• Apr 14th 2009 at 4:20PM
  • 30
According to the Detroit Free Press, General Motors interim chairman, Kent Kresa, has been asked by president Obama's administration to replenish the automaker's board with fresh blood. Kresa said that while the board did achieve "historic things" recently, like renegotiating the UAW pay scale, he also said that the board didn't fully comprehend the magnitude of the downturn.

As it did in asking Rick Wagoner to step down, perhaps the White House Auto Task Force views GM's board as too steeped in the way things used to be. They are, after all, the same folks who backed Wagoner fully not even a year ago. Kresa is interviewing potential board members with an eye to replacing six people, which would be half of the current board, by June.

[Source: The Detroit Free Press | Image: Getty/Jeff Haynes]


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  • 30 Comments
      • 6 Years Ago
      The problem is not that the board should be left in place. It is quite possible that they should be replaced.

      The problem is that the government has no authority to have them replaced, nor did they have the authority to have Wagoner replaced.

      The SHAREHOLDERS BOUGHT SHARES, and they bought their right to vote in the company. The company is not a public entity in respect to government, it is only publicly available for sale of shares.

      The government of a free country should not have the power to manage private citizens or their lawful activities. The President of the US is not the President of the company or the board of directors, nor the CEO, nor any other authority.

      The Chief Executive of the US only has authority to enforce the constitutional laws of the United States, which GM is not breaking in their operations. If they are, then a Justice Department investigation needs to happen, and charges filed, and PROVEN in a court of law.

      Otherwise the President of the US, and the US Congress have no authority, and even giving them bail-out money in exchange for power was unconstitutional, and not in the enumerated powers of the US constitution.

      The US Government has FORCED TARP money onto Wells Fargo, and forced "stimulus bill" money onto every state, regardless of State Governor's wishes, in Louisiana and Texas, as well as others.

      Who are they going to FORCE their money onto, and therefore their influence into next? Maybe your business...

      This is tyranny, bald faced and open.

      It is GM's business to do, or not do, and their business to fail or succeed at. Not the Government's, in any constitutional manner, and I emplore someone to show me where the US Constitution shows an enumerated power for the branches of government to do what they are doing. You can't because it doesn't.
        • 6 Years Ago
        @Mark K.

        Capitalism, like a Republic, is the worst form of an economy, or a government, respectively, EXCEPT FOR ALL THE OTHERS.

        Winston Churchill said that about government, and I figure it works for economics, as well.

        Capitalism may not work perfectly, but it is a WORLD better than Socialism. And killing a dictator? Talk to the subjects of Stalin, Mao, Pol Pot, Hitler, Chavez, Hussein, Castro, and all the other totalitarians in history. Bloody revolution is not a valid system of succession of power.

        And @ Red,

        I have no idea how you could be more insulting to the blood spilled for the freedom of this country than to say that the US Constitution is only a piece of paper, and a contract to be re-negotiated at will. That comment is DISGUSTING, and it raises questions about your character.

        We are not talking about the rightful methods of the people to amend their constitution by the prescribed democratic methods.

        We are talking about the government that is instituted, and LIMITED by the US Constitution, something bought with the blood and honor of better men than me or you, and that government trampling that underfoot and breaking it because they want power and control.

        Are you going to like it when they re-negotiate their arrangement with you? When they want to take YOUR property, liberty, or even your life?

        Think that can't happen? READ HISTORY. And refer to the list of tyrants above. They all started small somewhere.
        • 6 Years Ago
        "Not the Government's, in any constitutional manner, and I emplore someone to show me where the US Constitution shows an enumerated power for the branches of government to do what they are doing. You can't because it doesn't."

        The United States Constitution is a piece of paper; a contract. Basic rule of business:

        ...Contracts can and will be renegotiated...
        • 6 Years Ago
        Boxer fanatic:

        "The SHAREHOLDERS BOUGHT SHARES, and they bought their right to vote in the company. The company is not a public entity in respect to government, it is only publicly available for sale of shares."

