We hardly picked up any words of wisdom from White House adviser David Axelrod regarding the automotive industry on Meet the Press today. In discussing the automotive companies, Axelrod says, “we’re going to need a major restructuring of these companies. How that restructuring comes is something that has to be determined. But it’s going to be something that’s going to require sacrifice not just from the autoworkers, but also from creditors, from shareholders and the executives who run the company, and everyone’s going to have to get together here to build companies that can compete in the future.” Mostly correct, not entirely true, highly impossible.
What is really needed is a significant change in leadership. Leadership is the only component that has not changed, to date:
First, there is nothing that suppliers can give as GM has already bled them to death with their target pricing tactics or taking the 30 days net discounts even though they are paying net 60, or more. The suppliers are already stretched thin by GM’s purchasing strategies.
Second, while the legacy costs associated with the unions are a point of contention. It is hard to criticize the unions for the recent concessions they have made that make them more competitive in real costs to non-union foreign based workers. With the exception of the elimination of the jobs bank, there is not a lot left to give.
Finally, the recent retirement of Bob Lutz and the move of Tony Cervone to United Airlines, signals that the gravy train days of the executives at GM are obviously over. It is about time. But it is quite overdue.
Conclusion? It is time the entire executive suite be given a layoff in much the same way layoffs are given to the common employee–no golden parachute, normal severance package, and nothing else. As, President and CEO since 2000, Rick Wagoner has been the unproductive force behind GM’s losses in market share, stock price and profits. Wagoner did not take any real or corrective action until he sensed that he could convince Congress to fork over taxpayer money to save his job and his company. Then and now he seems to be real busy and real aggressive in proposing change. For Wagoner, these actions are way too little and way too late in the game. The best course of action for our government is to empty the executive suite and ask Jack Welch and Warren Buffet to build a team of experts to get GM in order. In the meantime, get Rick Wagoner out of GM–he does not deserve a second chance.
What are your thoughts? What do you feel about Rick Wagoner’s performance and whether he deserves to keep his job?