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Economy
GM boss to be removed
2009-03-30
The chief executive of US car giant General Motors (GM) is to resign under pressure from the White House, Obama administration officials have said.

Rick Wagoner's removal comes hours before Barack Obama, the US president, is to unveil a second bailout for GM and its smaller rival Chrysler. Wagoner, who has helmed the largest US carmaker for eight years, had said last week that he had no plans to quit, but was asked by the White House to go, said US media citing administration officials.

The GM chief executive and chairman came under fire for his leadership of ailing company late last year when US politicians debated a bailout for the carmaker.
And when the next government bailout doesn't work another head will roll ...
Posted by:Fred

#29  @tw

Couldn't answer your tax thing yesterday.
Any tax claims in Germany lapse 10 years after being due.

Lets say if you made money in 1994, you had to file by 1995. Taxes were due in that year. Now count ten years from December 1995. December 31st 2005 was the last chance for the German tax office to claim anything, IF you filed a tax return in 1995. If you filed at a later date, the clock starts ticking later.

But even if you didn't file at all, claims would have expired by now.

So if Germany hasn't told you by now that it wants something from you, it's over.

In return, you can't claim anything from them either.

So close that chapter.
Posted by: European Conservative   2009-03-30 21:12  

#28  Thank you for the explanation, Nimble Spemble. Mr. Obama said he alone knew how to fix our little financial bobble, so I do not begrudge him his success, when it comes... with all that voting more than "present" entails. As for Mr. Wagoner, I now know longer feel sorry for him. Thank you for that.
Posted by: trailing wife    2009-03-30 19:30  

#27  Bambi did the right thing.

Wagoner would not declare bankruptcy. He said so repeatedly and in fact, I do not believe GM could have had a Chapter 11 BK because it would have been unable to get debtor in possession financing. Sot the BK would move to Chapter 7 and we'd be in much, much worse shape than we're in now, much like the AIG rescue.

So Wagoner got his chance to try to save the company and failed to do so.

Now he's out and the Feds have said they will assume the warranty liability from GM. In 60 days, GM will file with Uncle Sam providing the DIP financing. The interesting thing to watch is whether Bambi will let a BK judge make the hard decisions or whether he will try to smooth things over for the UAW with some sort of ad hoc administrative procedure.

I suspect the later. And that it will drag on for a long time and ultimately cost him the support of organized labor. At the same time, the far left will turn on him for the quagmire in Pashtunistan. He should start reading about LBJ. Often.

Still it was the right thing. As though he had a choice. That's why whoever won the last election was the loser.
Posted by: Nimble Spemble   2009-03-30 19:02  

#26  Even if this move winds up being a runaway success, and GM is the most profitable company in the world next year for no other reason than Bammo taking swift and decisive action -- I STILL have a huge problem with this. Putin, on the other hand, is nodding approvingly.
Posted by: Iblis   2009-03-30 18:50  

#25  Bankruptcy Leads Possible Plans for GM, Chrysler
GM looks increasingly like it will be forced into filing for bankruptcy protection, sometime in mid-to-late May, in a plan where the automaker breaks into two companies, the surviving entity a "new GM" that maintains key brands such as Chevy and Cadillac and some international units, say several people familiar with the situation.

Stakes in this new GM could be given to creditors and UAW members. It is also possible the new company could be sold whole or in parts to investors.

Under this plan, the "good" GM would not be expected to hold the tens of billions of dollars in retiree and health care obligations that hurt the auto maker in recent decades. Instead, those obligations would be transferred to an "old GM," made up of less-desirable brands like Hummer and Saturn, and underperforming plants and other assets. This part of GM would likely sit in bankruptcy much longer while a buyer is sought for the parts or it is wound down. Proceeds from the sale of old GM would go to pay claims to various creditors, including GM retirees.

In other words, taxpayers will continue to subsidize the "bad" GM.
Posted by: ed   2009-03-30 18:41  

#24  The news cycle is already turning to focus on Wagoner golden parachute -- forget about the fact that one of our biggest businesses has been nationalized and your Crapolet is now warranteed under the full faith and credit of the US
Posted by: regular joe   2009-03-30 17:33  

#23  Before the inaugural, rumor was Obama wanted a 'prepackaged' bankruptcy for GM. Basically, a smooth transition into a reorganization status in which they can renegotiate contracts with the UAW, suppliers and dealers while new owners for the assets are already identified. This is probably the most realistic approach, in my humble opinion. However, the unions won't like it because bankrupt corporations have a lot more power in union negotiations.

