Should the head of GM — Rick Wagoner — be asked to step down as a condition of any taxpayer-funded bailout?
It’s hard to see how he keeps his job — if the concept of accountability matters anymore. GM’s problems are many and certainly not all of them are Wagoner’s fault. Several of them trace their origins back decades, to bad decisions that laid the groundwork for today’s difficulties — such as the failure of the company to simplify and consolidate its brand structure as market share dipped from 50 percent to the current 20-ish percent.
Pontiac, Buick, GMC, Chevrolet, and Cadillac are venerable institutions but may no longer be viable as more or less independent, full-line divisions.
But that’s not Wagoner’s doing; it’s something he inherited. Still, he didn’t do much about it. And during his tenure, GM actually expanded its roster of brands (Hummer) and pumped money into perpetually money-losing Saturn (originally conceived as a way to rehab GM’s then-iffy image for quality by “starting fresh” but which today has been rendered irrelevant by GM’s much-improved quality).
It’s certainly unfair to go after Wagoner for “not anticipating” the surge in gas prices that made SUVs overnight pariahs. Toyota didn’t anticipate it, either. Ditto Nissan. Both were working diligently on hulking V-8 SUVs and full-size trucks that were actually bigger and even more wasteful than GM’s (or Ford’s or Chrysler’s). Titan, anyone?
The larger, more substantive criticism that does stick isn’t that GM lacked small fuel-efficient cars. It had those, plenty of them. They just happened to be clunky and cheap-feeling in comparison with the best import equivalents like the Honda Civic and Toyota Corolla. Those two are perennial big-sellers and have been for years, in good gas times and bad. They gave Toyota and Honda not just a fallback if and when the big trucks and SUVs went sour. They also created an enduring buyer base — composed almost entirely of former GM (and Ford/Chrysler) customers.
GM, therefore, was caught with its pants down when the SUV/truck market collapsed.
The Chevy Cobalt (and probably even more so the forthcoming Chevy Cruze) is a very good little car. It just ought to have been here much sooner. The Cobalt didn’t replace the awful, completely obsolete Chevy Cavalier until 2005. That is certainly somebody’s fault.
A new guy might not be able to do any better, of course. But he would begin with a clean slate — and that is no small thing. Rick Wagoner and the other Big Three CEOs are inextricably bound up with the current difficulties. If they do not go, there will be resentments — not unfounded — as well as a growing sense of the disconnect, at the highest levels of our country’s economic life, between actions and accountability. It’s hard (unless you’re a Marxist) to object to high compensation for high achievement. But it’s even harder to countenance rewarding its opposite.
The bottom line: GM is failing. If the guy in charge of the whole operation isn’t responsible for that, to some extent at least, then who is? And if the head guy is allowed to avoid any real repercussions for the disaster that is unfolding, how can we, as a country, look the average assembly line worker in the eye and ask that he accept the loss of his job, or a major cut in his pay and bennies? Keep in mind that to the average line worker, loss of the job means possibly going broke. At the every least, it means having to scramble for a new/equivalent job to keep the mortgage paid up and food on the table.
Retirement, for a guy like Rick, means just that. He goes home to the Grosse Pointe mansion in the gated community. Maybe he “consults,” or just plays golf. But unless he has been extraordinarily profligate, he will still be worth millions and have no financial needs or worries whatsoever.
So even if he is let go, the meaningful consequences are almost entirely aesthetic. For the average line worker, the consequences will hit closer to home.
Is it not at least mildly off-putting?
That this is even a question for debate shows how weird things have gotten in our country. Guys like Wagoner and his counterparts at Ford and GM are paid more in a year than most Americans earn in a lifetime. Note the distinction: Paid vs. earned. Because there is no way, without raping the language, that the compensation awarded to the Big Three’s chieftains can be described as earned income. And that, really, is the bottom line here. GM is failing. Which means Rick has failed. You can probably draw the necessary conclusions.
The question is, can he?
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