Welcome to the Cadillac XLR Forums!

Off with their heads! (But whose?)


Seasoned Member
Staff member
Site Administrator
Oct 7, 2006
New Hampshire
My XLR/V(s)
Not yet!
Off with their heads! (But whose?)

Lindsay Chappell
Automotive News
November 18, 2008 - 3:12 pm ET

If Congress demands new management in exchange for financial aid to the Detroit 3, legislators may have a tough time figuring out which executives must be replaced.

Two of the Detroit 3 already are steered by the type of leaders often sought in shake-ups: newcomers with proven track records.

Ford Motor Co. CEO Alan Mulally and Chrysler LLC CEO Bob Nardelli both were recruited from outside the industry to restructure the money-losing automakers. And each of them has lured high-ranking managers from Toyota, the automaker whose success is often held up as a model for the U.S. companies.

Congressional leaders haven't committed to any specific plans for industry aid. A Senate proposal offered Monday included no demands for management change while prohibiting "golden parachutes'' for a company's top five executives. But the Detroit 3 chiefs prepared to testify in Washington today amid calls that any help be tied to their removal.

"The management is not innovative -- they need to go," Richard Shelby, R-Ala., the ranking Republican on the Senate Banking Committee, said on CBS' "Face the Nation" Sunday.

"It's on the table," said John Spragens, a spokesman for Rep. Jim Cooper, D-Tenn., a member of the House Budget Committee. "Implicit in this whole conversation is management change, whether by mandate or agreement."

Such a demand has a precedent. The federal $85 billion bailout of insurer American International Group (AIG) in September resulted in the replacement of CEO Robert Willumstad. The Bush administration selected retired Allstate Chairman Edward Liddy as Willumstad's replacement, even though Willumstad had held the post for just three months.

Glare on Wagoner

Most of the glare may fall on General Motors and its CEO for the past eight years, Rick Wagoner. On Nov. 7, when it posted its fifth straight quarterly loss, GM said it may run out of operating cash in the first quarter of 2009.

Some observers predict a GM management change will be a prerequisite to taxpayer funding. The New York Times reported today that a major question surrounding Wagoner is whether he'll keep his job.

"The public is asking for it, and Congress will have no choice but to ask for it," said John Wolkonowicz, an industry analyst for IHC Global Insight in Lexington, Mass.

"The public is grossly misinformed," Wolkonowicz said. "Wagoner has been doing a good job. Ford and Chrysler might get a pass, but Wagoner could be the sacrificial lamb."

Thirteen months ago, Wagoner, 55, capped three years of selling assets, closing plants and shedding workers by striking a historic deal with the UAW. The 4-year accord, copied at Chrysler and Ford, slashed the pay of new hires to about half the level of current workers and created a fund to shift $51 billion in retiree health care obligations to the union.

Shareholders responded by boosting GM shares above $42, a three-year high. Since then, GM has been crippled by record gasoline prices, which drained demand for its big pickups and SUVs and exposed its weaknesses in cars. Now, like other automakers, it's being squeezed by a global credit crunch that prevents customers from getting financing.

Stock below $3

In the meantime, GM's losses are mounting. It hasn't posted an annual profit since 2004. The stock last week traded below $3, the lowest in six decades. Its vehicle lineup, credited by reviewers as improved, hasn't delivered an annual U.S. sales gain since 1999. GM's U.S. market share stood at 20.1 percent at the end of October, down from 28 percent in 2001, when Bob Lutz joined the company to steer a product renaissance.

Wagoner last week told Automotive News that stepping down would be "counterproductive."

"What the industry needs now is the most competent, most experienced, most capable leadership team they could have at each of the companies," he said.

Mulally, 63, took the reins at Ford just as the automaker was about to undertake its third restructuring in five years. He came from Boeing Co., where he is credited with reviving the company's sagging commercial aviation unit and winning back market share from rival Airbus S.A.S.

Ford is benefiting today from a decision Mulally made within three months of his arrival: raising $23 billion by mortgaging its assets, including the blue oval trademark. As a result, Mulally told Automotive News that Ford now is in a different financial situation than the other two Detroit automakers.

Mulally's marketing chief, Jim Farley, was hired 13 months ago from Toyota, where he had been general manager of Lexus.

Still, Ford hasn't posted a monthly sales gain in the United States in 12 months. And it's wrapping up its 13th straight year without gaining market share.

