General Motors Death Watch 65: When Billy Met Ricky

Robert Farago
by Robert Farago
general motors death watch 65 when billy met ricky

I wonder what Billy Durant would have made of Rick Wagoner. GM's founder was a man of great honesty, intelligence and drive. He was also a high school drop out who started the company with a $1000 loan– and ended-up penniless. Twice. Perhaps that's why historians tend to credit General Motors' epic growth to the man appointed president in 1923; about whom an observer wrote, 'The manufacture of correct assessments, not physical products, is what most gratified Alfred Sloan.' Billy was the "car guy." Alfred was the "bean counter." The history of GM is the history of the struggle between these two opposing forces: passion and, um, accounting. Rick Wagoner is, of course, a Harvard MBA.

I suppose Durant would have liked Wagoner well enough, at least at first. Durant's legendary charm was based on a simple but effective strategy: "Assume that the man you are talking to knows more than you. Do not talk too much. Give the customer time to think. In other words, let the customer sell himself." Rabid Rick is pretty good at selling himself these days. With a new PR guy pushing the buttons, Wagoner's making the rounds, defending his chairmanship on CBS' 60 Minutes and Face the Nation, and in the pages of The Wall Street Journal and other carefully-selected publications. So if Rick and Billy were schmoozing about GM, Wagoner would have done the talking.

What would Billy have thought if Rick repeated his recent kvetch to Newsweek? 'It's not so easy to do stuff, particularly if you can't do it yourself, if you've got to do it in cooperation or in conflict with unions, if you do it with Delphi, if you need partners to consider a partial sale of GMAC. What has been done in the last six months borders on unprecedented accomplishments and advances. This stuff didn't happen because somebody decided on Jan. 15, why don't we do stuff? This stuff happens because we're working on it, we're ready to do it, we're talking to people, and then when we have it ready, we announce it.'

Durant would have been alarmed at Wagoner's use of the word "stuff." Billy may have been the yin to Alfred's yang, but he was every inch the detail man. He knew every nut and bolt of every vehicle, every nuance of the production process. Durant would not have been pleased with a GM CEO who spoke with such thinly-veiled buck-passing imprecision. As a risk-taking deal maker extraordinaire, Durant would've also wondered why Wagoner hadn't already united GM's "partners," or taken the bold action necessary to avoid GM's current morass. Equally important, as a man who lost his company to conservative-minded "insiders" (twice), Durant would've also had problems with Wagoner's "company men know best" hubris. To wit:

"These are sophisticated problems with historical tails that run back 80, 90 years. The chance of someone coming in and not understanding our business, making the right calls and doing them in cooperation with key constituencies like dealers and unions, is absolutely microscopic. That would be the biggest risk I've ever heard of." Risk? What does a man who's never worked a day outside Generous Motors (its former CFO no less) know about risk– except how to avoid it at all costs? Even so, Durant would have kept his trap shut. And then, at some point, Billy would want to go for a ride.

Durant believed that great products make great companies, and vice versa. GM began when Durant was so impressed by a horse-drawn buggy's innovative suspension that he bought its manufacturer: the Coldwater Cart Company. One wonders which vehicle Wagoner would choose for Billy's test drive. A Corvette would certainly swell Durant's heart with pride. Anything else and… there would be questions. Why doesn't this Tahoe have a hybrid engine? What makes a Pontiac G6 better than a Toyota Corolla or Honda Civic? Why isn't the Cadillac STS as good as/as expensive as a Mercedes S-Class?

Durant would have listened to Wagoner's responses thoughtfully and concluded that GM's CEO had an answer for every objection, every fault, every danger; and the answer was always the same: we're working on it. Things are getting better. We'll sort out the jobs bank, the quality gap, the Delphi situation, the GMAC finance deal, our car sales, this car, all of it, everything, later, soon, sooner or later. In that sense, Durant might have seen something of himself in Wagoner. Like his father before him, Billy squandered his fortunes on stock market speculation. Gamblers understand denial. They know that some men will always believe– no matter what– that their salvation, their resurrection, is only a deal away.

So, if William C. Durant were Chairman of GM today, would he fire Rick Wagoner? Truth is, Billy never would have appointed Wagoner CEO in the first place.

[For more info., please read 'Billy, Alfred, and General Motors' by William Pelfrey.]

Join the conversation
  • Gray Not bad, including the price. A little worn, but it's 34 years old and looks complete and original. The 318 is one of their best workhorse engines, and is easily modifiable to 400 hp. If I needed something to drive, I'd consider it. I think those are stock wheels, btw. Fifteen inchers look tiny these days.
  • MRF 95 T-Bird One of the reasons why Mopar dropped the removal top version was that the marketing department found that few owners, maybe 20% took the trouble to unbolt and remove the heavy fiberglass roof.
  • Zerofoo The UAW understands that this is their last stand. Their future consists of largely robot assembled EVs that contain far fewer parts. Factories moving to southern "right to work" states and factories moving to the southern-most state of Mexico.I don't think lights-out auto factories are on the horizon, but UAW demands might move those automated manufacturing process timelines up.McDonalds opened a fully automated restaurant in Texas in 2022 in response to a $15/hour minimum wage demand. I'm fairly certain that at $130/hr - fully robotic car factories start to make sense.
  • Redapple2 Cherry 20 yr old Defenders are $100,000 +. Til now.
  • Analoggrotto So UAW is singling out Ford, treating them slightly better in order to motivate the entire effort. Mildly Machiavellian but this will cost them dearly in the future. The type of ill will and betrayal the Detroit-3 must be feeling right now will be the utter demise of UAW. I just hope that this tribulation is not affecting Mary Barra's total hotness.