By on December 8, 2008

Jalopnik’s Editor and I have had some major differences of opinion. Ray Wert recently opined that a Chrysler-GM merger made good business sense. I disagreed. When Jalopnik sold “Save GM” t-shirts and claimed it was ironic, I said it was absurd. Today, Wert posted an editorial entitled “The Case for GM CEO Rick Wagoner.” Again, I disagree. The rant is deeply misguided, the logic and conclusions just plain wrong. And in a twist of [yet more] unintended irony, the editorial stinks of the sloth and corner-cutting that’s brought GM to its knees.

“While we’ve been a vocal critic [sic] of GM’s glacial restructuring effort,” Wert writes. “We’ve got to say the automaker probably should stick with the girl they brought with ‘em to the ball — no matter how ugly.” This is no argument at all– unless you find the admonition against ‘changing horses mid-stream’ inherently compelling. General Motors has followed this non-strategy– stick with the same tired brands, the same poor products and planning, and the same incompetent management– for the past four decades. To no avail.

So what’s the justification, in Wert’s mind, for backing a loser? “Mostly because we can’t name anyone better who’d understand the product and the bureaucracy of the General.” Obviously, Wert’s inability to name a suitable replacement for GM CEO RIck Wagoner doesn’t preclude the possibility of his or her existence. In fact, it underscores the paucity of imagination suffered by the pro-Big 3 establishment collectively; demonstrating General Motors’ longstanding assumption that if they can’t do it, it’s not possible. Remember when GM said it was nearly impossible to make money on small cars?

Is it really that hard to find an executive that meets Wert’s supposed requirements, understanding GM’s product and bureaucracy? Even I understand GM’s products, and I have no managerial skills above the level of lemonade stand. As for grokking the complexity of GM’s bureaucracy, this is a double-edged sword. Any executive that comes from within GM doesn’t just understand the bureaucracy– they are the bureaucracy. While the FBI recruits mobsters to act as informants because they understand the mafia, it doesn’t recruit mobsters to work as actual FBI agents.

Wert opposes bringing in someone outside of GM because “… to bring in someone completely new to figure out that bureaucracy takes time GM just doesn’t have without tens of billions more in public monies.” But that’s the real issue here. This is public money. And while the taxpayers don’t get stock certificates (perhaps they should), why would we want the same management that carelessly squandered billions of dollars of GM’s privately-raised money? We have no reason to believe that Rick Wagoner’s cronies will be more careful now than they were before.

As for figuring-out bureaucracy, a new CEO doesn’t need immediately understanding of the company’s bureaucracy. They need to keep the company running more than the “two months” that Wert over-pessimistically prognosticates GM has left.

The “better scheme” that Mr. Wert then proffers reads like a sort of class president campaign flyer. “What this automaker needs … [is] an external force moving the current leadership to change quickly.” They also need 1000 mile-per-gallon sports cars. Neither is possible. Neither is orbiting possible. General Motors does not change quickly, and Rick Wagoner has never shown any proclivity for the kind of fast action the company so desperately needs. Hanging-up the phone on Carlos Ghosn doesn’t count as fast business action any more than driving to DC.

Not all that surprisingly, Mr. Wert’s pipe dream plan of adding yet another layer of bureaucracy to General Motors isn’t even internally consistent. Too little oversight of Wagoner, and we’re at the status quo, with public funding down the drain. If a board of independent assessors is going to scrutinize Wagoner’s every decision, why have him there at all? You lose the purported benefits of Wagoner “knowing his way around GM’s bureaucracy.” And in so doing, you actually amplify GM’s traditional problems.

I certainly don’t think Red Ink deserves all the blame for decades of chronic mismanagement at General Motors. But he’s the man in charge of the firm now. The executive who’s been CEO for eight and a half years. Prior to that, since 1992, Wagoner  high level executive positions. So he deserve plenty of blame. And he can no doubt survive taking one for the team with the small fortune he’s banked over the past 16 years.

