Rick Wagoner Gone

Rick Wagoner is finally out as CEO as GM. He left at the urging of the Obama administration. Finally there has been some accountability Should there be rejoicing or dancing in the streets? Will Wagoner's successor be able to sprinkle magic dust on a system that is headed toward failure?

Rick Wagoner has been in a position to save GM since 1992 when he was the CFO. That's 17 years to turn the company around. Yet since 1992, GM's market share has dropped from 33% to 17%. I believe that GM's performance would have been the same regardless of who was in charge.

Why did I single out Wagoner if the system he was running was destined for failure? Because he was the poster child for the systemic failure of American manufacturing businesses. He also representative of a system of leaders that put themselves first. While he knew his company was failing, he along with thousands of GM executives were happy to take massive salaries from a dying company.

What Rick and other business leaders have failed to realize is that the environment has changed. What worked in American business, what is still taught at our greatest MBA factories, no longer works.

In his article for Forbes entitled "Why Rick Wagoner Had To Go", Jerry Flint agrees that Rick had to go but rightfully wonders is there anyone who can do better?

"it might be a mistake to cheer Wagoner's leaving, because we don't know if his replacement will be any better. The second in command, the president and chief operating officer, is Fritz Henderson, and he is expected to succeed Wagoner, at least for now. Frankly, it is difficult to see what he did to become president of the once largest automaker in the world. "

There will always someone who will step in to take the large salary and say they can do it better (will Fritz now take a $1 per year salary?). The data says that GM will continue on it's sad path to nothingness.

Updated Chart

I wanted to update GM's scorecard. GM released their 2008 earnings. The good news is that Rick's performance improved by $7 Billion from 2007. The bad news is that GM still lost over $30 Billion in 2008. That's a whopping (negative) $327,000 per employee!

Now during Rick's tenure, GM has lost a cumulative $67 Billion. I hate to break the news to GM shareholders but this guy is not a winner. He looks like a winner but he is NOT a winner.

GM has asked for a total of $25 Billion to save the company. That comes out to over $250,000 for every single employee at GM (most of whom will be laid off over the next few years). I wonder if we wouldn't all be better off giving this money to the employees to start their own businesses or maybe just to give them a 4 year vacation.

I have one simple question, why does Rick still have a job?