GM/Wagoner - OK, Let's Move On

Are we over this Rick Wagoner episode? It surely was a development that drew many opinions. Was he a sacrificial lamb, as our Gov. Granholm claimed?
The White House promises that no matter what, your GM warranty will be good.
We really believe them. Those White House mechanics are crack.
Perhaps the best take of the day comes from Rick Newman at SeekingAlpha
While we disagree with regard to Newman’s take on Wagoner’s leadership and abilities – the departed CEO really was a major problem via his old school thinking – the new management won’t take the show to any better places. This is a company with problems that will only be solved through a major overhaul that a bankruptcy will put in place.
Let me allow a small story that paints a large picture of how GM is run. Last June, I went to the Hummer dealership in Lansing, Mich., where I live. I wanted to get my father a Hummer hat for his birthday. He is fond of the Hummer for its finger-in-the-eye of the environmentalists. So I walked into the showroom and was greeted with a hostile stare from a woman of about 25, who was very busy turning the pages of a glossy magazine of some sort, perhaps People or something. No greeting, no smile. Just a glare. The place was, predictably, empty.
“Hi, I want to buy a hat with a Hummer badge on it,” I told her.
“The only thing we have is in that showcase at the back of the room,” she said impatiently. I also liked her way of introducing the negative into the conversation.
I walked back and found the hat, good price, $20. She never budged, so I walked back and said I wanted to buy a hat.
Without a word, she picked up her phone and called…someone. She informed him that someone wanted to buy some merchandise and she didn’t have the key to the display case.
So I waited for about 5 minutes while this sales guy made his way. He was a pleasant man, about 60 years old. He pulled the cap and filled the spaces with some good conversation about the brand and hats and birthdays and parents.
But I couldn’t pay for the hat there. We had to go across the parking lot to a cashier in a separate building. We took a golf cart over there, and I went up to the window, where I presented the hat. The guy behind the glass – why do you have security glass in a car dealership? – scanned the hat and gave me a piece of paper.
“Take this over there and you can pay for it,” he said, pointing to another window 20 feet away on the other side of the room. I did as told. A coarse older woman took the receipt and my credit card, and I waited another 5 minutes. The sales guy who drove me over to came by to see how things were going. I told him I was perplexed as to why this would be such an onerous process.
“I really don’t know,” he said, with the air of a man who was used to this Soviet-style line waiting.
Finally, the lady huffed something at me, gave me a receipt to sign, handed me my card and my hat. I was done. I was walking away.
Except the price was different. They had charged me $30. I was 10 feet from the last window when I noticed and noted it to my salesman friend. And to redo the deal, I had to go through the same process again, more line waiting, more huffing.
I did get the hat and for the $20 price. But can you imagine what an ordeal a service issue would be? Or any transaction?
This told me exactly what I needed to know about GM. It was broken. And nothing short of a complete redesign, from the ground up, would fix it. Let’s hope that’s what comes next.
Maybe we can get a clue tomorrow in the new guy’s first presser.

GM Honcho Wagoner Forced Out By Gvt - The Same Gvt He Panhandled

Rick Wagoner is finally leaving General Motors and we couldn’t be happier. His poor performance over the past 18 months befits his rather graceless departure, and his ineptitude was on display almost monthly.
A quick visit to the Wagoner Hall of Shame includes some choice comments:
5/8/07: “You see, the global auto industry is beginning to revolutionize the way that autos are powered… and the source of the energy used… and it promises to be the biggest change to hit our industry since, well, the invention of the internal combustion engine. Why is this happening now?
Well, for a number of reasons, it has become increasingly clear in recent years that oil alone will not be able to supply all of the world’s rapidly growing automotive energy requirements.
For the auto industry, this means that we must develop alternative sources of propulsion, based on diverse sources of energy, in order to meet the world’s growing demand for our cars and trucks.”
2/10/05: “Now, some people might have thought of American manufacturing as dying... but I prefer to paraphrase Mark Twain's famous quote: accounts of our death have been greatly exaggerated. In fact, the comeback of American manufacturing in the last two decades has been a remarkable story. In the early 1980's, American business, and particularly American manufacturing, was described by many as inefficient and ineffective... in a word, uncompetitive. The U.S. was losing its credibility as an industrial power. But American business and American manufacturers worked hard to fix what was wrong. And the U.S. has emerged, once again, as the most productive and competitive economy in the world.”
6/12/03: Speaking of one of the ways GM has taken a chance and come up looking good, “by investing more than half a billion dollars in this facility, the Renaissance Center, because we have a responsibility to make sure this city has a very bright future...”
Yes, Rick has been quite the star. But who will ever forget his shining moment, his last grasp as he begged for public money on Cap Hill after flying in on his private jet.
GM has declined to comment on the move. But we are sure there is some major glee among the troops. Tomorrow’s question is of his successor. Will it be an Obama appointee or will the administration change course and allow the free market to work?

Michigan's Rep. Peter's Seeks Banana Republic: Tax AIG Bonuses at 100%

We figured that Michigan’s politicos would join the fray in criticizing the contractually-obligated AIG bonus deals. Rep. Gary Peters from Bloomfield Township has got it all figured out: Tax these bonuses at 100%.
Seems he wants to amend the Internal Revenue Code of 1986 in his plan to tax these folks. To single out a business under this code is going to be difficult, since the code is explicit in supporting the bonus as a means of compensation. These employees waived other modes of pay and this is, essentially, their salary just as our weekly paychecks are ours. We believe in honoring deals, no matter how distasteful they might be. And who is speaking out about the lack of due diligence on the government's part before handing over the money to AIG?
It would be like someone saying that the workers at General Motors, since it has been the recipient of federal funding, should be subject to a special tax because they are overpaid. One of my esteemed blogging peers has laid that out quite proficiently.
But while that is hardly be a cool thing to assert here in the U.S., folks in Canada are gutsy enough to say just that. And by the way, where was the outcry to tax GM chief Rick Wagoner's pay package last year worth $14.9 million, despite a $30.9 billion annual loss and billions in government aid? The pay was his contractually-obligated salary. But surely it was excessive given his performance.
AIG struck a deal that and has to keep that deal or we will end up paying the bonuses plus legal fees.