Sunday, March 29, 2009

Is GM's Wagoner departure window-dressing?

As I was checking my feeds, I noticed this item in the Inquisitr:

On the eve of President Obama’s unveiling of his plan to help save the floundering U.S. automobile industry the head of GM, Rick Wagoner, has been asked to step down from his position by the White House. Apparently Wagoner will be leaving immediately with no word of his replacement as of yet.

According to MSNBC, this news was leaked by the White House; I do not know if GM has confirmed it or not.

The author of the Inquisitr post, Steven Hodson, went on to share his thoughts:

While one might question the While House making demands like this I’m glad that they are. The automotive industry can’t be expected to live off of the people’s money and still retain the same people who have been responsible for its current situation.

Hodson has a point. If the government is the de facto owner of General Motors, or AIG, or whoever, then the government certainly has the right to put its own people in place, just like any Board of Directors has the power to remove company officials as it sees fit.

Now there is an issue if the government ends up removing key employees and thus scutting the business operations, but I don't know if Wagoner would be considered a key employee in the same way that the AIG retention beneficiaries are. It's probably easier to replace a CEO than it is to replace a trained financial professional.

But despite my strong views on the way the government is mismanaging AIG into the ground, I'm not exactly ready to condemn the Wagoner move yet.

But I do want to see why Obama thought a change was needed, and I want to see who will be brought in to replace Wagoner. If this is just a show move so that it looks like the owner is doing something, then it's just as useless as when Roman Abramovich sacks one Chelsea manager after another. But if the new candidate has some skills and beliefs that Wagoner doesn't have, then this could be a plus.
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