Wagoner: Now is not Time to Panic

[Ming]

GM's Wagoner: Now is not time to panic
Chief executive talks about accounting, Delphi and his own future
April 5, 2006
BY MICHAEL ELLIS and JENNIFER DIXON
FREE PRESS BUSINESS WRITER
www.freep.com

Asserting that he's the right man to lead General Motors Corp., Chief Executive Rick Wagoner said Tuesday that recent accounting errors under federal scrutiny have been an embarrassment and some people have been disciplined for it.

Wagoner, who won a vote of confidence from the GM board of directors on Monday, said that bringing in an outsider to run the automaker would be a setback at a time when GM is closing plants across North America and in the middle of critical labor talks to try to avert a strike at Delphi Corp.

"People would be paralyzed wondering what this person is going to do," Wagoner said in an interview with the Free Press in his 39th-floor office in the Renaissance Center.

"Nobody knows this business better than I do. Nobody knows GM, its culture, better than I do. I don't think anybody could have better support from our employees than I do. So I think a change would be a great setback, and a big mistake."

Wagoner said the accounting mistakes occurred because "by and large, people were doing what they thought was right but either didn't refer to the specific accounting rules or thought they knew the rules and didn't know them."

GM's next big issues will be addressing labor and supply contract problems at Delphi Corp., its largest parts supplier, as well as awaiting the outcome of investigations by the U.S. Securities and Exchange Commission and two federal grand juries into accounting problems and finances.

Efforts to turn around GM have been partly overshadowed by more accounting errors, which forced GM to delay filing an annual financial report for nearly two weeks, shaken shareholder confidence in its bookkeeping and tarnished the company's reputation.

When asked whether anybody had been disciplined for the new accounting problems, he said, "I've never been a big believer in public executions. Having said that, we have a pretty proactive woodshed."

However, no executives have lost their jobs, GM spokesman Jerry Dubrowski said.

Besides his duties as chairman and chief executive officer, Wagoner said he intends to keep control of day-to-day operations of the troubled North American automotive operations -- but not for too long.

Wagoner's surprising decision in April last year to take direct control of North America was perceived as a "make or break" move to turn around the automaker from a downturn in earnings.

"I don't think having me do both the jobs, the corporate job and the North American job, is the right long-term answer," Wagoner said Tuesday, exactly a year after taking the reins.

The last month hasn't been easy for Wagoner, or GM and its employees as the automaker seeks to slash costs following last year's $10.6 billion in losses. GM dismissed hundreds of white-collar workers, reduced salaried benefits and won court approval of the deal with the UAW to cut health care costs for retirees.

More accounting problems came to light. GM first realized it had problems when it began looking at supplier credits paid out after Sept. 11, 2001. These are credits, or rebates, that vendors give a manufacturer that buys goods from them.

Wagoner said the "supplier payment issue" came to GM's attention as a result of "other things we were asked to look into." He declined to elaborate.

Wagoner said GM did an exhaustive review of its books and found other accounting errors, which had little impact on the bottom line.

Then, shortly before GM was to release its 2005 annual financial report last month, it discovered it had another accounting problem involving cash flows at Residential Capital Corp., the residential mortgage subsidiary of GMAC.

"I think our investigations have shown us that there were accounting errors made. Can't dress that up," Wagoner said, adding it's "embarrassing to us all."

Continued: http://www.freep.com/apps/pbcs.dll/a.../-1/BUSINESS07

[GM-10]

I have been impressed since GM put forth the buyout plan...I wish him luck.

[caalleg]

Found this on detnews.com above a picture of Wagnor. What car is it?

[andretti]

I got news for Wagoner, this is a perfect time to Panic

[plane]

Originally Posted by andretti

I got news for Wagoner, this is a perfect time to Panic

What? Me worried? Nah.

[boblutzfan]

Originally Posted by caalleg

Found this on detnews.com above a picture of Wagnor. What car is it?

It appears to be a picture of an Opel. Could this be an opel based on the new RWD architecture?

[Earl_Buick_Y]

Originally Posted by boblutzfan

It appears to be a picture of an Opel. Could this be an opel based on the new RWD architecture?

This is the Opel Insigna prototype. I think it dates back to 2004. It was meant to be the replacement of the Opel Omega (aka Catera in the US).
There was a rumor that it would be based on the Zeta platform. Since then there are mixed news about the future large/executive Opel.

You can check it out on

http://www.worldcarfans.com/manufact...ufacturer/opel
under the "OPEL SPYPHOTO ARTICLES" section.

Perhaps TOTO has some more info wrt the future Omega?

[paul3230]

Wagoner must be feeling a little worried about his job or he wouldn't be shouting from the mountaintops that he's the right guy for the job

[Jkujo]

If NOW is not a time to Panic Ricky, then when IS? You've made mistake after mistake after mistake. The only positive is that you put Bob Lutz in charge to try to get the designs going. You should be fired on the basis for approving the hideous Aztek!

[VibenPontiac]

Originally Posted by Jkujo

If NOW is not a time to Panic Ricky, then when IS? You've made mistake after mistake after mistake. The only positive is that you put Bob Lutz in charge to try to get the designs going. You should be fired on the basis for approving the hideous Aztek!

No time is the right time to panic...when you panic you make stupid decisions. Panic is not the same as crisis mode. Panicing is haphazard while crisis mode is methodical and thoughtful.

Ever wonder what the auto industry would be like if every executive was held to standards that some on this board have? There simply wouldn't be any auto execs left!

[steverino]

Originally Posted by Jkujo

If NOW is not a time to Panic Ricky, then when IS? You've made mistake after mistake after mistake. The only positive is that you put Bob Lutz in charge to try to get the designs going. You should be fired on the basis for approving the hideous Aztek!

Hands down, It's better looking than the Honda Element & Scion Xb. Oh, I forgot it's made from GM so it automatically must suck

[mikesright]

Umm, Ronald Zallarella approved the Aztec, not Richard Wagoner!

[sigma]

And the Aztek doesn't look all that bad without the plastic cladding.

[mikesright]

Why is it time to panic now? Wagoner just got the GMAC deal through, which means we're more likely to get models like the Camaro out soon (most of the money goes to the cash hoard and debt reduction, but quite a bit of the money will go to finance the car part of the turnaround). The deals also will ensure GM will have the cash necessary to survive this downturn.

There is really no one that can do a better job right now, and certainly not you, VibenPontiac!

[SobeSVT]

Originally Posted by El Wago

Chief Executive Rick Wagoner said Tuesday that recent accounting errors under federal scrutiny have been an embarrassment and some people have been disciplined for it.

Did the spank hurt Ricky?