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Former GM Chairman Wagoner Resurfaces

New board posts puts him on automotive periphery.

by on Aug.05, 2010

He's back...sort of. Ousted GM Chairman Rick Wagoner resurfaces.

Former GM chairman G. Richard Wagoner has avoided the spotlight since he was fired by President Barack Obama’s automotive task force, but now appears ready to launch a second career, serving as a director on various corporate and educational boards.

His newest appointment lets Wagoner put at least one foot back into the auto industry.  Aleris International, Inc. says the 57-year-old Wagoner has been elected to its Board of Directors and to the Board of Directors of Aleris Holding Company, its parent.  In turn, Aleris Holding Company is majority owned by Oaktree Capital Management, a private equity firm.

“We are extremely pleased to welcome Rick to the Aleris board,” said Steven J. Demetriou, Aleris chairman and chief executive officer.  “He brings a wealth of expertise that will be invaluable to Aleris as we continue to strengthen our company and grow.”

A former college basketball star, the former GM chairman also serves his alma mater as vice chair of the Board of Trustees of Duke University and a member of the Board of Dean’s Advisors of the Harvard Business School, Duke’s Fuqua School of Business Advisory Board and the Detroit Country Day School Board.

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And despite his occasional tiffs with the media, Qagoner also was recently elected director of The troubled Washington Post Company and sits on the Mayor of Shanghai’s International Business Leaders Advisory Council.

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GM Bankruptcy, Once Unthinkable, Now Seems Absolutely Unavoidable

Over the past four years, GM has tried all kinds of strategies to keep the wolf from the door. It has now been blown away.

by on May.07, 2009

Ray Young and Company Employees Close New York Stock Exchange

"Once you start losing revenues, you get into a vicious cycle that you can't get out of very easily."

General Motor lost money again in the first quarter of 2009 , and is just as certain to lose money again in the second quarter, given the company’s deep cuts in production now in the schedule.

Bankruptcy, once unthinkable, seems unavoidable in the wake of the $6 billion first-quarter loss — and a $10 billion cash burn — which only exacerbated the company’s already precarious financial situation. Worse, the company revenues plunged by nearly 50% in the first 90 days of this year, suggesting that the Obama Administration’s Auto Task Force really did have cause for recommending the dismissal of former GM chairman Rick Wagoner.

“Once you start losing revenues, you get into a vicious cycle that you can’t get out of very easily,” observed Ray Young, the company’s youthful chief financial officer who was plucked off the finance staff last summer to help guide GM through the grave and grave-digging crisis it is now facing.

Young also outlined another of GM’s serious problems. The drumbeat of bad news is drowning the company. “A lot of impact is already in the marketplace. We have anecdotal evidence that that spills over into places like Brazil. We can’t quantify the bankruptcy concerns, but there is an impact. If we have to go through a court process, it’s going to have to be quick,” he said.

Subscribe to TheDetroitBureau.comThe clear implication was that a long stay in bankruptcy court could very destructive to the company’s health. Perhaps any stay is fatal.  GM needs to get customers to focus on the company’s products, not the bad news, Young said during a conference call with reporters and analysts. How GM can do that, given the lack of significant new products and the plentiful supply of bad news is not at all clear, to put it kindly.    (more…)

GM Confirms Wagoner Resignation

Fritz Henderson takes over as Chairman; more management changes are coming.

by on Mar.30, 2009

The new General Motors Chairman, Fritz Henderson, talks to reporters whn he was the head of Europe.

The new General Motors Chairman, Fritz Henderson (right center), at the Geneva show.

Early this morning a scrambling public relations operation at General Motors confirmed that Rick Wagoner is stepping down as chairman and CEO, effective immediately. Wagoner, 56, was named president and CEO in 2000, and assumed the role of chairman in 2003.

Fritz Henderson, GM president and chief operating officer, will serve as CEO. Henderson, 50, was named to his current position in 2008.  He was previously vice chairman and chief financial officer.

Kent Kresa, chairman emeritus, Northrop Grumman Corporation, has been named interim non-executive chairman of the board of directors. Kresa became a GM director in 2003. 

“The Board has recognized for some time that the Company’s restructuring will likely cause a significant change in the stockholders of the Company and create the need for new directors with additional skills and experience,” Kresa said. 

