Page last updated at 12:09 GMT, Monday, 30 March 2009 13:09 UK

End of the road for Rick Wagoner

By Richard Anderson
Business reporter, BBC News

Rick Wagoner
Mr Wagoner has headed GM since 2000

Charismatic, affable and popular he may be, but ousted chairman and chief executive Rick Wagoner failed to realign General Motors (GM) with the changing needs of the modern-day motorist.

GM was a pioneer of large, gas-guzzling Sports Utility Vehicles that, for a while, not only dominated the American automotive landscape, but also proved much more profitable than ordinary cars.

But when drivers started to switch to smaller, more fuel efficient cars, GM and the other US carmakers were slow to follow suit.

Heavy discounting aimed at maintaining the American public as customers led to sharp cuts in profits, and eventually losses, which in turn resulted in thousands of job cuts and a plunge in GM's share price.

Yet, in spite of having let down both workers and investors, Mr Wagoner remains a hero to many in Detroit, Michigan.


"Obviously, the people of Detroit are very upset that Mr Wagoner had to step down from his position after being encouraged by the White House," says Thaddeus McCotter, Republican Congressman from Michigan.

"They're also very upset at the disparate (sic) treatment that Mr Wagoner… received, in comparison to the way the Chief Executive Officers of a financial institution have been treated by the White House."

In the eyes of the US authorities, which have already bailed out GM to the tune of $13.4bn and are being asked to inject a further $16.6bn, his plans to reform GM were simply not radical or aggressive enough, and so he was forced to pay the ultimate price.

The man who worked for the company for 30 years that was, until this year, the world's largest carmaker, could yet go down as the man responsible for its bankruptcy.

Mr Wagoner was born in the east coast state of Virginia 56 years ago and raised by his schoolteacher mother and accountant father.

He went to the local high school, where he developed a love of sports, before graduating with an economics degree from Duke University and then an MBA from Harvard Business School.

In 1977, he joined GM as an office analyst in the treasurer's office.

It was this grounding in finance that would later provide ample ammunition for his critics.

He viewed the business through spreadsheets, they would argue - he did not have an intuitive feel for the car industry and its consumers.


But Mr Wagoner was no accountant obsessed with numbers. His warmth and inclusive management style made him popular with GM employees, while his outgoing and accommodating personality made him a favourite with journalists.

He would often stay behind long after conference speeches to chew the fat with industry hacks.

But his laid-back, easy-going nature did not sit quite so well when the going got tough. He lacked the ruthless streak needed to make the tough decisions required to bring GM back from the brink of bankruptcy, his growing number of opponents argued.

His appearances in front of Congress committees did not give the impression of a man who fully understood the gravity of the situation he and his company were in.

Flying to Washington to meet US lawmakers in a private jet certainly did not help.

And so it proved. In the eyes of the US administration, Mr Wagoner's restructuring plans were not far-reaching enough. The man with 32 years of service with GM was incapable of overseeing a truly radical overhaul that would ensure its survival.

So it passed the buck on to his number two, Fritz Henderson. A finance man who has worked for GM for a quarter of a century.

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