It’s intriguing that GM posted a mea culpa to the Facts and Fiction site a few days ago. But absent major action, it’s meaningless. Mr. Wert can’t sprinkle their support for the status quo with a handful of criticisms and think it properly qualifies his opinions; that is the very definition of an apologist.

The “Case for Rick Wagoner” ignores reality. GM’s CEO is a failure. What’s more, he’s the public face of a company that needs a complete change of direction AND identity. General Motors must ditch Wagoner to tell all the disenchanted former GM owners and all those opposing the bailout that things really are going to be different. For GM, keeping Wagoner would insist on the status quo. For Mr. Wert’s part, he fills the role of accomplice journalist fairly well.

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33 Comments on “Between the Lines: Jalopnik’s Ray Wert Writes “Case For Rick Wagoner”...”


  • avatar
    John R

    Incidentally, someone asked (in the comments), “When should Wagoner go? When GM makes money??” Wert responded with “When stake holders tell him to.” Same person then said, “Where were they in the past ten years?” Wert hasn’t fired back yet…Must be busy.

  • avatar
    schadenfred

    I’m banned from posting at Jalopnik (and therefore never really go there anyway), but is this a “contrary for the sake of being contrary” editorial just for the purpose of generating click throughs and ad revenue, or do you think Wert actually believes this?

    Man, I miss the old days of Spinelli’s sputtering apoplectic fits while Robert was talking circles around him in podcasts. Good times…

  • avatar
    GS650G

    If Ford can bring in outside talent, and Mullaly is talented, to run their company why not GM? Surely Ford has the same red tape disease that GM has (and probably Chrysler too) so there is precedence.

  • avatar
    toxicroach

    His argument is essentially that Wagoner screwed the company so hard its too late to bring someone new in because by the time they learn the ropes the company will be dead.

    The key to job security, therefore, is to screw up so bad that no one else can possibly get a handle on the situation before it goes nuclear.

    Brilliant logic.

  • avatar
    Justin Berkowitz

    schadenfred :
    is this a “contrary for the sake of being contrary” editorial just for the purpose of generating click throughs and ad revenue, or do you think Wert actually believes this?

    I don’t communicate with Ray Wert so I don’t know what his intentions were. And for obvious reasons I’m not about to speculate.

    But what I will say is this: if it was, as you speculate, aimed at being contrary for the sake of being contrary, that’s bad journalism – even in the context of blogs. If one is going to go down that road, it should be described as such. Call it a thought experiment, or “for argument’s sake” or say that it’s merely meant to provoke discussion.

    On this particular issue, however, I don’t think “whether Rick Wagoner should stay CEO of GM” is a ripe topic for a robust debate.

  • avatar

    “Mostly because we can’t name anyone better who’d understand the product and the bureaucracy of the General.”

    Is this guy for NSFWing real? The noose around the General’s neck IS its bureaucracy – it needs to be eliminated. Sticking with management that knows nothing else but the quagmire of a system that has suffocated itself for decades has no possible upside.

    GM needs a Welch-like eradication of bureaucracy – not an excuse for putting up with it. GM doesn’t even have to fly all the way to Connecticut or 30 Rock to learn how – just take a drive down the Southfield and visit Mr. Mullaly in Dearborn. He’ll give you a blueprint – and it starts with walking papers for Mr. Wagoner.

  • avatar
    Pch101

    It’s too late to gun for Wagoner under the belief that removing him would do any good. At this point, everything is too little, too late. The GM of today simply cannot be saved, with or without Wagoner.

    Wagoner is a problem, but GM’s problems go far beyond Wagoner. The corporate culture is so toxic that changing one person, or even a few, is not enough.

    Wagoner is a symptom of the disease, a byproduct of a whining, ineffective culture that is incapable of competing effectively in an aggressive market. There are thousands of people just like him mismanaging aspects of the company. The lifers such as Fritz Henderson won’t make substantive changes, and a maverick outsider who tried to make far reaching changes would just be rejected.

