At the Geneva show, he unveiled a new type of hybrid power train that GM plans to offer in a range of vehicles in the U.S. by 2010."


Translation- keep Rick on the road making appearances and let someone more competent actually try to pull GM out of the ditch?