A slightly different take on GM's discredited CEO
Photo credit: BLOOMBERG
Editor's note: Rick Wagoner was forced out as General Motors CEO five years ago this week during the auto industry's 2008-09 crisis. He was asked to resign in a now-famous meeting with Steven Rattner, the New York financier who headed President Obama's auto task force, on Friday, March 27, 2009, in Washington. Word leaked out on Sunday, and the firing was announced on Monday. Richard Johnson, Automotive News' editor for print, reflects on Wagoner's place in history.
Having known a lot of CEOs long before they became CEOs, I don't recall one whose personality changed as little as Rick Wagoner's. He started out as a nice guy and pretty much remained one as far, as I could tell, even after scaling the heights of power.
So the view -- especially from the government task force overseeing the 2009 restructuring -- that Wagoner was a living portrait of General Motors arrogance struck me as odd.
Richard Johnson, editor of Automotive News -- print, was a reporter in Frankfurt, Germany, from 1986 to 1991.
He always communicated in GM management-speak, and to anyone outside the corporation that could sound a lot like arrogance. But I always thought of Wagoner as the least arrogant car company CEO I knew.
I met him in 1989 when he was the little-known finance head of GM Europe, working out of a small office in Zurich. I often came down from Frankfurt to interview the GM Europe team. Wagoner was overshadowed in those days by GM Europe President Bob Eaton, GM Europe planning boss John Smith and Lou Hughes, whom Wagoner replaced in the finance post after Hughes went to Russelsheim to run Opel.
Everyone knew the tall guy was a formidable talent. In Zurich they talked about how dazzling Wagoner was in meetings, commanding fact and detail like nobody's business. But he also had a sense of humor, often self-deprecating, which was a rarity in GM executive ranks in those days.
Of course, whether or not Rick Wagoner was arrogant is way, way beside the point.
For nearly 17 years he was either in command and control at General Motors or else part of a tiny klatch of executives running the company. Not since Alfred P. Sloan had one executive held so much power for so long at GM.
So what's the verdict on Wagoner five years after his departure?
Well, GM lost market share and many billions of dollars during his CEO years and eventually had to take government money. Wagoner won't exactly challenge Sloan's place in the pantheon of GM chief executives.
Was he unlucky in the end?
All is fair in the world of high-level corporate intrigue, which Wagoner probably understood as well as anyone. He was a key beneficiary of the 1992 GM revolt that ousted CEO Bob Stempel, President Lloyd Reuss and several other senior executives.
And while the financial crisis induced by the housing collapse waylaid Wagoner, he also benefited from other seismic shifts in the global economy. The horse race between Hughes and Wagoner to succeed Jack Smith in the 1990s tilted in Rick's favor because Hughes was running GM's international operations when the world outside of North America imploded.
People like to compare Wagoner with Alan Mulally, who mortgaged enough of Ford in 2006 to allow the company to forego a bailout in 2008. You could still do that in 2006. Wagoner may have suffered simply because he had GM on a slightly better glide path and didn't need to take what seemed like such a drastic measure.
From 2000 to 2005, Ford Motor, including its foreign brands, lost more than a million units of sales in the United States, a quarter of the automaker's 2000 volume.
General Motors, including Saab, dropped 460,000 units during the same period, down 9.4 percent. GM, which was in the process of shutting down Oldsmobile at the time, had bright spots. Its largest brand, Chevrolet, gained 46,419 units amid the Japanese onslaught. Cadillac and GMC grew, too.
But 2008 was brutal, starting with oil prices rising to $140 a barrel early in the year. When supplier American Axle went on strike in February, it cut GM's production of trucks by 80 percent. When the strike ended that summer, GM actually had a higher days supply of trucks than when the strike began.
Then there was Lehman Brothers. When GM needed to borrow money in late 2008, no one was lending. The U.S. Treasury provided debtor-in-possession funding north of $30 billion. GM probably couldn't have raised $1 billion during those dark days.
Here's what is still debated: Did the government's auto task force restructure GM in a few months in 2009, or did Rick Wagoner and his team do it over the previous several years, positioning the company so that the Section 363 bankruptcy process could succeed?
It hardly matters, of course. And it surely would not be the first time one set of managers got credit for the difficult spadework done by its discredited predecessors.
You can reach Richard Johnson at email@example.com.