So, my point was, maybe Obama's making a big deal out of Wagoner while essentially undermining the UAW preference to avoid bankruptcy. Not sure though. Not looking to argue either. It's a sad mess however it goes down but a government run auto company is all the sadder.
Posted by: JAB   2009-03-30 17:30  

#22  Wagoner probably has blue eyes and we now know that they are the ones to blame for everything. So someone with with brown eyes, say Je$$ie Jack$on or Rev Wright should fit the bill.. right!
Posted by: tipper   2009-03-30 16:49  

#21  Drudge links to a Wall Street Journal article suggesting that President Obama's team would like to see GM and Chrysler file for bankruptcy in May, unless the UAW agrees to a new labour contract. Very interesting details at the link. Note that in addition to forcing out Mr. Wagoner, more than half of the board members will be replaced as well.
Posted by: trailing wife    2009-03-30 16:47  

#20  So, if you want your president to succeed
you'll dump your volvo, saab, lexus, prius,
and every other non Deetroit iron for an
Impala.
Posted by: Andy Spasing6529   2009-03-30 16:08  

#19  GW = GM

lexdisic.....
Posted by: Eohippus Thravimp7965   2009-03-30 15:37  

#18  "President Fires GW CEO" is as dissonant as "Pope Fires Missile"

was a Lileks quote
Posted by: Frank G   2009-03-30 15:36  

#17  There was a quote on some site linked to by Instapundit this am.... something like....

"President Fires GW CEO" is as dissonant as "Pope Fires Missle".

First they came for the CEO's but I didn't care because I wasn't a CEO.

The question isn't whether Wagoner deserved it; it's whether Obama had any business making that call.
Posted by: Herman Chunter2725   2009-03-30 15:35  

#16  Why wasn't Gittelfinger (head of UAW) fired also?
Posted by: no mo uro   2009-03-30 15:07  

#15  If this is the way Obama stays onside with the unions while getting GM to what is essentially a prepackaged bankruptcy, then it's the most competent and free market oriented thing he's ever done.

I don't (necessarily) wish to argue, but only to understand.

Could you explain that, please, JAB?
Posted by: Bobby   2009-03-30 12:53  

#14  New GM model launched!
The GM Trabant is to début soon.

I'm holding out for a Lada.
Posted by: charger   2009-03-30 12:33  

#13  If this is the way Obama stays onside with the unions while getting GM to what is essentially a prepackaged bankruptcy, then it's the most competent and free market oriented thing he's ever done. Not sure and not saying much, but Wagoner did nothing to prepare his company for a downturn. His lasting 8 yrs was in part due to the moral hazard that comes with being too big to fail.
Posted by: JAB   2009-03-30 12:15  

#12  Doesn't matter for GM if the CEO is gone. The same inept board of directors that let him stay and approve the inept business plans is still there.

A bankruptcy would have gotten rid of both.
Posted by: DarthVader   2009-03-30 11:39  

#11  Flying to D.C. with your own jet to beg for money didn't go down that well
Posted by: European Conservative   2009-03-30 11:31  

#10  and now Obama owns GM's future. Whatever happens better (hah!) or worse, it's his. No more voting "present". Sucks to be responsible, huh, Barry? Dow futures are down 200 right now
Posted by: Frank G   2009-03-30 09:27  

#9  While I won't miss Wagoner (the value of GM's stock is down 95% under him. I'm surprised he lasted 8 years.), I don't like Uncle Sam's involvement. Steve is right, Ch. 11 would have been the right answer, but that is of the table now.
Posted by: Spot   2009-03-30 08:16  

#8  New GM model launched!
The GM Trabant is to début soon.
Posted by: Bright Pebbles the flatulent   2009-03-30 08:15  

#7  Shaliessa, give me the Harvard University alumni job placement office please. I think there's a opening at GM we can fill tomorrow.
Posted by: Barry Soetoro   2009-03-30 08:05  

#6  A step closer to a command economy.
Posted by: SR-71   2009-03-30 07:29  

#5  The President of the United States just fired the chairman of General Motors.

That's a hell of a trophy to lay at the feet of the G20.
Posted by: Seafarious   2009-03-30 01:35  

#4  any competent bankruptcy trustee would restructure the labor contracts and the work rules. That would finish the UAW...

Which is pretty much what needs to happen. GM's fundamental problem is not that they can't make cars, it is they can't make cars profitably. At least not with the UAW dragging them down.
Posted by: SteveS   2009-03-30 01:32  

#3  Obama hasn't done anything for fuel efficiency standards, and even if they were raised, it isn't clear that the auto industry could do anything to meet them.

Bambi can't let GM go Chapter 11: any competent bankruptcy trustee would restructure the labor contracts and the work rules. That would finish the UAW and, more importantly, end the multi-million dollar contributions to the Dhimmicrats.
Posted by: Steve White   2009-03-30 01:11  

#2  With one hand, the Obama administration raises fuel efficiency standards for the auto industry, making them strain even harder while they are already on life support -- and with the other hand they pull the plug on the industry. Nice going, bozos!
Posted by: Grumenk Philalzabod0723   2009-03-30 00:54  

#1  So he made the curious decision that government managed and subsidized labor contracts and capital injections are more valuable/profitable than taking GM through Chapter 11?

And the stockholders and more importantly bondholders have gone along with this analysis?

I'd be insulted if I were a bankruptcy judge. Of course they've already been thoroughly disregarded and insulted and ignored by the current administration (and terminal actions of the last) who rather pointedly NEVER even raise the possibility of such filings.

I'll grant that the FDIC/Treasury/Fed. are contemplated differently form a legal aspect than all other business concerns, but this administration simply doesn't want to recognize ANY business concerns.

It's all power and money.
Posted by: Halliburton - Mysterious Conspiracy Division   2009-03-30 00:43  

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