CEO Watch List - Rick Wagoner, GM, Update 2

Back in early November I placed Rick Wagoner, General Motor's GM (NYSE) CEO, on my CEO Watch List. Many specialists have given a positive take on Wagoner due to his efforts to turn the company around. I have been far more suspect. The recent GM announcement that current CFO, Frederick Henderson was promoted to Chief Operating Officer COO is just another indication of the company's frustration with Wagoner. According to a story by Mike Spector in yesterday's Wall Street Journal the promotion means,

Chief Executive Rick Wagoner will spend more time lobbying and traveling now that Frederick "Fritz" Henderson, the auto maker's current chief financial officer, has been promoted to chief operating officer.

Mr. Wagoner, speaking to a small group of reporters at the Geneva Motor Show, declined to say whether Mr. Henderson was being groomed for the auto maker's top job and stressed that the shuffling in executive ranks wasn't a reaction to GM's recent struggles. The promotion was "something I'd been thinking about for a while and talking to the board [of directors] about," Mr. Wagoner said.

... Mr. Wagoner, 55, said GM's top ranks had been "stretched" and that he will now be able to focus on other pressing issues facing the auto maker while Mr. Henderson focuses on more day-to-day concerns, such as maintaining the company's evolving global structure. Mr. Wagoner pointed to lobbying on environmental regulations and spending more time in fast-growing emerging markets as key priorities amid his new lighter workload.

If you look at the change more closely one might interpret Henderson's promotion as way to dilute Wagoner's power and actually push him upstairs. That is the way I interpret the promotion and is also the same take that Douglas McIntyre who wrote a piece in today's Bloggingstocks. According to McIntyre,

General Motors' (NYSE: GM) CEO Rick Wagoner has been kicked upstairs [subscription required], according to the Wall Street Journal. He will focus on international expansion and advanced technology. Not much of a job for a chief executive. Frederick Henderson will take over as COO and run the company's daily operation.

Wagoner's sin was that he could not launch products that would get GM back some of its market share in the U.S. He was able to cut costs and get an improved deal with the UAW, but GM's January sales were down over 12% in its home market. Its share in America is only about 25%. Toyota (NYSE: TM) has muscled GM out of its lead in small and mid-sized cars.

I plan to keep Wagoner on my watch list but there already appears to be a change at GM. Stay tuned.

For Update information see:

Financial Week 3/10
Lansing State Journal 3/6