Elkhorn Creek Lodge

Rick Wagoner, RIP

Posted in economics by Eugene Podrazik on March 31, 2009

In some respects, getting canned is exactly what Wagoner deserved.  But, not for poor performance at GM.  Rather, for his failure to speak “truth to power” last year.  Truth to power, when it really counted.  Not, the some childish stunt by some crackpot liberal to embarrass a conservative politician; knowing that, for such rudeness, a well deserved punch in the face will not be forthcoming because of a raucous fourth estate.

And, Wagoner was in a position to do exactly that.  I would guess that whether Wagoner ever holds another job, he has accumulated enough wealth to more than comfortably support a sumptuous lifestyle.  With that economic underpinning, Wagoner was in a relatively invulnerable position to tell and tell off the solons of congress what the real problems for GM were.  Moreover, to tell Congress that many of these problems were made in Washington.  

Wagoner could have told Congress that GM’s problems stemmed from running a company for the purposes of de facto social security and medicare programs for the benefit of the UAW.  It also happens to make cars.  He could have told Congress that the CAFE standards were in place to preserve UAW jobs by forcing the manufacture of money-losing econoboxes, that no one wanted, in the US.  He could have told Congress that the CAFE standard business model was predicated on healthy sales of trucks, large cars and SUV’s to generate enough profit to offset the losses on the small cars.  He could have told Congress that anthromorphic global warming was a fraud, and a poor excuse for an economy killing tax called cap-and-trade.  He could have told Congress there was plentiful energy if bans on drilling off America’s coast lines and in ANWR were lifted.  If bans on shale oil extraction were abandoned.

Then, Wagoner could have spoken truth to his power and realized that he need to take the bull by the horns and taken GM to bankruptcy court.

But, Wagoner, being the good crony capitalist, played court jester and prostrated himself before the grandees of Congress and played to the fiction that these hypocritical blowhards actually knew something about running a business and about manufacturing cars.

The jester act was ridiculous.  He flew coach to the Washington hearing when it became known that he flew a corporate jet to the first hearing.  Never mind that jet junkets member of Congress avail themselves.  Or, never mind the veritable darkening of the skies with Hollywood’s private jets coming in for the Obama inaugural.  Never mind, that Wagoner, as CEO of an enterprise as large as GM owes his shareholders the most efficient use of his time; hence private jets.

Then the little joyride in the Chevy Volt with prominent members of Congress.  As if.  As if people with the power and clout of Senator Levin or Dodd are going to ever park their fat behinds in an overpriced econobox that will ultimately join the Trabant on the ash heap of automotive history.  Come on, a car that gets 40 miles between recharges.  And costs 40 grand.  

So, what did these prostrations get?  What did all the congressional butt kissing do (other than Barney loving it, euuu)?  Just another Obama signature throwing under the bus.  Nothing personal, Rick, just business, we needed someone to sacrifice on the altar of populism.  Just like those AIG employees.

The irony is that Wagoner actually has done a yeoman’s job in pulling GM back from the brink.  I very much suspect that even in bankruptcy court, any judge would have recognized Wagoner’s talents and work and probably kept him on for the restructuring.  In the arena of making cars, Wagoner was a star.  His failing was not really his.  Rather, it was coming up against problems and obstacles made in Washington; a UAW protected by CAFE standards, energy policies designed to jack up the price of gas.  Bankruptcy would have laid bare all of this Washington stupidity.

At least in bankruptcy court, Wagoner could have gone with his pride intact, knowing that managed GM with an honest appraisal of the realities that faced GM.



One Response

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  1. matt said, on March 31, 2009 at 6:25 pm

    This blog’s great!! Thanks :).

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