Quote:
Originally Posted by Undertoad
Good: Wagoner out
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Also interesting is what that firing did in GM. Shock. GM management still believed what Wagoner said. First he said GM had no problems other than a bad economy. Then he gets his ass handed back by Congress when he cannot even say how many $billions GM really needs. So he says GM has some problems and he is going to fix it. Well those solutions must be on the scale of closing whole divisions – Pontiac, Hummer, Saturn, Saab, GMC . GM’s attitude is Wagoner's decree - they will simply seek concessions from employees and suppliers. 85% of all problems ….
Finally Obama put into the management, stock holders, bond holders, and BoDs the seriousness of their plight. First he had to remove a person who was optimistic and who foolishly insisted GM had good products. When Obama forced him out, news reports suggested it shocked everyone in GM management back to reality. Good. Their attitude is directly traceable to Wagoner’s decades of lying.
The new guy is only a transition. (More interesting – who will take the Iacocca job?) Even the BoDs need wholesale replacement. GM bonds are now selling for 17 cents on the dollar - $64 billion in outstanding debts - and bond holders still were not demanding change. Under Wagoner, everyone even foolishly believed GM was too big to fail; that bankruptcy was not an option.
Obama gave them time to fix themselves. They did nothing. They pretended GM was OK. 30 years earlier, Gerald Ford and Jimmy Carter made the situation obvious to Chrysler and Ford who in turn immediately fired their only problems - top management. But the White House for most of the past few years has all but promised protection everywhere. Remember George Jr's protection of anti-American steel companies? The protection of 40% higher prices for prescriptions? Finally Obama has (hopefully) put the fear of economic forces into GM and Chrysler management.
Meanwhile Nardelli is negotiating with Fiat as if he has options. Cerebus Capital (private investors) believed they ‘deserve’ government protection. Under Nardelli, Chrysler does not even have one new product in development. Fiat probably only wants Chrysler dealers anyway. Remember how Iacocca saved Chrysler? K-car. Mini-van. New product after new product because the threat of bankruptcy was galloping right behind Chrysler. Today, neither Wagoner nor Nardelli heard that threat (Ford did). So Nardelli will not even sell off his disaster to Fiat. Instead, both are rich and overpaid men who also believe in corporate welfare from the government.
Hopefully, Obama just sent a message to all American corporations that have been stifling innovation for so long in the name of cost controls, money games, and greater profits. Protection of the rich and anti-innovative has ended. How many heard it today? Finally, someone may have stood up for free market capitalism when it is most necessary.