Tuesday, December 9, 2008

GM's Rick Wagoner admits "disappointing and betraying" its customers

It seems as if Mr. Wagoner is clutching at straws now. The only question remaining is why the timing of this confession? Will it help him keep his job and/or will it help GM secure the loans it so desperately needs?

From Reuters:

General Motors Corp on Monday unveiled an
unusually frank advertisement acknowledging it had "disappointed"
and sometimes even "betrayed" American consumers as it lobbies to
clinch the federal aid it needs to stay afloat into next month.

The print advertisement marked a sharp break from GM's public stance
of just several weeks ago when it sought to justify its bid for a
U.S. government on the grounds that the credit crisis had undermined
its business in ways executives could never have foreseen.

It also came as Chief Executive Rick Wagoner, who has led the
automaker since 2000, faces new pressure to step aside as GM seeks
up to $18 billion in federal funding.

"While we're still the U.S. sales leader, we acknowledge we have
disappointed you," the ad said. "At times we violated your trust by
letting our quality fall below industry standards and our designs
became lackluster."

The unsigned open letter, entitled "GM's Commitment to the American
People" ran in the trade journal Automotive News, which is widely
read by industry executives, lobbyists and other insiders.

In the ad, GM admits to other strategic missteps analysts and
critics have said hastened its recent decline.

"We have proliferated our brands and dealer network to the point
where we lost adequate focus on the core U.S. market," the ad
said. "We also biased our product mix toward pick-up trucks and

But GM also says in the ad that it was hit by forces beyond its
control as it tried to complete a restructuring earlier this year.

"Despite moving quickly to reduce our planned spending by over $20
billion, GM finds itself precariously and frighteningly close to
running out of cash," the ad says.

A failure of GM would deepen the current recession and put "millions
of job at risk," according to the ad, which also highlights the
automaker's pledged restructuring and intention to begin repaying
taxpayers in 2011.

GM spokesman Greg Martin said the ad was an attempt by the automaker
to present "a pledge directly to the public."

"We believe we need to deliver this commitment unfiltered since
quite a bit of media commentary has not kept pace with our actual
progress to transform the company," Martin said.

Senate Banking Committee Chairman Christopher Dodd, a Democrat from
Connecticut who is central to the effort to craft an auto bailout
bill, on Sunday said GM should replace Wagoner.

GM says Wagoner has the support of the company's board.

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