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Wagoner "resigns"

This is a discussion on Wagoner "resigns" within the GTO forums, part of the Vehicle Specific category; So my father just told me that Obama basically forced Rick Wagoner to step down as Chairman and CEO of ...

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    Member PatrizioD's Avatar
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    Wagoner "resigns"

    So my father just told me that Obama basically forced Rick Wagoner to step down as Chairman and CEO of General Motors. I just wish he'd told the Whitehouse to shove their recommendation up their collective ass. What is the country coming to when the President can fire the head of a non-government organization? Not to mention that Wagoner undoubtedly has LEAGUES of experience in management over Obama. Any thoughts?

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    Member 6.0LiterImportEater's Avatar
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    President Obama blames the American Auto Industry for falling and crashing.......yet the reason for this is the UAW!!

    Who gave Obama a ton of money for the election....hmmmmmmm....UAW!!

    Cost so much to manufacture a car in the U.S. now that we can't compete with imports. Add that nobody buys American anymore cause they think imports are much better which is untrue in all aspects which makes things so much worse for the big three.

    Need to fix the real problem and not the upper management of GM. Need those greedy union workers to accept "reasonable" pay. Sorry I have no remorse for them. No college or higher education yet make $28.00/hr to drive screws all day!

    I was an automotive engineer for Delphi so I know this! Most of the factory workers made more than me!! Ridiculous!

    We wonder why the big three has outsourced so much?! Have to compete with all the asian companies that have cheap labor. For example Toyota does not pay for any benefits for their employees (except US). Check out how many Japanese Engineers have died from stress and overworked at Toyota. There are plenty of news articles about it haha! Yet so many people buy cars from them cause they are a "better" company. Get real! All these unpatriotic non-capitalist liberal democrats make me sick!!!

    Another sad thing is the big three have to do so much just to get a "loan" but they just GAVE money to Wall Street. I'll tell you one thing and that is if the American Auto Industry falls and collapses you better bet we will no longer be the worlds superpower and shit will be falling FAST!

    We no longer buy "American" products or have the pride of owning anything that was "Built in the USA". Why does our economy suck? Well give everybody "stimilus" money so they can buy foreign crap at Wal-Mart that is owned by China!

    We as a country need to "re"-industrialize and become product driven once again. We buy the majority of the worlds products but no longer make any of our own. Rebuild that infrastructure and we can become strong again!

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    Quote Originally Posted by PatrizioD View Post
    So my father just told me that Obama basically forced Rick Wagoner to step down as Chairman and CEO of General Motors. I just wish he'd told the Whitehouse to shove their recommendation up their collective ass. What is the country coming to when the President can fire the head of a non-government organization? Not to mention that Wagoner undoubtedly has LEAGUES of experience in management over Obama. Any thoughts?
    Bottom line is GM has been in trouble as of recently, and the person who gets the blame is the CEO, because he's responsible for the company.

    I don't think Wagoner was necessarily a bad CEO, but he obviously wasn't good enough to keep the company out of the red.

    And now that the government is investing money in GM, they have the right to make some critical managerial decisions. The first being to assign a new CEO to try and turn things around for the better.

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    Member GTO1_OHIO's Avatar
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    Obama is always going to come off as doing everything for the little guy, in this case the unions. Everything he does is done in a way to solidify the Democratic base. Wagoner was made to be the villan and to make Obama look like the hero but in reality it has no impact on the true issues. Just more of the same Obama fluff.