    A turnaround would require a substantial purging of middle and upper management and a massive hunt for new outside talent to replace the old guard. It would require at least a decade to succeed, and unless the company is subsidized, GM doesn’t have a decade to get there.

    At this point, the bankruptcy wouldn’t help, either. Bankruptcy won’t make the cars better or force the existing management to be more talented and customer oriented.

    The only solution left is to sell the business, assuming that someone would actually buy it. The US government should be getting into a room with VW, Renault-Nissan, Fiat, Tata and anyone else who will show up to talk about selling it. If that includes parting it out, then do it.

  • avatar
    troonbop

    “If one is going to go down that road, it should be described as such.”

    Glad I left journalism after ten or so years – there seems to be so many new regulations. Seriously, Justin, from where are you pulling these rules? Can i buy the manual?

  • avatar

    Wagoner is a problem, but GM’s problems go far beyond Wagoner. The corporate culture is so toxic that changing one person, or even a few, is not enough.

    Like dominoes (and domestic auto manufacturers), it starts with one. The legions of ass-kissers that paint the fantasy world around him will quickly find themselves in exodus.

  • avatar
    Pch101

    The legions of ass-kissers that paint the fantasy world around him will quickly find themselves in exodus.

    The ship is heading for the iceberg, and it’s too late for a new captain to turn it. The legions to which you refer are going to fall into the water, anyway.

  • avatar
    Justin Berkowitz

    troonbop :

    Glad I left journalism after ten or so years – there seems to be so many new regulations. Seriously, Justin, from where are you pulling these rules? Can i buy the manual?

    No, it’s available for free on the website of the Society of Professional Journalists. They state in part “Journalists should be free of obligation to any interest other than the public’s right to know.”

    If schadenfred’s question of “did Wert just write this for the click throughs” can be answered with a yes (and I don’t believe that’s true), then it’s deeply inappropriate.

    Do you think it’s ethical for someone posing as a journalist or news analyst to write an opinion piece that they don’t actually believe, just for profit? Doesn’t the public have a right to know if someone writes an article they don’t believe for the purpose of stimulating discussion?

    Now, I don’t think Wert wrote his piece just to stir up the pot. But I was answering someone’s hypothetical question.

  • avatar

    Dark Shadows
    Jim Dollinger
    Monday, December 12, 2005

    WAKE UP

    On a sweltering summer day, an old man went down into a cool cellar for some relief. The moment he entered, he was blinded by the darkness. Don’t Worry, said another man in the cellar, it is natural that when you go from light to darkness, you’re unable to see. But soon enough, your eyes will grow accustomed to it, and you will hardly notice that it is dark.

    My dear friend, replied the old man, turning to leave, that is exactly what I am afraid of. Darkness is darkness, the danger is convincing your self that it is light.

    As I said everyone should wake up as each day goes by Wagoner is piling dirt on the exit from the cellar. I.E. everyone is in they dark, they just think it’s light.

  • avatar
    CarnotCycle

    I found it kinda funny about the photo gracing Jalopnik’s editorial. All these guys with paper bags over their heads demanding that Wagoner be fired…at Ford Field for a Lion’s game. In Lions jerseys. Were the paper bags over their heads intended to disguise the fact that they were GM employees or Lions fans? So many tough choices in Detroit during these turbulent times, such as Why am I wearing the paper bag on my head TODAY?

  • avatar
    LHeckert1986

    As a faithful Jalopnik reader, they have a freedom of speech… just as you have! If they really bother you that much don’t read their posts!

    Rock On Jalopnik!

  • avatar
    Justin Berkowitz

    LHeckert1986 :
    December 8th, 2008 at 3:22 pm

    As a faithful Jalopnik reader, they have a freedom of speech… just as you have!

    Yup. And if I was arguing that they should be censured by the government, freedom of speech might be an issue.

    If they really bother you that much don’t read their posts!

    On the contrary, I enjoy reading what Ray Wert has to say. But perhaps you want to take your own advice?

