How necessary was Obama's call for the resignation of GM's Rick Wagoner?

[sellitman]

For those who are on LinkedIn this poll is very interesting. Most people that I have Linked to me are business associates. Some are CEO's and most are conservative. So for this poll to be so much in Obama's favor , it amazes me.

Good stuff I believe:

http://polls.linkedin.com/poll-results/30002/pnacc

[saltpoint]

1. I would like to know why GM and Chrsyler submitted plans to

the government that they knew would not fly.

People world-wide need automobiles for personal transport, for business, and so forth. Old dinosaur clunkers or new lean green ones, they're still needed. Still necessary.

Toyota's star rose. Chrysler, Ford, and GM's fell. Health care costs are one variable, but not the primary variable in consumer choice. U.S. automakers failed at the executive level, not at the worker level.

In showrooms world-wide people did not choose U.S. cars over say, Japanese cars.

Given the opportunity to submit a truly reformed plan, it's my impression that GM and Chrysler failed again.

[Still Sensible]

2. I think it is because they were mandated to

submit a plan. The reason the plans were not viable, IMO, is that the bond holders are playing chicken with the companies and the administration. Those bond holders are the bastards that have sacrificed nothing as GM and Chrysler try to, with taxpayer help, get out of this mess.

The UAW has made concessions, despite some here that seem to think otherwise. But if the bondholders don't give in to some extent, it won't matter and GM will go down. I am sure many of the conservative ilk would appreciate the perceived "union busting" that would result from bankruptcy... but I think the administration's hard line at this time is pointed at the bond holders.

Right now, the industry and the administration is between a rock and a hard place. Bankruptcy would leave those greedy bond holder shits cents on the dollar. Unfortunately, if the bondholders don't make concessions, it's a moot point and the company and the union goes down together.

[saltpoint]

6. I think that's a very sound take on this. Yes. I wish somehow that

the working families could be held higher, as it is a shame for top execs to have misrepresented genuine and deep and long-sustaining hard work. And good work.

There was sweat and satisfaction on an hourly basis. The mismanagement seems to be a top-down problem, and a huge problem it is, because everyone down below is holding on to the same lifeline.

[JerseygirlCT]

8. Yes, that makes sense. nt

[RB TexLa]

9. Isn't GM asking bondholders to take around 16 cents on the dollar when they should easily get 30

cents on the dollar in a liquidation.

[JerseygirlCT]

7. "failed at the executive level, not at the worker level". Exactly

There is something wrong in the business the way those running them ran them. I suspect this goes beyond the actual product.

As you say, health care costs are certainly one variable, but I can't help but believe that there are definitely others.

And I do think there's a reason that so many people don't choose US cars. Instead of flogging people for being somehow unAmerican, the people ok-ing and developing cars that don't sell need to look more carefully at their market. If people don't want to buy what you're making, you've got two choices: market what you make much better (IOW, fix your communications) or make something else.

Flexibility seems to be missing here. Those in the lead seemed to miss that there was something very wrong - and doing more of the same wasn't going to fix that.

[saltpoint]

10. Several Bingos and Bullseyes in your post, JerseygirlCT.

A lot of the story may still be in the making, so I don't want to second-guess facts I don't have. But from the early returns, it appears that the Big Execs were not prepared to re-structure either out of pique or basic cluelessness.

I get the feeling they were given a fair shot at it and maybe some personnel for input and guidance, and they either couldn't or wouldn't play ball. That's pure conjecture, but that's the impression that's left.

A fairly-high-up Ford contact of ours indicated some years back that there was rough road ahead for U.S. auto manufacturers. I have a feeling also that attorneys close to that industry have seen this coming. The insider track on this tale has been in the making for awhile, is my guess.

[fumsm]

3. Long overdue.

[Profprileasn]

4. Probably

good that they got fresh leadership but don't think it was a good thing for Obama to be involved in it.

[On the Road]

5. It Represents a Consensus That Has Been Around for Years

A lot of business publications have been very hard on Wagoner and recommended exactly the kind of things Obama is proposing now.

I am glad that Obama is retaining popularity with business. That more than makes up for RW populist "outrage".

On Edit: Obama's involvement is a little shocking. But it's an admission that the board of director system and corporate governance in general is not working. Knowing when to let the CEO go is the single most important job of a board, and they are all way too acquiescent. Compensation follows right behind. There's got to be a better way.

[blue_onyx]

11. He probably needed to go

but I don't think it will be the cure-all people think it is.

[Odin2005]

12. GM needs a total shake-up, it's been going in innovativeless inertia for too long.

It needs fresh thinking.

[SharonAnn]

16. Remember, even Ross Perot gave up on them ever changing. He sold and left.

[gmoney]

13. isn't the gov't poised to be the major shareholder in GM?

And having the guy at the top who's never had a profitable year seems like a good place to start cutting. Still can't believe he got a $20MM golden handjob...

[1]

14. we don't like ceos. if one loses his/her job we like that. so it was necessary. fuck 'um...

[kwassa]

15. No, it wasn't necessary and probably counterproductive

Wagoner greatly reduced GM's legacy costs by negotiating new labor contracts with lower starting wages, and moving healthcare costs over to the union. He was actively solving GM's problems.

But he is in charge of GM, and somebody has to be the scapegoat. This is a universal impulse everywhere; the guy in charge is always responsible, and has to fall on his sword.

Many of ALL the auto companies problems, foreign and domestic, have to do with credit markets , and have NOTHING to do with the proper manufacture of quality automobiles.