Now that GM stands for 'Government Motors' rather than 'General Motors', the Obama Administration has decided it needed a scapegoat to blame any past and future problems on as it attempts to revamp GM in its own way.
GM's George W. Bush is going to be GM CEO Rick Waggoner:
Wagoner, 56, who spent 32 years with GM working all over the world, stepped down effective immediately, the company said in a statement early Monday. He was replaced as CEO by Fritz Henderson, the company's vice chairman and chief operating officer.
GM board member Kent Kresa, a former chairman and CEO of Northrop Grumman Corp. (NOC), was named interim chairman and said new directors will make up the majority of GM's board when a new slate is nominated for election at the company's annual meeting in August.
"The board has recognized for some time that the company's restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience," Kresa said in a written statement.
GM shares tumbled 86 cents, or 24 percent, to $2.76 in premarket trading Monday. That is down 89 percent from its 52-week high of $24.24 on April 30, 2008.
The management shake-up, according to several industry analysts, shows that the administration is serious about forcing GM to change more quickly and dramatically than it did during Wagoner's nearly nine-year tenure as CEO.
Jeremy Anwyl, chief executive of the automotive Web site Edmunds.com, called the move "political theater" to appease an increasingly bailout-weary public.
"American taxpayers are not happy," Anwyl said. "But this way you're able to point to Rick and say he's gone, and that creates an environment where the loans become politically palatable."
By all accounts, Wagoner made progress in fixing GM. While CEO, he cut its U.S. work force from 177,000 to roughly 92,000 today.
Wagoner also closed factories; shed the unprofitable Oldsmobile brand; globalized GM's engineering, manufacturing and design to save billions; and led a resurgence in quality and performance of its long-neglected cars. In 2007, the company reached a landmark agreement with the United Auto Workers that shifted massive retiree health care costs to a union-run trust and ushered in a $14-per-hour wage for new hires, about half that of a current laborer.
But critics, including many members of Congress, say Wagoner moved too slowly, failing to cut enough of the company's huge health care and pension costs, and relying too long on high-profit pickup trucks and SUVs as gas prices rose and the market shifted toward smaller vehicles.
In the past four years, GM has piled up $82 billion in losses.
It would be interested to see how much of those losses can be attributed to GM's bloated union contracts, pension entitlements and forced compliance with government regulations.
As I mentioned before, the easy solution for GM and Chrysler would have been to let them go Chapter 11, thus allowing them to get out from under the union contracts they were saddled with and make a new start. The feds could have helped out by ensuring the existing vested pension obligations were fulfilled, which would have cost a lot less over the long run.
For the Obama Administration to do any better than Waggoner did, they're going to have to abrogate those union contracts..and I'm betting that won't happen largely because the UAW gave over $11 million to the Democrats in 2008.
So a sin offering was needed to blame the ensuing mess on. Waggoner was it, just like George W. Bush has been it for the mess the Obama Administration has made out of the economy. And between ourselves, I think President Obama enjoyed firing him, for reasons I'll leave to your imagination.