    Rock On Jalopnik!
    If you say so.

  • avatar
    Honda_Lover

    Rick Wagoner = Saddam Hussein. See 2002-2003 US Policy on that. Implement.

  • avatar
    guyincognito

    I can’t believe anyone could seriously argue for Rick Wagoner to stay on as CEO of GM. Whats a guy gotta do to lose that job? Mullaly came in from outside of Ford and has done wonders to rationalize their business and cut through the bureaucracy. Shame he’s not a car guy or they’d really be doing well.

  • avatar
    phattie

    I cant post on any of Jalopnik (and related) blogs because they have some type of crasy Javascript requirement.. i have ScriptBlock (right click and see how many scripts they want to run just to make the site run properly) on and im not letting a bunch of AdWare sites log into my laptop just to post.

  • avatar
    M1EK


    Remember when GM said it was nearly impossible to make money on small cars?

    I remember when several of your commenters insisted that was a fact as well. I recall fighting alone against them.

  • avatar
    Bunter1

    Ironically, Wert seems to demonstrate an adherence to the very mind set that has destroyed the General.
    Since we can’t imagine another way to do it, there must not be another.

    M1EK-IIRC one of the first things Big Al did at Ford was ream them for not figuring out how to make money on the Focus. He didn’t have much time for lame excuses and conventional “wisdom”.
    He knew others had done it and wanted it done.

    GM NEEDS new leadership.

    Shoot, they need leadership period.

    They need a shepard, not just a “lead sheep“.

    It’s not like RIR will suffer.

    Bunter

  • avatar
    Bunter1

    Oops. Make that “shepherd”.

  • avatar
    Patrickj

    While the FBI recruits mobsters to act as informants because they understand the mafia, it doesn’t recruit mobsters to work as actual FBI agents.

    Simply brilliant!

  • avatar
    Justin Berkowitz

    M1EK :

    Remember when GM said it was nearly impossible to make money on small cars?

    I remember when several of your commenters insisted that was a fact as well. I recall fighting alone against them.

    Cool

  • avatar
    psarhjinian

    I can’t believe anyone could seriously argue for Rick Wagoner to stay on as CEO of GM

    I can. At this stage, there’s so much wrong that canning him wouldn’t do damn thing, especially if someone like Lutz or Henderson is there in the wings, waiting to replace him. And behind them are reams of awful management. You’d have to gut the company.

    Since we’re going to hit the iceberg anyways, you may as well keep the people who know where the lifeboats are.

    Unless GM were willing to submit to a total reorganization, with new, empowered leadership and a completely new board of directors, dumping Wagoner would mean more harm than good. Hell, even if you gave them a managerial enema you’re still looking at six months of total chaos at a time when GM has no margin for error. Ford’s decision to bring in Mulally when times were (reasonably) good looks better all the time.

  • avatar

    @ Justin: I don’t communicate with Ray Wert so I don’t know what his intentions were.

    Our cryptic e-mail user system that uses our first name is pretty difficult to decipher. Although you didn’t seem to have a difficulty when you were applying to work for me back in March.

    But if your memory is short or if that’s too difficult, feel free to use the cheat sheet we’ve got on the sidebar of our site.

  • avatar
    gm-uawtool

    It’s easy to say get rid of Wagoner, who I happen to think has done a decent job considering the hand he was dealt. But who are you going to replace him with? Yes, Mulally has Ford in a better cash position, but that’s only because he mortgaged everything when money was available. Their sales stink just as bad and their product pipeline is less robust than GM’s. After the launch of the F150 what is there? The Camaro will take chunks out of the Mustang’s hide, their SUV’s are dead, and the cars are struggling. Besides, Wagoner is willing to work for a dollar. Any takers for that salary?

