Management changes:
Personally, I have no trouble with the CEO of GM getting ‘laid off’, forced out, or what have you. His mismanagement helped get the place where it is now…where no-kidding-GM sorts like me and Susan, who own a Buick SUV and a Chevy Van, are talking favorably of getting a Ford or Toyota to replace them.
My auto mechanic Dad called Fords Fix-Or-Repair-Daily, and hated them, and retired from a GM plant (where my parents met) after many years there.
The question is more whether (1) this shows that there’s accountability at the top for outfits that take the federal dole, and (2) whether Wall Street joins in on the fun.
A WSJ article here says that the feds would have tossed the head of Citibank, but there’s this little problem of finding someone to run the thing that isn’t as screwed up and *wants* the job. And that the ’stress testing’ in progress will manifest in April or so, and there will probably be 3-4 big banks that can then be defined officially as zombies. And then the fun can start on them.
Mr. Wagoner told GM’s board Friday evening that he was asked to step down and informed directors the administration wanted a majority of them to resign, according to two GM officials. Several volunteered to quit over the weekend. Other GM officials speculated that they would also be asked to resign. Also expected to be on the chopping block is GM’s Washington office, where the company’s in-house lobbyists work.
GM and Chrysler have had bankruptcy attorneys devising plans to split their companies in two for several months. Mr. Obama’s task force has told both companies that the administration prefers this route as a way to reorganize the two auto makers, rather than the prolonged out-of-court process that has so far frustrated administration officials, people familiar with the discussions said.
GM looks increasingly like it will be forced into filing for bankruptcy protection, sometime in mid-to-late May, and that the surviving “new GM” will retain select brands and some international operations, said several people familiar with the situation.
Under the plan, the “good” GM wouldn’t be expected to hold the tens of billions of dollars in retiree and health-care obligations that hurt the auto maker in recent decades. Instead, those obligations would be transferred to an “old GM,” made up of less-desirable brands such as Hummer and Saturn, and underperforming plants and other assets.
This part of GM would likely sit in bankruptcy much longer while a buyer is sought for the parts or it is wound down. Proceeds from the sale of old GM would go back to pay claims to various creditors.