General Motors Death Watch 45: In His Hands

According to Rabid Rick Wagoner, terminating his employment would only slow down GM's recovery: 'When you bring in a lot of new people, you bring in a lot of change and people just sort of sit there and try to figure out what to do.' As opposed to what? Keeping the same old people and making no changes so that people can sort of sit there and watch the world's largest automaker go bankrupt? Rick's comment appeared in AutoWeek immediately after Standard & Poor's rating service downgraded GM's credit rating to "B", some five steps below investment grade, with a negative outlook. Clearly, Wagoner is to leadership what penguins are to civil engineering.

Like any clueless corporate alpha, Rabid Rick wants us to believe that everything's under control. Indeed, he's instructed PR flack Gina Proia to tell the world that GM has "an aggressive and well thought-out strategy to turn around our North American business." Apparently, this comprehensive plan comes complete with quantifiable goals, implementation dates and, well, everything Rick's mob needs to save GM from a Valentine's Day Massacre. Only AutoWeek reports that Rabid Rick "prefers to keep it private." In fact, GM's would-be savior "declined to predict whether GM's North American automotive operations could break even next year." [NB: "could" not "would."]

"Other people may or may not have time frames, but it's not what I'm worried about,' Wagoner told AutoWeek. 'I'm focused on the fact that we need to fix the business, and that's really what is driving me.' Why do I keep seeing images of Rabid Rick in a pinafore, wandering through a vast wonderland of unsold GM product? In what alternative universe is it OK for the head of the world's largest automaker to stare financial oblivion in the face and say "trust me, don't rush me"? Lewis Carroll himself would be proud of Wagoner's strange rhetoric, which blithely suggests that timetables are antithetical to corporate repair.

Anyway, it's not as if GM's rivals are about to steal Rabid Rick's master plan, so that they can counter The General's new product launches and/or drive their company into the ground. UNLESS… Rabid Rick's briefcase actually contains the codes for the nuclear option. Sure! Rick's mob have a secret plan to leave Delphi twisting in the wind and let the United Auto Workers (UAW) strike. GM would then fall into bankruptcy accidentally on purpose, so it could jettison its UAW contract, close factories, cut brand deadwood, realign the product portfolio and…

Yeah right. Back here in the real world, Rabid Rick is fighting for his company's survival by strolling down the path of least resistance. Rather than make a stand against the UAW, Rabid Rick's ready to pay the blood money needed to forestall a Delphi strike– even though "we certainly didn't budget for stuff like that." Rather than kill-off Buick, Saab and Saturn, Rick's content to let their salesmen hit the forecourt like members of Robert Scott's ill-fated Antarctica expedition (i.e. "I may be some time".) Rather than slash GM's model range across the board and concentrate on building the world's best cars, Rick's happy to manufacture dozens of mediocre examples of the sorts of vehicles people may want to buy by the time GM finally gets around to building them.

Rabid Rick's timidity makes me wonder if he's even trying. When asked about the SUV slump in Automotive News, Wagoner claimed the company was powerless to respond. 'We just couldn't react,' he admitted. 'It really highlighted that the underpinnings of our business are too fragile… if we lose mix or volume, we cannot get costs down as fast as (sales) volume comes down.' Does Rabid Rick really think that GM's ability to turn tail and run is the key to its success? Wouldn't building hybrid SUV's, killer crossovers or awesome sedans have been the better option?

As the Italians say, the fish stinks from the head down. If GM couldn't detect and react to a change in market conditions quickly enough to avoid losing its proverbial shirt, that's because its CEO couldn't perform with sufficient insight, speed or decisiveness. If the UAW is tying Wagoner's hands, preventing him from doing what needs to be done, it's his job to sever those bonds, once and for all. It's one thing to admit you made a mistake, it's another to have the courage and wisdom to make sure it never happens again. Isn't that why Wagoner gets paid so much money?

News reports recently revealed that The General's CEO has negotiated a deal with GM's Board of Bystanders that makes his multi-million dollar pension fund bankruptcy-proof. Not only is that a boneheaded move relative to GM's negotiations with the UAW (which include pension liabilities and contributions), but it betrays Rabid Rick's stunning lack of confidence in his own talents. It's an opinion that's increasingly easy to share.