Sunday, March 29, 2009
Auto CEOs axed
It was an especially bad day to be the head of a major automobile company:
GM CEO Wagoner to step down at White House request
Top French carmaker ousts CEO Christian Streiff
I can't think of a more impossible job than running either of those entities, except possibly being the head coach of the Oakland Raiders and working for Al Davis. Good luck to whomever succeeds Wagoner and Streiff (that is, assuming Wagoner's successor isn't already being picked by the White House and Treasury, in which case I wish them extra luck).
The other automobile business news was the potential engagement party being thrown for Chrysler and Fiat. It's probably because I had an old Fiat 124 convertible when I was in my early twenties, and the damn thing never ran well, so I am biased, but the best deal out there is for Chrysler to hook up with an Italian auto maker? Chrysler: the Germans didn't like us, but the Italians will love us.
10 Comments:
By 
My name is Inigo Montoya, at
Mon Mar 30, 01:09:00 AM:
Who in their right mind (or Right mind :p) would want to go and run one of these companies?
Down here in Australia, the continuance of an auto industry (without any domestic auto companies) is seen as a political must. Is it unlikely (impossible?) that in the US the political class will allow the market to do what it has been trying to do for decades - eliminate the US auto makers?
During the last election in Aus, both leaders of the major parties pledged that they 'didn't want to be the Prime Minister of a country that didn't make anything anymore' - WTF?
There is nothing separating this attitude from a leader saying 'thanks, but no thanks for the Industrial Revolution - we like the majority of our economy being involved in inefficient food production'.
A little off topic, but leading to my final point (are you ready?)
It appears that running these firms is becoming much more of an organised and regulated exercise (read bureaucratic) - the very thing that has stifled these organisations in the past...
By davod, at
Mon Mar 30, 05:38:00 AM:
"(that is, assuming Wagoner's successor isn't already being picked by the White House and Treasury, in which case I wish them extra luck)."
What better way to solve the industrial relations problems than by placing Ron Gettlefinger in charge. Ron would not only be able to ensure the workers stayed in line, he a could also be instrumental in ensuring GM improved its performance over Ford and Chrysler.
By 
, at
Mon Mar 30, 09:44:00 AM:
This truly is good news! It will allow Mugabe Obama to name one of his trusted associates to run GM. I'm thinking Kwame Kilpatrick, recently mayor of Detroit and well known in Michigan circles, a friend or relative of John Conyers, whose wife is on the Detroit city council and has been for years, or a friend or relative of Maxine Waters, Southern California Congressman and total doofus. Obama's appointment of a marginally competent relative of Waters would follow the methodology he used in selecting Biden.
By , at
Mon Mar 30, 11:41:00 AM:
Obama's remark's:" Rick Wagoner is not being made the scapegoat here."
Let me traslate this for you: "It's just that he (RW)is another capitalist conservative who needs to be exterminated from my BRAVE NEW O-WORLD. The fact that he didn't vote for me had nothing to do with this...."
"This is not personal, it's strictly a communist tactic I use alot. You might as well get USED TO IT....."
By , at
Mon Mar 30, 12:31:00 PM:
If any of you heard the O's remarks re the U.S. auto industry today, you may well want to start serious contingency planning for your future. This speech was nothing but sophistry, and Stalinism at it's finest.
At first I said to myself, surely he doesn't believe these things he's saying...but of course he DOES. In one quick slash he has beheaded one of this nations greatest companies, and turned it over to eggheads, environmentist wackos, trade unions, and our foolish government.
This is the first. It will not be the last. Can anyone suggest a good country to move to....? This one's turned to shit.
By , at
Mon Mar 30, 12:33:00 PM:
Dumb post.
First, why was this was "an especially bad day" to be an auto company CEO? Presumably you are referring to Wagoner's firing, but I see that event as an especially bad day for America more than Wagoner. He can just take his government guaranteed pension and move quietly off to Naples and just forget about the whole mess, so he'll be fine. We, on the other hand, are still stuck with an administration determined to bail out the auto unions with taxpayer cash in bushel loads, which is why the nightmare is just beginning for us.
Next,"impossible job"? Why is it an impossible job? There are lots of difficult jobs in this country and most of them require the CEO to figure out how to get capital. Not so for the new CEO of GM, who has the U.S. Treasury backing him. Most CEO's have to figure out business strategy, but the CEO of GM has a White House Task Force telling him what to do.
It not only is far from an "impossible job", it actually looks like a pretty easy gig. Undoubtedly there's a big payoff at the end too.
By , at
Mon Mar 30, 12:37:00 PM:
So, the best way to save Chrysler jobs is to outsource the ownership to a European car maker?
By Escort81, at
Mon Mar 30, 03:03:00 PM:
Anon 12:33 - I meant "especially bad day" in the sense that two CEOs were fired in one day, so it was the coincidental aspect I was trying to stress. I didn't mean to imply that they should keep their jobs because of some strong track record of performance!
On the "impossible job" language, that was intended to be partly humorous, as indicated by the Raiders reference. Your point about capital raising is an excellent (if painful, from the taxpayer's standpoint) one. Taking it to its illogical extreme, we could pour 10 times the amount of capital down the black hole that GM has become, but unless it adresses the fundamental structural impediments to success (legacy labor costs, union work rules, car designs that don't sell, a powerful but shrinking and now-wounded-animal dealer base, etc.), it probably won't get to the point of being a business that can generate a non-negative return on capital. That suggests to me that the job of running it will likely be pretty tough.
Regarding your last sentence about payoff, I haven't read anything, but assumed that there will be some cap on GM's new CEO's pay, in a similar fashion to the caps on institutions receiving TARP money.
By , at
Mon Mar 30, 04:37:00 PM:
Wagoner's team negotiated a new "floor" wage with the UAW which will lower some major aspects of production costs.
It will begin to take effect in 2010. And the new management can take credit for that.
This immediate problem was foreseen about 10 months ago, when it was projected that total US annual car sales for 2010 model year (and following years) would drop from a high of about 15.5 million to about 13.8 million units. This meant that somebody was going to lose market share. Guess who?
The recession has probably added to all maker's woes, not just the Big Three.
Added on to that is that the profit leaders for the domestic Big Three are SUV's and full size trucks. Four dollar a gallon gas killed that market last summer.
There are some really good car makers in the United States. But they are Japanese marques.
-David
By TOF, at
Tue Mar 31, 11:58:00 AM:
If Wagoner folded so easily he didn't belong there in the first place. They should file for Ch. 11