  • avatar
    Lumbergh21

    The Camaro will not take any significant chunks out of the Mustang hide, even if it is ever put on the market. I had an interesting conversation two weeks ago with a lady who was getting into her 2007 Shelby GT500. She was a GM person who had been waiting for the promised Camaro, but could wait no longer. She and her husband ended up buying the Shelby and she absolutely loved it. All of the years of promising a Mustang fighting Camaro have resulted in serious fatigue on the part of its potential buyers. Couple this with the fact that Mustangs have traditionally out sold Camaros by a huge margine and you are only kidding yourself to think that GM will ride back to profitability in a Camaro. Ford will have a redesigned Mustang released before GM releases the new Camaro that they have been trumpeting since the year after the current Mustang design was released. Ford has demonstrated that competent executives exist outside of the domestic car business. It’s a shame that GM didn’t have the foresight 5 years ago to get a compitent man to lead their corporation. Like others, I fear that it may now be too late.

  • avatar
    gm-uawtool

    Mark my words, the Camaro will embarass the Mustang in every regard. I’ve seen the “redesigned” Mustang – very difficult to tell from the current model, and still has no IRS. Besides, I’m not suggesting that the Camaro will lead GM back to profitability. But it will again show people that we can build best-in-any-class vehicles. I’ll bet you didn’t know that Road & Track recently did a four-car comparison of pocket rockets, essentially a Japanese invention, and chose the Chevy Cobalt SS as the top car over Mazda 3speed, Mitsu Lancer and Subie WRX.

  • avatar
    Pch101

    Mark my words, the Camaro will embarass the Mustang in every regard.

    You should not be surprised if the Camaro program is canceled or substantially delayed. Why would the feds want to pay for this if it can’t make any money?

  • avatar
    Bunter1

    gm-uawtool: you might want to note that Ford’s sales were ahead of the industry average this last month (31% drop vs. 36.7%) and GM’s were below (41%).

    Ford (and Honda and Toyota for that matter) gained market share GM lost. They have performed better in sales over the last year fairly consistently.

    GM’s sales were also against an 11% loss last November that softened the comparison. Toyota and Ford were flat last Nov., Honda up even with a double digit cushion they left GM standing.
    Figured with Cryco’s -2% last year GMs result last month puts them about level last month-at the very bottom of the industry.

    GM is in ugly city with the buying public, don’t kid yourself.

    Frankly I’m not sure about your product pipeline assessment either. Ford has better small cars coming sooner. A real hybrid sedan hitting dealers soon vs. BAS bandaid jokes that add 1-2 mpg real world and vaporware that may never appear (we know the re-Volting subject).

    Look at GM’s market share 8 years ago, look at it today. Look at the trend line. Still down.
    Ford’s may have stabilised (may).

    Rick is an unqualified failure. He has continually repeated his predcessors mistakes and routinelly misrepresented GM’s financial status to the public and…yes, to you, his employees.

    You of all people should want him OUT.

    BTW: I have owned three GM vehicles, more than any other corp, and no Fords so this isn’t just fanboy struting.

    Just some thoughts.

    Bunter

  • avatar
    porschespeed

    The only way to change the corporate culture is to completely empty out the Tubes – more or less.

    The new people have to outnumber the old – or there will be no change. The new people have to (mostly) have superior positions to the old, or there will be no change.

    Business 101.

    Companies in other industries have pulled this off before (though the GM train long ago left the salvation station). Post C11, this is their only chance at redemption.

  • avatar
    Lumbergh21

    My point is that no matter how fabulous the Camaro is, most people will still buy a Mustang instead. My second point was regarding the time it has taken to bring the Camaro to market and how that will impact its sales. My bigger point though is GM’s general inability to bring a product to market. You state that Ford has nothing in the pipeline, but I have certainly seen more new cars from them and will see more new cars for the next couple of years based on reports I’ve read. GM seems to only be able to provide promises not cars.

  • avatar
    like.a.kite

    Wert: “…didn’t seem to have a difficulty…”

    ICE BURN

    However, there is no case in no universe for Rick Wagoner. Where’s your eight hundred-word rebuttal?

    RF: Notice how I used that hyphen correctly.


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