Chrysler's financial situation is less clear. As a unit of private-equity firm Cerberus Capital Management LP, Chrysler isn't required to release financial information.

Cerberus hired Nardelli in August 2007 as it took control of the company, ending nine years under Germany's Daimler AG. Within a month, Chrysler had lured two of Toyota's top North American executives, co-President Jim Press and marketing chief Deborah Meyer.

Chrysler hasn't delivered a sales gain since last December, and it continues to pare its model line, cut jobs and close factories. It also has been plagued by being the automaker most dependent on trucks at a time of higher gasoline prices.

Still, Nardelli, Press and the other Chrysler brass get credit from Jim Arrigo, a Dodge-Chrysler-Jeep dealer in West Palm Beach, Fla.

"They're not to blame for this crisis we're in," Arrigo said this morning as he and 32 other dealers called on legislators in Washington to support Detroit loans. "We've got a great future if we can just get through this immediate problem."
I know I should read all this so that I can discuss it intelligently .... but you know ... I am so saturated with this from all of the media, all day long .... it makes me :willy_nilly:.... anyone got an Advil? :pat:
I hate to say it but maybe they should hire a Japanese Exexutive. While the big 3 are failing Honda just opened a new plant in Indiana and hiring more people. Honda hasn't had a layoff in 50 years in business. Makes you think about what the unions have done by demanding so much every contract renewal. Just my 2 cents.
I have read where the Big 3 have hired top people from Toyoto and other competitors. It appears to me it is more the fault of past and present people that we elected and sent to Washington who deregulated our banks, insurance companies and wanted people to have mortgages that couldn't afford them than the auto industry that got us into this hugh downturn in our economy. Sales have plumeted due to the fact our economy has plumeted, not because the Big 3 is producing bad vehicles. It seems to me GM has been doing just about everything possible now and in recent years to stay healthy and was making progress until this great disaster caused by our elected officials. We need to save our auto industry or this country will be at the mercy of all the countries that hold our debt. First Robin:patriot:
What they need to do is stop looking for a change artist to ride in on a white horse with a bag of cash ala Lee Iacocca.

Lee Iacocca is deservedly remembered as the first of the powerful CEO's who rose up with great style and flair, turning around a company that was destined for failure. The problem is; it was not sustainable since they never really changed directions - they just focused on short term goals and achieved them. That is what good companies do; however great companies look within, discover what they do best (and enjoy doing) and build on that. Also keep in mind, Iacocca borrowed a ton of money which really helped with the turnaround - for the short-term......read on!

Chrysler's short term gains were over-shadowed by Iacocca who some may remember actually entertained the idea of running for President; stating, "running Chrysler has been a bigger job than running the country. I could handle the national economy in six months."

Iacocca became very wealthy during his time with Chrysler, but in the last half of his tenure, Chrysler stock fell over 30% behind the general market. He announced and postponed his retirement so many times it was an inside joke for many other top execs. The problem was he did not wish to give up the limelight and power, at the expense of the gains the company had experienced. It became more about him than Chrysler. He personally appeared in over 80 commercials and spent more time on talk shows than in the board room.

Sadly, when it all ended, he retired but demanded Chrysler provide him use of a company jet and his stock options. Wasn't long after that he teamed up with Kirk Kerkorian and tried a hostile takeover of Chrysler - which failed.

Less then five years after he left, Chrysler's board sold themselves to Daimler-Benz.

Is all of this Iacocca's fault? No - however it proves his business model was unsustainable. In my mind, he failed the moment he began to believe he was more important than the health and welfare of the business and all of his earlier supporters.

He also failed the tax payers who took a chance by bailing out Chrysler, who is now back on our doorstep begging for another handout. What is most appalling is their references to their earlier bailo0ut, saying, "we did it before and we can turn-around again".

Americans need to remember that ANY business that does not possess the capability to develop and implement a sustainable plan needs to fail!!!

Cadillac XLR Forums

Not a member?  Join now!  It's Free!

Learn more about Supporting Membership

Win 2 Supercharged Cadillacs!

Win both supercharged Cadillac Vs!

Supporting Vendors

Taput Tunning LLC

Top Hydraulics

Cadillac XLR Registry

Click here to enter the official Cadillac XLR and XLR-V Registry
Top Bottom