Management Turnover as Change Agent

Thursday, November 8, 2007

CEO Watch - Rick Wagoner, General Motors

Rick Wagoner CEO of General Motors GM (NYSE) has previously been slated by analysts and top investors a number of times as a sacrificial lamb for General Motors declining fortunes. He has to the surprise of many managed to survive despite these challenges. To his credit, lately many of his most vocal naysayers thought he might actually succeed in turning the company around. That was somewhat true until the latest report that GM reported the largest three month loss in the company's history. GM has been caught in the credit crisis as have many others particularly in the financial industries.

In an article by Chris Isidore of CNNMoney.com he stated,
(GM) reported an operating loss more than 11 times larger than expected and a $39 billion charge that was among the biggest profit hits ever reported.

The nation's No. 1 automaker, which was hit with a soft U.S. auto market and a two-day strike by the United Auto Workers union during the quarter, lost $1.6 billion, or $2.80 a share, excluding special items.

That compares to the forecast of a 25-cent-a-share loss from analysts surveyed by earnings tracker Thomson First Call and earnings per share of $497 million, or 88 cents, on that basis in the year-earlier period.

Among the problems hurting GM results was a $2.3 billion loss in the home loan business at GMAC due to problems from the meltdown in subprime mortgages. GM sold a majority of GMAC but still owns 49 percent of the lender.
It is difficult to imagine, even with the high-level of support Wagoner has managed to receive from his board that he will be able to ride these results out and remain in charge of GM.

Stay tuned this will be a continuing story.

For more:

BusinessWeek
LA Times
Financial Times
BBC
SmartMoney
BloggingStocks

2 comments:

Nancy said...

GM reported a $39 billion lost yesterday. Yet there are those who believe that the company can turn itself around. The NewsVisual article http://www.newsvisual.com/newsvisual/2007/11/gm.html presents a map of its company’s board, and thereby concludes that they have the collective experience to surmount this crisis. But maybe a merger is the solution to their problems.

Nancy said...

GM reported a $39 billion lost yesterday. Yet there are those who believe that the company can turn itself around. The NewsVisual article http://www.newsvisual.com/newsvisual/2007/11/gm.html presents a map of its company’s board, and thereby concludes that they have the collective experience to surmount this crisis. But maybe a merger is the solution to their problems.