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The exodus of Rick Wagoner from General Motors marks a momentous moment for the automaker's most emphatic critics - many of whom have called for his resignation for years.
But it won't necessarily save the company. Ultimately, GM's survival is more dependent on the ability of the company's negotiators to land meaningful concessions from the UAW and GM bondholders - or the company's ability to navigate government-backed bankruptcy restructuring.
Wagoner's resignation comes as the automaker is facing a life-threatening crisis that's effectively placed the company's future in the hands of the government. President Barack Obama's auto task force is expected to report tomorrow that it would provide billions in loans to GM and Chrysler in exchange for major concessions from the UAW and bondholders within a month.
Wagoner's departure -- apparently orchestrated by Obama's team -- will surely invite a multitude of assumptions and accusations about his motives. Is Wagoner the notorious ship captain who rows away while the ship is sinking?
But let's be honest. Even if GM survives - which seems likely, even if bankruptcy is involved - Wagoner's legacy will be defined by GM's fall from grace. The company - once the world leader in vehicle production - failed to embrace alternative propulsion vehicles as Japanese rivals Toyota and Honda established themselves as the leaders in that critical segment.
Yes, the Chevrolet Volt extended-range electric vehicle, to be released in November 2010, may help revolutionize GM's image. But most of the credit for the Volt's ascension goes to GM Vice Chairman for Global Product Development Bob Lutz, who is also retiring.
Nathan Bomey covers technology, alternative energy, manufacturing and economic development for Michigan Business Review.
(Lutz, for his part, has always defended Wagoner in the face of critics who said Wagoner should be tossed out: "This is the equivalent of the Incan or Mayan days when everybody would go to the top of the volcano and throw a virgin in. It's the feeling that if we make a sacrifice that somehow the gods would be appeased," Lutz told the New York Times last year.)
Few consumers or industry experts will shed tears at the departure of Wagoner, who has vehemently resisted the prospect of bankruptcy as an option for saving GM, even as experts have said it's the best way to go. In fact, many people will celebrate.
But let's hope the parties fizzle quickly. We don't have the luxury of wasting time on celebrating Wagoner's fall from power. The auto companies, the UAW, the bondholders and Obama's task force need to focus every waking hour on striking a deal to save the domestic industry.
Perhaps that deal will involve bankruptcy, which would allow the auto companies to sever archaic labor deals, massive debt loads and laborious dealership contracts that are suffocating the companies.
Wagoner, ultimately, was not the executive to steer GM through the end of this crisis. He deserves credit for helping land a major health care deal with the UAW in 2007 - and for instituting meaningful restructuring initiatives in the last few years. But it wasn't enough. Time for someone willing to do whatever it takes to save GM.
Humm............I wonder what's next at GM
But it won't necessarily save the company. Ultimately, GM's survival is more dependent on the ability of the company's negotiators to land meaningful concessions from the UAW and GM bondholders - or the company's ability to navigate government-backed bankruptcy restructuring.
Wagoner's resignation comes as the automaker is facing a life-threatening crisis that's effectively placed the company's future in the hands of the government. President Barack Obama's auto task force is expected to report tomorrow that it would provide billions in loans to GM and Chrysler in exchange for major concessions from the UAW and bondholders within a month.
Wagoner's departure -- apparently orchestrated by Obama's team -- will surely invite a multitude of assumptions and accusations about his motives. Is Wagoner the notorious ship captain who rows away while the ship is sinking?
But let's be honest. Even if GM survives - which seems likely, even if bankruptcy is involved - Wagoner's legacy will be defined by GM's fall from grace. The company - once the world leader in vehicle production - failed to embrace alternative propulsion vehicles as Japanese rivals Toyota and Honda established themselves as the leaders in that critical segment.
Yes, the Chevrolet Volt extended-range electric vehicle, to be released in November 2010, may help revolutionize GM's image. But most of the credit for the Volt's ascension goes to GM Vice Chairman for Global Product Development Bob Lutz, who is also retiring.
Nathan Bomey covers technology, alternative energy, manufacturing and economic development for Michigan Business Review.
(Lutz, for his part, has always defended Wagoner in the face of critics who said Wagoner should be tossed out: "This is the equivalent of the Incan or Mayan days when everybody would go to the top of the volcano and throw a virgin in. It's the feeling that if we make a sacrifice that somehow the gods would be appeased," Lutz told the New York Times last year.)
Few consumers or industry experts will shed tears at the departure of Wagoner, who has vehemently resisted the prospect of bankruptcy as an option for saving GM, even as experts have said it's the best way to go. In fact, many people will celebrate.
But let's hope the parties fizzle quickly. We don't have the luxury of wasting time on celebrating Wagoner's fall from power. The auto companies, the UAW, the bondholders and Obama's task force need to focus every waking hour on striking a deal to save the domestic industry.
Perhaps that deal will involve bankruptcy, which would allow the auto companies to sever archaic labor deals, massive debt loads and laborious dealership contracts that are suffocating the companies.
Wagoner, ultimately, was not the executive to steer GM through the end of this crisis. He deserves credit for helping land a major health care deal with the UAW in 2007 - and for instituting meaningful restructuring initiatives in the last few years. But it wasn't enough. Time for someone willing to do whatever it takes to save GM.
Humm............I wonder what's next at GM
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