DETROIT (Reuters) - General Motors Chief Executive Rick Wagoner will resign from the company, a government official and another person briefed on the matter said on Sunday, a day before the government is expected to announce if it will extend more aid to GM.
The following are quotes from analysts and consultants on Wagoner’s expected resignation.
“It looks like the Obama administration is offering up Rick Wagoner as a sacrifice. They have a PR problem on their hands. They are bailing out just about anybody that shows up and says they need cash, the public has grown weary of it and instead of throwing a banker to the wolves, they have decided to throw Wagoner to the wolves.
“Wagoner is kind of pivotal to turning GM around. I had called for his resignation three years ago, but I stopped doing that because I started to see him ‘getting it’. This is not going to necessarily improve the competitive viability of General Motors. It might give them a more tougher approach to the union.
“The guy gets it. He understands the company. At this crucial time, I don’t know that you change captains of the ship in a terrible storm when you have a competent captain. Even if he got you into the storm, he knows how to get you out, so I’m not happy with this.”
“It seems to me to be the politically expedient thing to do. It might help for them to get more aid with a Congress that is reluctant to provide more aid.
“For them to change captains right in the middle of the rapids is not something GM would have done on their own. But now Obama and Geithner can go to Congress and say we’ve asked them to make the ultimate sacrifice and now they need more money.”
On GM President and Chief Operating Officer Fritz Henderson, who is the presumed internal successor to Wagoner:
“He can step in and continue things. This is not necessarily an environment where you can shop for someone from outside. When Ford brought in Mulally they still had a buffer, in a sense.”
ROB KLEINBAUM, MANAGING DIRECTOR, RAK & CO, EX-GM EXEC
“If this is just sacrificing the CEO in some ritual way when nothing else changes then it will really mean nothing.”
DAVID COLE, CHAIRMAN, Centre FOR AUTOMOTIVE RESEARCH
“I know he would do whatever is best for the company. It wouldn’t surprise me in this kind of situation where someone has to fall on the sword to try to prove that what they are doing is the right thing.
“You can’t really judge anybody during this kind of period because of the dramatic decline in revenue that is an absolute killer for an industry that has high capital costs.
“The hand that he was dealt was a toughie because of the size of the legacy problem that General Motors had more so than the other two domestics. I think when the history is written that Rick will be looked upon very favourably.”
“We had feared the Obama administration may force some of the executives out. But we don’t really see how this would make GM the better, stronger company that Obama wants it to be.
“There is already so much turmoil in the industry that to some extent, this is just one more upheaval.
“This does not solve the baseline problem of the auto industry that consumers are not buying cars. To point to him and say he is a problem, I don’t think is realistic. He certainly was more of a help than a hindrance.
“I think we’ll see him replaced internally. I think it’s going to be Fritz Henderson.”
REP. THADDEUS MCCOTTER, DETROIT-AREA REPUBLICAN AND MEMBER OF THE HOUSE FINANCIAL SERVICES COMMITTEE
“Mr. Wagoner has been asked to resign as a political offering despite his having led GM’s painful restructuring to date. Mr. Wagoner has honourably resigned for the sake of his company’s working families.
“When will the Wall Street CEOs receiving TARP funds summon the honour to resign? Will this White House ever bother to raise the issue? I doubt it.”
JEREMY ANWYL, CHIEF EXECUTIVE OF EDMUMDS.COM, AN AUTO INDUSTRY AND CAR SHOPPING WEBSITE
“GM’s problems are deep-rooted, going back to the 1980s, and that’s why they proved so hard to fix. Rick just inherited the mess.
“You can create incremental change or big-bang change, and Rick was very much an incrementalist and in the end it just wasn’t enough.
“The economy right now is exposing all of the car companies. None of them are viable. It’s just that some of them have deeper pockets than GM right now.
“I think this decision gives Obama the air cover he needs to give GM the money it needs.”
Reporting by Kevin Krolicki, David Bailey and Jui Chakravorty Das; compiled by Soyoung Kim; editing by Patrick Fitzgibbons.