“The Board intends to work to nominate a slate of directors for the next annual meeting that will include a majority of new directors taking into account the addition of new directors, retirement, and decisions by individual directors not to stand for re-election, although the specific individuals who will be nominated or choose not to run or leave the board are not yet known,” Kresa concluded. 

Wagoner said, “On Friday I was in Washington for a meeting with administration officials.  In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have. Fritz Henderson is an excellent choice to be the next CEO of GM. Having worked closely with Fritz for many years, I know that he is the ideal person to lead the company through the completion of our restructuring efforts. His knowledge of the global industry and the company are exceptional, and he has the intellect, energy, and support among GM’ers worldwide to succeed.  I wish him well, and I stand ready to support him, and interim Non-Executive Chairman Kent Kresa, in every way possible.  

“I also want to extend my sincerest thanks to everyone who supported GM and me during my time as CEO.  I deeply appreciate the excellent counsel and commitment of the GM Board and the strong support of our many partners including our terrific dealers, suppliers, and community leaders. I am grateful as well to the union leaders with whom I have had the chance to work closely to implement numerous tough but necessary restructuring agreements.  

“Most important of all I want to express my deepest appreciation to the extraordinary team of GM employees around the world.  You have been a tremendous source of inspiration and pride to me, and I will be forever grateful for the courage and commitment you have shown as we have confronted the unprecedented challenges of the past few years.  GM is a great company with a storied history.  Ignore the doubters because I know it is also a company with a great future,” Wagoner concluded. 

The GM statement also said it is awaiting further announcements by the President and the Auto Task Force on Automotive Reconstruction, and will have additional comments at that time.

GM asks U.S., Canadian and European Governments for Billions More in Loans

Saab, Saturn and Hummer brands not in GM’s future.

by on Feb.17, 2009

Rick Wagoner: Seeking bigger bailout

Rick Wagoner: Seeking bigger bailout

General Motors’ updated plan to the United States Department of Treasury not only asks for another $4.5 billion above the $18 billion it requested in December, but it expects billions more from Canadian and European governments. It is assuming that U.S. banks will renew its $4.5 billion line of credit in 2011, otherwise more funding will be needed. The company also wants another $7.5 billion in loans that year if sales don’t improve.

Partial repayment of U.S. funding by GM is now due to begin in 2012, a year later than previously, when it says it will achieve competitive labor costs with transplants, but GM admits that the current plan does not achieve them. GM also says that it has not resolved bondholder debt conversion to equity or how to fund healthcare commitments for its workers. Still, GM promised that U.S. taxpayers would eventually be paid in full and that this is a good investment since it directly and indirectly supports 1.3 million U.S. jobs. Even so, the latest plan would lead to significant job cuts.

“Today’s plan is significantly more aggressive because it has to be,” said Rick Wagoner, Chairman and CEO, “In the 11 weeks since our initial plan was filed with Congress the condition of the U.S. and global economies, as well as the auto industry, has significantly deteriorated.”

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Is GM on Least-Cost Road to Fuel Efficiency?

Dire situation requires balancing short, long-term.

by on Feb.12, 2009

Bye-Bye Bob: Lutz with GM CEO Rick Wagoner

Bye-Bye Bob: Lutz with GM CEO Rick Wagoner

General Motors is in a race for survival, with every day bringing news about the drastic steps it has to take. Rick Wagoner faces the toughest job any corporate leader has ever had to face. Even if he succeeds in saving the company, he’ll still be remembered as the CEO in charge as GM slipped from its 75-plus year perch as the world’s largest automaker.

Federal loans will buy GM some time and next week the company has show Uncle Sam a restructuring plan for how it will get itself back in the black. It has to do so while also revealing how GM intends to meet the higher fuel efficiency requirements that ramp up to a 35 mile per gallon fleet average by 2020. Every penny counts and then some. So if any company has to rethink its product planning with cost efficiency and fuel efficiency both in mind, it’s GM.

Each week, however, seems to paint a bleaker picture, including upcoming new layoffs of 10,000 at GM. That follows on the news that the company’s storied Vice Chairman, Bob Lutz, will soon step down from his role heading up product development as he looks forward to retirement by year end.

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