By any definition, Rick Wagoner’s tenure at the helm of General Motors was a failure. On his watch, Toyota surpassed GM as the world’s biggest auto manufacturer. GM failed and went into bankruptcy, after absorbing 50 billion bailout dollars from the taxpayers, via President Bush and President Obama.
GM stock, once a part of every institutional portfolio and one of the bluest of the blue-chip stocks, went from about 70 dollars a share when he took over as CEO, to under 3 dollars a share when he was forced out a few months ago.
So, what do you get for retirement benefits after you’ve so thoroughly run a company into the ground? A lifetime salary that anybody could live on…74 grand a year…and on top of that, over 8 million dollars in cash over the next five years. Not to mention a 2.6 million dollar life insurance policy. Oh yes, and a juicy liability policy, as well.
But, as rich as that farewell package is, Wagoner would have been far better off under the terms of his previous employment contract, before the bailout. That deal would have given him 23 million dollars, PLUS his “lifetime salary” of 74 grand a year.
Now, you and I own about 61% of the new post-bankruptcy company, called “General Motors Company”. Four fewer GM brands; fewer factories and assembly plants; far fewer dealers; and hope that the company will survive - to say nothing about “thrive”.
At least they’ll still make Cadillac, Corvette, and that sexy new Camaro. The new electric car, the Volt? Ah, let’s talk about something else. We’re still workin’ on that.
As Richard M. Nixon used to say, “let me make one thing perfectly clear”. I am NOT in favor of having congress, the President, or some car-czar micro-managing the new GM. But since we own well over half the company, I’m glad somebody representing our interests is helping paint the broad strokes for the new company’s future.
There’s an old story that talks about how the Japanese and American car-makers had a rowing contest. The Japanese team had eight oarsmen and one steerer. The American team had eight steerers and one oarsman. After the American carmakers lost the first race by two miles, they reorganized the team into one chief steerer, three executive steerers, four assistant steerers, and one oarsman.
Let’s hope that Fritz Henderson, the new CEO at GM, does NOT follow in the footsteps of his predecessor, and knows that it takes more than a lot of highly-paid executives to build and sell good cars.