The remarkable thing about the news today that Rick Wagoner is resigning as the CEO of General Motors is that—at least, reportedly—Wagoner was asked to step down by the Obama administration.
Incredible. Requests for people to step down are almost exclusively sent in the other direction: to public office holders. And although I've seen the government dismantle a lot of companies wholesale lately, I can't recall any other circumstances where an organization's leadership was picked apart at the request of the white house.
The concensious seems to be that the US needs EU cars, which is why the govt is pressuring Chrsyler to merge with Fiat, and Ford is going to produce the Fiesta and a few other UK cars in the US in 2011. Knowing that it costs $3k to bring a GTO from Australia, and it costs $2k/car made in the US to pay for retired union worker benefits, I wonder if it would be beneficial to start importing Vauxhalls rebadged as Chevys until they could start producing them in MoTown.
I was impressed by the new guy (Fritz) today.
Justin-
Well, US manufacturers have a difficult time being competitive with US labor because of healthcare costs and the history with the union. Foreign manufacturers don't have this problem even on US soil because the labor relationships are structured differently, and US manufacturers don't have this problem with foreign workers.
So moving to EU-produced cars may be a solution, but we should be honest about what that is: it's moving jobs from US workers to foreign workers. That's politically dangerous even if it's industrially prudent.
I also think the fact that FIAT is EU-based is merely coincidence. What isn't coincidence is that Sergio Marchionne ran one of the best modern examples of change management in the automobile industry, and the company also has decent financials. I think there's a pretty widespread understanding that both of these will be vital to the health of Chrysler.
Raven-
I haven't heard or seen Fritz's work, but his appointment was a pretty saavy one. I see a lot of their changes here as cover-your-ass posturing by the Obama administration: losing Wagoner lets them say they did something about the problem; appointing someone from the inside (Henderson) lets them say they didn't do anything too radical. They're in reasonably good political shape no matter the outcome.
I expect the changes made to actually secure the company will not be negotiated directly with the CEO, particularly now that he's not been in the job too long.
--D
Wagnor also had the job of cairman of the board - on Wagnor's exit another guy took that role. This could help the CEO focus more on the CEO roles (what ever those are).
The role of the CEO is to ... you know, executize.
I dont think the US shopper is as aware about where their products are made. The fact that the Toyota Camry is the only car represented in NASCAR which is actually produced in the US (others are Canada and Mexico) seems to be a good indication of that. I wouldnt advocate that they should move the production to the EU, I would just bring the cars in from overseas until production was possible stateside. So, its more like keeping the US workers employed by utilizing foreign resources. The economy is just as bad over here, so its not like production lines are are too busy to produce some cars for the states.
You're right—but it's not about the products themselves. If you're talking about the political landmines, it's about the change in the number of American jobs. If you're talking about the reasons why this is necessary, it's about corporate culture and bringing in the right people to make the hard calls.