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    I have issues with the President being able to force such a move. I do however see that if the government is going to be the major investor in the company they should be allowed to put conditions on their investment just as any other investor should be able to put conditions on their investment.
    I think it is terrible to get the government involved in any of the countries private industries, but however if the company could not find private investors to supply capital they have to choose who will give them the best terms. In this case obviously the government is offering the best terms, this again is scary because the government is investing our money when every other profesional investor said the terms of the investor were not good enough for the investment. So really the government should put terms on their investment and Wagner is accepting these terms because he knows he cannot do better, remember he is a major share holder so financially for him he wants the company to do best (not to mention that he is probably getting a hell of a golden parachute for him departure)

    Is it best for the company? That is another question, I do not think Wagner is to blame for the companies problems. Those go back decades and have taken along time to build. The company was in much worse share 8 years ago when Wagner took over in respect to the future retiree pension and healthcare liability. I think Wagner made great strides esspecially in the last 4 years with the unions agreeing to be bought out of the Pension liability. On the otherhand Wagner has been there for 8 years now and has probably made all of the progress he is going to make, the unions will not likely give him any more. For a CEO to stay in the job 8 years is a long time not to slove the principle issue of a company which is the unionized labor costs; I think the task was monumental and no CEO could have fixed it but regardless 8 years is all you get. Most would have gotten less time, his fantasic progress is why he got so much time. I think a new CEO can make more headway at this point than Wagner could.

    I hope that makes sense since I am at work and took 3 confernce calls while writing this, so it is a little choppy in the flow of the thoughts.

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    Quote Originally Posted by 6.0LiterImportEater View Post
    President Obama blames the American
    Another sad thing is the big three have to do so much just to get a "loan" but they just GAVE money to Wall Street. I'll tell you one thing and that is if the American Auto Industry falls and collapses you better bet we will no longer be the worlds superpower and shit will be falling FAST!
    I generally agree with you 6.0 but I have to take exception to the comment that the government just GAVE money to Wall Street. First the banks are really the ones recieving money and are really not Wall Street firms, ok a few major Wall Street firms took TARP funds but most of it was not Wall Street firms. Citigroup is a New York firm but not Wall Street, they have a division that is on Wall Street. Now the money that these firms recieved was also not a gift, that is how the media is portraying it. They have to pay interest rates that 2 years ago would be market rate and if the money is paid back by 2011 the interest rates jump to a fairly hefty rate compared to the historical borrowing costs of these companies. In addition to this the government is recieving warrents that give the government the right to take part of the companies if they return to profitability, on top of the return of money invested and interest. So this is by no means a gift although the media portrays it that way. The companies generally are highly restricted in dividend payouts and for newer recipients of money can not pay a dividend (above $0.01) so the owners of these companies can not make any profit unless the government is paid back with interest and even then the government gets to take part of the company because of the warrents.

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    Member 6.0LiterImportEater's Avatar
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    Quote Originally Posted by VTXrider View Post
    I generally agree with you 6.0 but I have to take exception to the comment that the government just GAVE money to Wall Street. First the banks are really the ones recieving money and are really not Wall Street firms, ok a few major Wall Street firms took TARP funds but most of it was not Wall Street firms. Citigroup is a New York firm but not Wall Street, they have a division that is on Wall Street. Now the money that these firms recieved was also not a gift, that is how the media is portraying it. They have to pay interest rates that 2 years ago would be market rate and if the money is paid back by 2011 the interest rates jump to a fairly hefty rate compared to the historical borrowing costs of these companies. In addition to this the government is recieving warrents that give the government the right to take part of the companies if they return to profitability, on top of the return of money invested and interest. So this is by no means a gift although the media portrays it that way. The companies generally are highly restricted in dividend payouts and for newer recipients of money can not pay a dividend (above $0.01) so the owners of these companies can not make any profit unless the government is paid back with interest and even then the government gets to take part of the company because of the warrents.

    I'm confused cause from what the talk has been is our government really has no clue where most of the money for the banks went. They did not track it and since they did not how are they going to be paid back?

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    Well actually what they are trying to track is how the banks used the money they recieved. The government knows which bancks recieved the money, they now want to know what the banks did with that money. The banks have not supplied this information under the theory that if any other minority investor put money in the bank they would not get access to confidential information. The government does have access through OCC, FDIC, and the Treasury of the books of the banks but not down to specific dollar allocations.

