Custom Search

Rick Wagoner

Rick WagonerGeneral Motors Chief Rick Wagoner Said to Step Down.

General Motors Corp. Chief Executive Officer Rick Wagoner will step down after more than eight years running the largest U.S. automaker, people familiar with the situation said.

The Obama administration asked Wagoner, 56, to leave the company and he agreed, an administration official said. Wagoner said March 19 that he didn’t plan to resign.

The departure of Wagoner comes as President Barack Obama prepares an address tomorrow morning on his plans for the future of the U.S. auto industry. GM is surviving on $13.4 billion in U.S. loans and is asking for as much as $16.6 billion in additional aid to survive. Wagoner was asked to step down as part of the company’s restructuring, the official said.

The longtime GM chief, who has been lampooned on Saturday Night Live and vilified for his central role in the auto- industry collapse, said this month that the hadn’t been asked by the government or his own board to resign and his plan was to finish the restructuring.

“I do it because it’s important and I feel like I have a responsibility to do it,” Wagoner said in a March 19 interview. “I plan to stay here until we get things well in shape and on track and beyond that, we’ll see.”

GM Plans

GM has said it will shed 47,000 jobs globally in 2009 and plans to close five assembly plants. Executives said the Detroit-based automaker will focus on four U.S. brands down from eight and eliminate thousands of dealers. The stock tumbled 87 percent last year.

GM has rallied 66 percent since March 12, when Chief Financial Officer Ray Young said it wouldn’t need a $2 billion payment by the end of this month to survive as originally forecast. The biggest U.S. automaker is benefiting from increased cost cutting, Young said.

Wagoner has run GM since June 2000, presiding over $82 billion in losses beginning since the end of 2004, the last profitable year. Wagoner weathered the losses and activist investor Kirk Kerkorian’s 2006 push for an alliance with Renault SA and Nissan Motor Co.

Long Career

Wagoner has repeatedly argued he knows the company better than most who could take his job. He joined GM in 1977, as U.S. automakers were fending off Japanese competitors who recognized the need a decade earlier to build fuel-efficient vehicles.

As CEO, the former Duke University freshman basketball player and Harvard University MBA early on bet against gasoline- electric hybrid vehicles, focusing research on hydrogen technology. GM offered its first full-scale hybrids in 2007, a decade after Toyota introduced the Prius.

Wagoner kept GM focused on trucks and sport-utility vehicles, only to press for development of the Volt plug-in electric car when gasoline prices soared.

He used the purchase of South Korea’s Daewoo Motor Co. to expand GM’s overseas sales 51 percent to 5.5 million cars and trucks by 2007. He wrung concessions from labor unions in 2007, including cutting wages in half for new hires and offloading retiree health care to a union-run trust by 2010.

Others Ousted

The federal government has previously requested the replacement of chief executive officers at American International Group Inc., Fannie Mae and Freddie Mac when they received aid.

Then-Treasury Secretary Henry Paulson replaced Fannie Mae CEO Daniel Mudd and Freddie Mac’s Richard Syron when he put the two mortgage-finance companies into government conservatorship in September. AIG chief Robert Willumstad left after the Fed took control the same month.

In 1984, federal regulators replaced the board chairman and CEO of Continental Illinois National Bank and Trust Co. after taking an 80 percent ownership stake.

The chairman of Lockheed Aircraft Corp., now part of Lockheed Martin Corp., kept his job when the defense contractor won $250 million in federal loan guarantees in 1971, even after offering to resign.

Original Source :