James B Treece
Automotive News
11-20-08
Crunch the numbers, and they'll tell you Rick Wagoner should be out as General Motors' CEO.
Set aside his weak performance at congressional hearings, where he appealed for government funds to keep his company afloat. Set aside the clear message from senators and representatives that GM's management and strategy should change before taxpayers let the automaker feed at the federal trough.
This is purely about his company's performance and the judgment that GM's board should render on his time at the helm.
General Motors' net loss of $2.5 billion in the third quarter marked the fifth straight quarter in the red. Since 2004, Wagoner has led the company to a cumulative loss of $72.3 billion.
What adjective shall I use? "Staggering"? "Phenomenal"? "Jaw-dropping"? How about
: "chairman-dropping"? I cite precedent.
In the late 1980s and early 1990s, GM's board of directors endured catcalls while the company hemorrhaged market share and losses. Directors were derided as "pet rocks," the epitome of an ineffective, unengaged board.
Finally, the board had had enough. GM's cumulative losses mounted to $27.9 billion over 1991 and 1992. Officially, then-Chairman Robert Stempel resigned on Oct. 26, 1992. In fact, he left because the board fired his top lieutenants, and he was next on the list.
Even allowing for inflation, Wagoner clearly has passed the financial threshold where his ouster is justified.
Wagoner, 55, has dug the once-proud auto giant into a very deep hole. It may or may not prove to be GM's grave...
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