GM CEO Rick Wagoner has agreed to resign at the Obama Administration's request. Wagner was not the best choice for CEO of GM at this time and his departure will be celebrated by many in the auto industry. The other half of the problem is UAW President Ron Gettelfinger. Will the Obama Administration call on Gettelfinger to resign? Would he be half the man Wagoner is if his resignation would help?
GM CEO resigns at Obama's behest
The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.
Wagoner's departure is one of the remarkable strings attached to a new aid package the administration plans to offer GM.
The White House confirmed Wagoner was leaving at the government's behest after The Associated Press reported his immediate departure, without giving a reason.
On Monday, President Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. (excerpt) read more at politico.com
9 comments:
As much as I wished the government had stayed out of such things, I hope he puts the company on a path to lead into new alternative energy cars. We have to switch from the engine to the motor. Burning things to make cars go is polluting, funds terrorism, and is limiting. An electric based vehicle can run on nearly any source of energy and will fuel a consumer end push towards things like solar roofs.
He needs to fire Ron Gettelfinger from the the leadership of the UAW too. Fat chance.
I agree with Bluegrass Pundit. We need to get rid of the strangle hold of the UAW that has control over the Auto industry.
Thanks for the pingback also
And fordcing people to buy alternative energy cars will not work. Most will just buy foreign cars that do not cost as much and will last longer than the hybrids. Do you know how mcuh it costs to replace the batteries in a htbrid???? Do you know how they make the batteries for htbrid cars now????? It is more environmentally friendly to buy a gas powered car now.
The UAW is a problem. They are the reason the industry needed a bailout in the first place. Parting bonuses were so high that it costs more to downsize than to go bankrupt.
I'm not suggesting we force people to buy electric cars, nor that we put any specific battery tech in them. I'm fine with fuel cells. Most technology is expensive before it is mass produced. If we continue to avoid progress because of the expense of starting, we will be paying for the next terrorist attack and watching those who are willing to innovate take another industry from us.
I have three questions for both the author and those that comment:
1. What benefit has been gained by Rick Wagoner stepping down?
2. How is the UAW the cause of the domestic auto industry problems?
3. How is this a problem with the auto industry when the basic problem is the financial industry won't loan money to buy cars?
If you own a supermarket but nothing sells because people have no money, is that the supermarkets fault?
What most in this country don't realize that if GM and Chrysler go down it will impact all forms of manufacturing, dealerships, legal services, medical services, trucking, textiles, glass, steel, electronics, and countless other industries. Good luck with that.
Barry Eller said...
"1. What benefit has been gained by Rick Wagoner stepping down?
2. How is the UAW the cause of the domestic auto industry problems?
3. How is this a problem with the auto industry when the basic problem is the financial industry won't loan money to buy cars?
1. Very little is gained, but someone had to go to provide cover for additional time and bailout money to be give. It should have been Gettelfinger, but Wagoner has one vote and the UAW has tens of thousands. That decision probably did not take long.
2. The UAW has very restrictive work rules and much higher costs(especially benefit for retirees) than the transplants. In spite of their propaganda, the UAW offered very little in concessions. This caused the bondholders to hold back on concessions too. This is why no viability plan could be achieved.
3. Low sales have certainly hurt the Big three, but they are not the root cause of GM and Chrysler's problems. They were already losing money before the economic downturn. GM has not made a profit in over 4 years. For more information as to why, see my answer to question #2.
Fair enough but let's look at your statements and do a little fact check.
1. Very little is gained, but someone had to go to provide cover for additional time and bailout money to be give. It should have been Gettelfinger, but Wagoner has one vote and the UAW has tens of thousands. That decision probably did not take long.
Gettlefinger is done at the end of the year, due to union by-laws, so for the most part he is pretty much a lame duck.
2. The UAW has very restrictive work rules and much higher costs(especially benefit for retirees) than the transplants. In spite of their propaganda, the UAW offered very little in concessions. This caused the bondholders to hold back on concessions too. This is why no viability plan could be achieved.
Part of this is true and part of this is false. First the UAW has taken pay and benefit concessions on their last two contracts. The average UAW worker makes, with benefits, $5.00 an hour more than the transplants. The medical costs were eliminated in the last contract which takes effect in 2010. The only legacy costs the Big 3 will have after that is for white collar retirees. The bond holders have made no concessions to this point.
3. Low sales have certainly hurt the Big three, but they are not the root cause of GM and Chrysler's problems. They were already losing money before the economic downturn. GM has not made a profit in over 4 years. For more information as to why, see my answer to question #2.
They were losing money in the "Domestic" market but have not only been profitable, but the largest seller in the "foreign" market for the last 5 years. It funny how we think the "foreign" cars are built better and so do the Europeans because there we are the "Foreign" car.
Thanks I enjoy the dialogue...
Barry:
1: I don't know. I think it is largely symbolic and may forebode government taking a big part of his role.
2: As far as cause, there is a group of people in a union that size that keep track of how much has been collected in dues, how long the company can afford to hold out during a strike, etc. When they can afford to strike longer than the company can withstand, they start dreaming up new demands. It isn't that unions are inherently evil, more that any organization of that size where people who are only doing their job can create a self destructive atmosphere, biting the hands that feeds them. My previous comment wasn't meant to say the unions are the cause of the problem, although to some extent I think they are, it was meant to say that they are what prevented the company from simply shrinking with the market rather than collapsing and needing bailout.
3: The problem could be connected to the auto industry both by the rise in vehicle price caused by the unions and the poor decisions on what kind of vehicle to build. I don't see the problem as insufficient credit in the present, I see it as excessive credit in the past. Nearly every sector of the economy has been overleveraged. When things went bad, it cascaded through the debt system. If we hadn't built our lives around debt, we wouldn't have crashed.
Your point about the supermarket is an excellent one. In some sense what we are seeing isn't a lack of demand, it is a glut of supply. People aren't buying because they are nervous and didn't need any more crap anyway.
If the Big 3 go down, it will hurt many. Does that mean that we should dump money on them and prevent they aren't failures? If your employer starts to have problems, could you try to keep your job by going out and buying $10,000 worth of their merchandise? That is what the government is doing. They are trying to get us to buy stuff by borrowing money from us to lend to our employers so we can make a product for them to sell to us. Stop the debt cycle. It doesn't work.
Nice blogs Barry. I'm not sure I agree with your worldview, but it always nice to see someone who has one and can articulate it well, as well as provide a service. I've subscribed to both.
Post a Comment