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    In other words they know $XXX went to loans but the the government wants detail as to each dollar that came in how that dollar was allocated. In reality this is stupid as it makes no difference. It is like if you told your wife that the 8th hour of your work day was to pay for mods and then at the end of the month tried to say which dollar in your wallet was from the 8th hour. As long as that percentage went to mods it makes no difference in reality but your wife wants proof that the dollar you are about to spend on the mods was the actual dollar from your 8th hour at work.

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    The other problem is that the congress and media are trying to pass blame for less credit available to the banks. They are an easy target because it is easy to make people picture the evil bank, also congress is trying to avoid their share of the blame. The fact is that bank lending is up since this money went out 15-20% versus 2007, before the major problems. What they are leaving out is that before the credit problems banks represented 25-30% of the credit in this country. That means if banks lend 20% more but were 30% to begin with that is 36% of the lending, banks cannot replace the other 70% no matter how much they expand lending. Many people are confused because the banks originate substancially more that 30% of the loans, however much of this was not their capital, they were simply a service provider to a 3rd party lender, almost like a loan broker if you will.
    So banks can not make up for the exit of most of the lenders in the economy.

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    GM is a failed company.

    They didn't have the cash flow or the credit rating to stay in business. For some odd reason, they asked for and received taxpayer funded bail-out money from the government.

    The world is a crazy place. I Can't understand why GM ever got a piece of the bail-out bonanza, but all the company needed to do (and will do in the near future) is file for Chapter 11 bankruptcy, and restructure.

    Wagoner was a failed CEO. By accepting money from the government, he sealed his fate. And, from the news story I read today, he got to leave with a nice little severance package.

    GM will stay in business, but be allowed to downsize and become competitive again through filing Chapter 11.

    The new CEO has already said he is not accepting a pay cut, and that bankruptcy is still an option for GM. If anyone here has shares of this company, I would suggest selling them now.

    --
    Last edited by 2000LS1Bird; 04-01-2009 at 03:08 PM.

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    Quote Originally Posted by 2000LS1Bird View Post
    For If anyone here has shares of this company, I would suggest selling them now.

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    Thats a joke not even worth selling them they ain't worth shit as it is.

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    I think filing chapter 11 is critical to their survival and it will come at a price for many. When it costs approx $45 per hour for Honda and Toyota to make a vehicle for the assembly personnel, and over $70 for GM, something has to snap and it has. But I will say, however, that Toyota is loosing more money per month than GM is. Bu the difference is they have money in the bank!!

    The challenge here in government is the UAW. The unions are one of the biggest supporters of the democratic party. But for the Big 3 to survive, the UAW has to basically go away, not to mention the pensions, and long term disability!

    GM was very good to their retirees, but can no longer afford to be. GM cannot make money on small cars at all. That is why the major push and promotion of trucks and utilities in the past. This is also one of the reasons so many of the passenger cars they make have the V6 options, compared to the 4 cyl options, because it was more profitable for them.

    GM has too many dealers and 50% of them need to go awayGM is doing a fine job getting rid of the dealers by allowing GMAC, who handles most of the flooring for GM dealers, charge up to 10% penality fees for inventory over 180 days old. There are dealers in the SF bay area that closed their doors due to this would have cost them another $100K a month, and it was cheaper to close, than to continue.

    mike
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    Senior Member qwkgto's Avatar
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    I have a simple fix,close the borders,keep American in America ,if a cmpany needs to send its work else wheres(outside of our country) bann them from selling and or coming back to this country,why do we need other car manufactors? We as a country have more resources more products then any other country on this planet,we dont need em,send all the Mexicans back to Mexico,if they want to be an American,make them join one of our armed forces for 10 years,fight for this country, then and only then will they be allowed thier US citizenship.Besides look at all the jobs we could create keeping it all here,there are plenty of people here that need a job,homeless..etc..WTF we dont need to give money to other countrys, keep the shit here.thats my foreign policy..I could go on ,but no one cares what I think.

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