Who Killed Gm?

Mickey Kaus beat me into print with it, but the exact same thought crossed my mind when I heard that President Obama had demanded the head of GM CEO Rick Wagoner in return for further government aid: Is Rick Wagoner the Ngo Dinh Diem of the Obama administration? Of course, it took JFK nearly three years to come up with his, but given that the AIG bonus snafu has already been called Obama's Katrina, by no less than Frank Rich, I guess history really has speeded up.

Leave aside whether or not Kennedy intended for Diem to be killed in the coup that overthrew him as president of South Vietnam on Nov. 1, 1963. (Given Kennedy's distressed reaction to the news, it seems unlikely.) The basic situation was unchanged: you can't set in motion events that result in the death of a foreign leader and then walk away from the resulting mess. That's why the whole Oliver Stone-esque debate over Kennedy's intentions vis-a-vis Vietnam are irrelevant: JFK broke the plate; he bought it.

So, to answer the question: of course. Obama has now "bought" GM, and is stuck with the results. The man who is forever complaining that "he has enough on his plate" has now taken yet another heaping helping of big, gooey mush.

There was a good case to be made for removing Wagoner, of course, and Paul Ingrassia makes it in the WSJ. He rightly scores the GM board for not moving to do the deed itself.

But that begs the question: why weren't they? GM boards have removed CEOs in the recent past. (Ask Robert Stempel.) Could it have been that, given all the slack GM had been cut by both the Bush and Obama administrations, there was every reason to believe he would continue to dodge the bullet and survive?

Also, there was a case for keeping Wagoner as simply the best man available for a very undesirable job. He had accomplishments, e.g., shutting down Oldsmobile; reviving Cadillac; cutting the work force. Folks weren't exactly lined up to run GM, after all. And after the bonfire of the AIG bonuses, the list is likely even shorter than it was two weeks ago. (BTW, I hope Obama has his statement already written for when the details of Wagoner's no doubt exceedingly lush severance package are reported in the next few days.) No doubt UAW honcho Ron Gettelfinger will walk away unscathed as the Mr. Untouchable of the whole affair.

The beginning of the end for GM was when it started believing all the silly things John Kenneth Galbraith was writing about it decades ago. They probably believed that they were themselves untouchable and didn't have to adapt to a changing automobile market. The man who founded the company, Alfred P. Sloan (who also coined the term "CEO") wouldn't have been so foolish. In the last chapter of his memoir, em>My Years with General Motors<, written at the company's high noon in 1964, Sloan pointedly noted that the reason GM was able to establish its dominant position in the 1920s was because the Ford Company had grown complacent. The same could happen to GM, or any other market leader, he said, if that leader "wasn't prepared for change." In the end, GM wasn't ready.