White House tells GM boss to step down

[Ed Anger]

GOVERNMENT WARRANTY

It is my hope that the steps I am announcing today will go a long way towards answering many of the questions people may have about the future of GM and Chrysler. But just in case there are still nagging doubts, let me say it as plainly as I can -- if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee will be safe.

In fact, it will be safer than it's ever been. Because starting today, the United States government will stand behind your warrantee.

booyah. I'm pleased. I'm going to wrap my Challenger around a light pole now.

[Savonarola]

I'm not sure Lehman, Bear Sterns, Washington Mutual, IndyMac and a couple hundred smaller banks would agree with that.

But GM and Chrysler would.   

[DGuller]

booyah. I'm pleased. I'm going to wrap my Challenger around a light pole now.

What does this have to do with warranty?  Wrapping your car around the pole is what you should do if the warranty becomes worthless.  You'll get your insurance money and wash your hands of the car.  Warranty guarantee is for those who will not wrap their Chrysler cars around the pole, and thus will have to do extensive repairs every couple of months to keep their cars going.

[Ed Anger]

booyah. I'm pleased. I'm going to wrap my Challenger around a light pole now.

What does this have to do with warranty?  Wrapping your car around the pole is what you should do if the warranty becomes worthless.  Warranty guarantee is for those who will not wrap their Chrysler cars around the pole, and thus will have to do extensive repairs every couple of months to keep their cars going.

IT IS A JOKE. Jesus Tapdancing Christ, you people sometimes.

[Grey Fox]

Damn it, my Pontiac isn't insurable by the manufacturer anymore 

[Ed Anger]

Damn it, my Pontiac isn't insurable by the manufacturer anymore 

NO WARRANTY FOR CANADIANS!

[fhdz]

Dealerships, on the other hand, mostly sell only one or two brands

Unless you consider the used car market.

[Admiral Yi]

But GM and Chrysler would.   

If GM thinks it's tougher for them to get bailout money than it was for Washington Mutual they need to rethink their position.

Faelin: That 2 million figure is one put out by GM spin doctors and has been debunked.  It includes Ford workers and 100% of supplier workers, even those selling to the Japs.  IIRC GM, Chrysler and their share of suppliers going under would result in 800K on the streets.

[Vince]

Well Wagoner leaves with a $20 million retirement cushion so I won't shed a tear over him getting canned.

http://abcnews.go.com/Blotter/story?id=7208201

PAYDAY: GM's Rick Wagoner Drives Away with $20M Retirement
Critic Calls Multi-Million Package "Perfect Example" of Frustration with Industry
By MICHELLE LEDER and JUSTIN ROOD
March 30, 2009

Rick Wagoner will leave his post as CEO of bailed-out General Motors with a $20 million retirement package, the company's financial filings show.
General Motors Chief Executive Officer Richard Wagoner Steps Down

Although the Treasury Department has barred GM from paying severance to Wagoner or any other senior executive, Wagoner is eligible to collect millions in retirement benefits from his former employer, according to the documents reviewed by ABC News.

The Obama administration asked for Wagoner to resign Sunday, as part of its restructuring of the auto industry. President Obama said this morning that forcing Wagoner out indicated it was a time for new leadership.

Under Wagoner's leadership, GM lost tens of billions of dollars, took billions in taxpayer-financed aid, and cut tens of thousands of jobs, including announced plans to cut 47,000 employees by the end of 2009.

Upon his departure, Wagoner becomes eligible for both a "Salaried Retirement Plan" and an "Executive Retirement Plan" with General Motors. The combined value of the plans at the end of last year was $20.2 million, according to the company's filings with the SEC, although compensation experts said his age -- 56 -- may make him ineligible for the entire amount.

"Most of that will be paid out as an annuity over five years, the remainder is a small lifetime annuity," GM spokeswoman Julie M. Gibson said in an email earlier today. But in a subsequent "clarification" email after this story published, Gibson said that the terms of Wagoner's final compensation were not yet hammered out. "Specifics on any compensation entitled to, or actually paid to Mr. Wagoner are still being reviewed," she wrote.

"I think it's another perfect example of why there's so much frustration among working people," said Tiffany Ten Eyck of Labor Notes, a Detroit-based independent publication covering unions. "I wouldn't mind retiring out of an industry in crisis with a $20 million package."

GM has received billions in loans from the U.S. Treasury Department, and recently asked for billions more. Under its agreement with Treasury, it cannot pay severance fees to senior executives. That ban does not appear to apply to retirement benefits, however.

Wagoner began his career at GM in 1977, working as an analyst for its New York treasurer's office. Wagoner was promoted to several positions within the company, including managerial roles in Europe and South America, before being named CEO in 2000.

Wagoner received compensation topping $63 million during his tenure as a GM executive from 1992 through 2008, according to an analysis of company data.

Last November, ABC News cameras spotted Wagoner in Washington, D.C. arriving on GM's $36 million luxury aircraft. He had come to the nation's capital to tell members of Congress that the company was burning through cash, and needed over $10 billion in U.S. taxpayer funds to stay afloat.

In a followup visit to Washington in December, Wagoner arrived in a Chevy Malibu hybrid. GM announced plans to sell its corporate luxury jet fleet that same month.

[Neil]

I would imagine Wagoner will clean up on a lawsuit or two as well.

[Admiral Yi]

Well Wagoner leaves with a $20 million retirement cushion so I won't shed a tear over him getting canned.

I doubt there is anyone here shedding a tear over Wagoner's situation.  The issue with this story is what exactly canning him is supposed to accomplish.  "New leadership" is not a plan or a policy, it's a slogan.

[Legbiter]

Well, I guess that solves everything.

[Zanza]

The auto companies' troubles are essentially "business as usual" when it comes to state aid - they got into the trouble not because of the international financial markets' upheaval, but because they simply suck at what they do and their products did not sell during the time of the boom either.

To be fair, virtually the entire auto industry is in deep trouble right now. I work in the auto industry and my company posted record profits until summer 2008, but afterwards it went downhill so fast that there is no precedence. The business just crumbled. And it is the same almost in the entire industry. So while GM and Chrysler do have very serious structural problems those problems are excerbated by the economical crisis.

[Zanza]

Of course they aren't his fault.  The White House just needs a scapegoat in this case.

If you can't blame the CEO for years of mismanagement and producing an $80 bn loss over the last two years, who can you blame?

[Admiral Yi]

If you can't blame the CEO for years of mismanagement and producing an $80 bn loss over the last two years, who can you blame?

If quote unquote mismanagement were the sole or primary reason for the loss then he would deserve to be sacked.  But it seems in this case mismanagement is being used as a synonym for bad outcome.

For example I caught a soundbyte on the news which made it sound like part of the White House bill of particulars against Wagoner was that he didn't "negotiate strenuously enough with labor unions and GM creditors."  Does that seem fair to you?  If the unions and lenders don't give up enough to restore GM to profitability is that Wagoner's fault?