Board battle looming at GM?
Rick Wagoner may have won the Renault-Nissan battle, but the boardroom wars are far from over for General Motors' beleagured chief executive. Wall Street analysts are telling investors to brace themselves for a lengthy and bitter fight for control of the company's board of directors, led by dissident shareholder Kirk Kerkorian.Kerkorian's right hand man in his GM adventure, Jerry York, resigned last week from the GM board, saying in his resignation letter that the board environment made it hard for directors to challenge management and that GM should have brought in advisers for the board to evaluate independently the potential benefits of an alliance with Renault and Nissan.
York is set to make another presentation to GM investors at the end of the month, this time in Las Vegas. His last such presentation, this January in Detroit, was scathingly critical of GM's turnaround strategy, and after his stint on the board, we can expect him to fire a new salvo with fresh ammunition.
Kerkorian, meanwhile, is expected by some analysts to be preparing for a proxy fight to shift the balance of power in GM's board and ultimately give Rick Wagoner the boot.
[Source: Reuters]
Reader Comments (Page 1 of 1)
JoeArlo 10:34AM (10/10/2006)
GM's Board of Directors should take a lesson from Rick Wagoner and Bob Lutz. They are orchestrating a successful turnaround that might just be SUSTAINABLE (as opposed to Ghosn's one-trick-pony show). Maybe the Board of Directors should stop paying mind to Kirk Kerkorian, Jerry York, and their stock price and focus on the consumers, who are the main drivers of their business. If there is anything one can gain from watching Toyota, a focus on creating value for customers will result in significant returns to shareholder value.
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Finished Law School 10:58AM (10/10/2006)
Within the past calendar year Wagoner threatened the board that he would immediately quit if they did not publicly support him. Without anyone on hand to replace them nor without warning of this childish fit the GM board felt that they had nothing to do other than support Wagoner despite his complete lack of performance.
Kerkorian and York's concerns about the GM board are legitimate and truthful.
It is surprising how many people commenting here are too ignorant of business operations to understand this as is it just as surprising how these same ignorant people support Wagoner and Lutz despite their stupidity and lack of results in their roles as GM executives. You would think that these GM supporters would want a change to more effective leadership.
It looks like the GM fans and the GM board are all of the same ignorance and stupidity.
Maybe you are all UAW people - that would explain the complete lack of intelligence.
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AutoFan 11:20AM (10/10/2006)
Can somebody, and I mean this sincerely, explain what Wagoner is NOT doing? He's cut jobs, closed plants, reworked healthcare, and with Lutz on board they've designed and built much better cars that are now seeing the light of day. It seems to me that he's addressed the major problems GM faced from a business standpoint. From the product standpoint I'd say that I'm no GM fan, but some of the new stuff is pretty nice, and a lot of what's in the pipeline seems even better. Consumers seem to have responded as well, since GM didn't have to resort to Employee Pricing or other super-incentives to make it through the summer in good shape.
Just curious what the perception is.
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5 watt 12:23PM (10/10/2006)
The problem that both Wagonor and GM have is not what they are doing today, but what they did for the previous 10 years. Many people on wall street and the media have not (and shouldn’t) forgive Wagonor for letting GM slide for so long.
Wagonor dose seem to be doing a good job with the turnaround and I see know reason to change upper management now. But I do believe that he should step aside once the turnaround is done for someone that is better at keeping the pressure on in good times.
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Pizza the Hut 12:27PM (10/10/2006)
Finished Law School needs to calm down. Chill out dude. Jesus Christ.
Kerkorian is an ass - he needs to step back and let management follow through with their plans. The products coming down the pipeline look good, costs are being cut in most major areas of the business and the stock price has been steadily increasing since the beginning of the year. Unless he and his cohorts can negotiate a better labor contract with the UAW than Wagoner and Company can, then they just need to butt out.
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joec 4:01PM (10/10/2006)
I'll tell you what Wagoner should have done, considering he started his career with Gm, he rose through the ranks, he knows the detailed problems of the company. Knowing all this, only after GM came close to bankruptcy did he understand the danger, thats the difference between Ghosn and Wagoner. It looks like we didn't learn anything from MCI or Enron, we need competent people to run these major companies. Ghosn is a proven man in restructing. Wagoner, Lutz and the GM board needs to be replaced.Wagoner and his cronies think they saved the company with their new 2007 GM brand models. Every car Gm makes, it still isn't profiting. The sad part to all this is that GM will survive one way or the other, so will Ford, If the need arrives, they will be bailed out.
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iQuack 12:48PM (10/10/2006)
GM might currently be moving faster to fix itself, but this is a company that needed crisis management years ago--maybe even a couple of decades ago.
Stuffy directors and arrogant senior managers should be replaced. Action from Kerkorian/York will do more good than harm at this point.
GM has been moving like a glacier and it needs a kick in the ass. Kerkorian/York should be applauded if they shake things up at this languid monolith--and the sooner, the better!
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Richard Warren 6:49PM (10/10/2006)
Board fights? Nothing new here. Boards fights and changes even happen when a company is going along OK.
Kerkorian and York don't give a damn about GM, it's future or cars. All they care about is what they can make. For Christ sake, Kerkorian is 87. Do your history and see the stunt he pulled at Chrysler. He's a money guy, not a car guy and the last thing GM needs is another bunch of money men guiding their future. If all you want is to make a buck for stockholders then these guys might be OK, key word, might.
While Rick Wagoner is not my favorite guy, he has 2 decades of piss poor mangement before him to try and fix and it takes time for changes in any corporate culture to start happening. He's been in a position about three years to really make some changes and he's actually done a lot of that.
#2 . Within the past calendar year Wagoner threatened the board that he would immediately quit if they did not publicly support him. DUH! If you were CEO, had a plan, were working the plan, I think you'd ask for support too.
If we want to talk about true piss poor management,and lack of direction, I'd direct your attention to 1600 Pennsylvania Avenue
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Bill Maher is an Idiot 12:29AM (10/11/2006)
Kerkorian is a senile old fart, but Wagoner lacks the energy needed to lead a corporation.
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