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
SUVs."

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.

GM CEO, Rick Wagoner, may be asked to step down

Legislators have been working this weekend to craft legislation that would "bail out" The Detroit 3. It appears that the monies will come from a previously approved 25 billion dollar package that was earmarked for the re-tooling of manufacturing lines, enabling automakers to produce more green/hybrid vehicles. Yesterday we heard the first rumblings of the appointment of a "car Czar" that would be appointed as overseer of this new bailout. Whether or not this would materialize and who would be appointed remains to be seen.

The very latest news is interesting, to say the least. This lame duck session of Congress really wants to control the funds given to the US automakers as evidenced by the use of a car Czar but now some are calling for the removal of GM CEO, Rick Wagoner.

From the Wall Street Journal:

"Now that Congress appears to be moving forward with at least an initial injection of federal money for General Motors Corp. and Chrysler LLC, the two troubled auto makers are under pressure to push ahead with tough measures to change how they do business -- including the possible replacement of GM Chairman and Chief Executive Rick Wagoner.

Sen. Chris Dodd (D., Conn.), a key supporter of aid for Detroit, suggested Sunday that Mr. Wagoner should go as part of any broader bailout package. "I think you've got to consider new leadership," the senator said on CBS's "Face The Nation" talk show. "If you're going to restructure, you've got to bring in a new team to do this," he said. "I think [Mr. Wagoner] has to move on."

Folks, this is really strong medicine for GM to swallow. I applaud Senator Dodd for making this suggestion and I also believe that he is correct. What I cannot understand is the GM Board of Directors, who have stood by and silently watched this once proud company be reduced to rubble. They have remained mute on the sidelines, watching Rick Wagoner steer the company directly into the ground. To be honest, he should have been fired years ago. Making matters worse is the knowledge that Wagoner will not own or shoulder any responsibility for the company's failure. Wagoner says he will not step down and maintains the he needs to remain with the company to help them through this rough patch. Hogwash Rick.

Tell me what you think. Should Rick Wagoner remain CEO and help the ailing company through this transition into a leaner, more efficient corporation or should he step aside to let someone begin with a clean slate? Senator Dodd's suggestion may be ignored after all is said and done and Wagoner may be allowed to skate.

GM's Rick Wagoner arrives in a Volt

These are pics of the Volt Mule driven by Rick Wagoner today!

Rick Wagoner arrives in Washington

Here is an image of Rick Wagoner emerging from the Chevy Malibu Hybrid vehicle on December 3rd in front of his hotel that he drove to Washington. Today, he will ride in the Chevy Volt plug-in hybrid prototype to the Senate hearings.

GM News re-cap

Let's have a look at the events surrounding General Motors this past week. The biggest news is that the company petitioned the FAA to prevent public tracking of a corporate jet it leases. This is a strange request, don't you think? A GM spokesman, Greg Martin, had this to say, "We availed ourselves of the same option as others have", meaning the ability to ask the FAA for tracking exclusion. He went on to decline giving a reason for the request. Instead, we get to guess at the reason and all I can come up with is that tricky Rick Wagoner wants to jet-set without us knowing. You have any ideas?

In other news, GM is looking to raise one quarter of a billion dollars from the sale and leaseback of some of its European offices and other property assets. Normally, this would seem like a large sum of cash, but these are not normal times for the auto giant. When we last checked, General Motors was burning though 2.5 billion dollars in cash per month and nearing bankruptcy. This 270 million dollars it is trying to raise is apparently part of a push to raise 4 billion in asset sales and capital market transactions. I wish them well and hope they secure these funds to help them through these hard times.

I promise to keep you posted this week as the Big Three make their final pitch (at least the final pitch in 2008) for emergency government assistance. It should be fun to watch!

Gm cannot wait for Obama

I hate to give so much coverage to GM on this blog, but the news stories that break each day are fascinating. GM's Rick Wagoner was interviewed recently by Automotive News and the following is an excerpt from their website, www.autonews.com:

"General Motors CEO Rick Wagoner says GM's financial distress is so dire that it must line up financial assistance from Washington before President-elect Barack Obama takes office in January.

"This is an issue that needs to be addressed urgently," Wagoner said during an exclusive interview today with Automotive News. Now is the time to "overshoot, not undershoot" when it comes to assistance for the auto industry, he added."

That's right Rick, God help us if we "undershoot" our bailout funds! Gimme a break. Wagoner also stated that he should not resign, as a solid management team was needed during this difficult period. Whatever. News flash Ricky, the current management team is the BIGGEST part of the problem! If GM would not have bet the farm on SUV's, Hummer's and pickup trucks, then they would not be in this mess.

Wagoner continues his commiseration in the same interview:

"In return for financial aid, General Motors is willing to offer the government preferred stock, set limits on executive compensation and speed the introduction of fuel-efficient vehicles."

Speed the introduction of fuel-efficient vehicles, he says. Isn't it Pat Benatar who belts out those song lyrics, "It's a little too little, it's a little too late"?