What's that about where nice guys finish?

Rick Wagoner is finally out of the hot seat.

After years of being the guy sitting in the chair perched over the pool of water as people threw baseballs at the trigger to dump him in, he has resigned as Chairman and CEO of General Motors.

A statement said he was leaving at the request of U.S. President Barack Obama's administration.

You can read into that that further government support to the company was contingent on him stepping down.

It's a shame in a lot of ways.

I have had the pleasure of interviewing Wagoner on a number of occasions over the years, and he is one of the nicest guys in the business.

He had an amazing memory for names and facts, and a pretty good grasp on what the industry needed to recover and prosper.

He wasn't a 'car guy' in the traditional sense - his specialty was finance, ironically. But he made a point of hiring car guys like Bob Lutz, and giving them the freedom to develop the products with the design, technology, value and quality the market wanted.

The fact that the Chevrolet Volt, due late next year if the company survives that long, appears to be the most logical way to introduce electric cars to our market, and that Buick ranked at the very top of the J. D. Power list for quality a couple of weeks ago, are indications the company was on the right track.

But GM - and to a somewhat lesser extent Ford and Chrysler - couldn't overcome the legacy cost issue that has bedevilled them for decades, a problem created by the U.S. government's systemic failure to bring that country into the 20th century, let alone 21st: it remains the only major industrialized nation to tie pension and medical benefits to the company you work for, rather than the society you live in.

This gives major advantages to 'new' entries to the economy, just as it did when the same issue decimated the U.S.-based airline industry in the 1970s. Younger workers in newer companies will work for lower wages, and don't care about titanium hips.

So let's toss the older workers, the ones who built the society the newer companies now benefit from, on the scrap heap of history and carry on.

GM and the other domestics have managed to extract major concessions from their unions - forcing everyone to renege on deals that were made if not in good faith, then at least by the collective bargaining rules that existed at the time (reminds me of that classic line from "Butch Cassidy and the Sundance Kid" - "Rules? In a knife fight?")

But it wasn't enough.

This was a knife fight.

And Rick Wagoner has lost.

Comments

[Nick B.]

Two edged sword here, in my opinion.

Wasn't Wagoner in the "driver's seat" when GM decided to kill Oldsmobile (bad move), give birth to Saturn or at least market it like as if it was the best thing since sliced bread (another bad move), led GM into a position where it has way too many models of essentially the same vehicles competing against each other (yet another bad move), allowed GM to produce some real duds - Pontiac Aztek anyone? (more bad moves), etc, etc, etc...

Yet, I don't fancy governments telling the auto industry what kind of cars they should produce.

Last time we had that scenario, people were given a choice of either a Trabant or a Wartburg or a Moskvitch...
Not pretty!

[Mike T.]

I'd be willing to lose too if I got a 23 million dollar payout.

[Alan Wayne Scott]

For more than half a century, the auto industry deluded the market into desiring the largest, dirtiest, most dangerous vehicles that could be squeezed onto our existing roads, and still the lifelong shills for this inanely self-destructive business model, would have us believe the foundering car companies were just giving the public what they wanted.

Well, it is over, folks. The emperor has no clothes.

Vehicle manufacturers would do well to design new products that actually function well in a new transportation reality that will largely limit the accustomed privilege formerly enjoyed exclusively by the driving public. Maybe, if these companies are as devoid of creative vision as they seem, they should talk to some avowed non-motorists who have been victimized by North America's dim, corrupt mobility strategy, for a lifetime. The successful car-makers of the future will have to come up with compact, sustainable, urban-oriented designs, before today's consumers will be interested in buying anything from them ever again.

[Jim]

Hi Nick:

Well, damned if you do...

W/R/T Oldsmobile, most commentators say GM should have cut more brands, not simply Oldsmobile. Even that decision was tainted by US lawmakers - state legislatures are strongly influenced by the very powerful lobbying done on behalf of car dealer associations, which makes it very difficult for manufacturers to cancel franchises. There is strong suspicion that Oldsmobile was targeted despite (as you imply here) having at that time one of the strongest product lineups in its history, rather than the larger yet probably less viable Buick, mainly because Buick's dealer associations were perceived as being stronger, and the lawsuits would have gone on forever.

Hindsight being what it is, Saturn seemed like a good idea at the time, and while their products may not have been world-beaters, their sales processes did indeed lead the world in J. D. Power surveys for a long time.

Aztek? Hard to imagine that ever making it to market, but as the old British sitcom was entitled, "All Mothers Do Have 'Em".

I'll have more to say on Governments running car companies shortly, but your examples do indeed give pause.

Jim Kenzie

[Jim]

Hi Alan:

Well, those "shills" you detest so much truly wish they ever could have deluded the buying public the way you think they could.

Never happened; never could happen. You can lead a horse to water, etc.

The car makers do indeed build what the public will buy. That's how our free market system, for better of for worse, operates.

Nobody ever held a gun to a car buyer's head.

The fact is, that when gasoline is free, as it is in the US (w/r/t world markets anyway), consumers will buy the biggest, most comfortable vehicles they can afford.

When GM, Ford and Chrysler built smaller, more fuel-efficient cars as required by American CAFE laws, they couldn't throw them off buildings onto unsuspecting consumers.

Those consumers bought big pick-up trucks and SUVS instead.

Why do you think Nissan and Toyota both built full-size pick-up trucks and SUVs?

Because that's what the public wanted.

Cars today are safer than church, and their pollution control systems so effective that the exhaust coming out the tailpipe is often literally cleaner that the air going in.

I don't know what your idea of a public mass transit system might be, but I can guess. Space prohibits a proper dismantling of that argument, but the fact is that nowhere in the world has there ever been a "public mass transit" system that has paid its own way.

So, to paraphrase that old oil filter commercial, "you can pay me now or you can pay me later".

Jim Kenzie