        When socialism idea started, it started with premise that workers were alienated from the means of production which were owned by capitalists. To change that situation and establish socialism it was necessary for workers to enter in the posession of the means of production. That, by reciprocity, meant that now capitalists were alienated from their capital and had no control over it.

        In a textbook-typical large American corporation there are various levels of control and decision-making. CEO is usually on the top of decision-making process and is controlled by Board of Directors who, in their turn, answer to Shareholders Assembly. Everything is still beautiful and functional, right? Picture-perfect capitalism. Except for the fact that most Shareholders with a voice in the Assembly own company's stock that was NOT bought with their own money. There's plenty of funds managing your 401k, IRAs, savings funds ... etc as major Shareholders with voting rights in those companies. Now we have a situation where CEO doesn't necessarily own any company stock and his reward is fixed by contract regardless of performance, Board of Directors that controls CEO performance are appointed by Shareholders and neither of them have any money directly invested in the company - these are the people playing with somebody's money and those somebodys have no saying in what is going to happen to their investment/money. That pretty much sums up a situation where a capitalist is alienated from his/her capital and, therefore, means of production have been seized by workers/employees - yes, no matter how many millions they take home, they are still employees. And THAT, whether you like it or not, is socialism by definition. So now you can leave Obama, Bush, Democrats and Republicans alone, because the only true enabler of this destructive socialism in this country is (cue in mirror-like piece of PVC that appeared on the front page of Times magazine) ... YOU.

        To fix that, invest only in things where you have final saying what is happening to your investment. Of course, in order to do that, you also have to understand what are you investing in. Just these two conditions would wipe out major part of publicly owned companies with 3 or more buffer zones between capitalist and his/her capital, stop the socialism and make sure we have healthy and prosperous economy back.

        And if it takes a tyrant to do so, I'm fine with it. You know why? Because you can kill a tyrant and people's mentality changes in a year. Once you have socialism, and people not only accept it but are acting as enablers of it, then there's no way out of it.
        • 6 Years Ago
        @Mark K. - well said. Very well said.
      • 6 Years Ago
      TTAC call them, board of bystanders
      • 6 Years Ago
      DON'T Dump Pontiac! or Kill the G8 ! and continue with RWD

      Dump the Overpaid CEO's and Design Teams thhat ignored this ICON Auto line and yet got paid 6 digit salaries and bonus' for NOT doing their jobs the last 8 years!

      Pontiac is equally as important of an automobile line as is Chevrolet., if not dramatically more so... Look at the numerous similarities. Trans Am-Camaro, LeMans-GTO compared to Chevelle-Chevelle SS, Impala-Bonneville, etc.. Pontiac as well as Chevrolet began in the late 50's and early 60's with Direct from the Factory Street Legal Drag Strip Cars..

      Did Cadillac or Buick accomplish this? NOT ! !

      YES, Pontiac did build and can build EXCITEMENT ! Pontiac was the car that brought the TRI POWER ENGINES , the Powerful 421 Racing Super Duty Engines....and then the WIDE TRACK SYSTEM and RADIAL TUNED SUSPENSION... to the American Auto Industry...

      Question ? Do you thing Richard Petty would have driven a 4 cylinder Cobalt In the Daytona 500??

      And is a Cobalt just built on the unused frames left over from the embrassing Chevy Vega...the cars nearly look the same !

      Pontiac was the KING of the Drag Strips ..

      Remember 1963 to 1968 and Arnie "the Farmer" Beswick???? He wasn't driving a Saab or a Saturn.... HE was in A PONTIAC TEMPEST, THEN A PONTIAC LEMANS AND "THEN" A PONTIAC GTO...and breaking records everywhere, and bringing National Recognition to the entire Pontiac Motor Divison....

      SALES WERE THROUGH THE ROOF..

      (did ya get the message yet- MARKETING?)

      Another famous racer car driver, Ace Wilson raced 66 and 67 Pontiac GTO's at hundreds of drag strips all over the United States and again brought industry and nation wide recognition to Pontiac...

      PONTIAC was one of the most dominating and feared leaders in NASCAR for over 14 years..NOW it is TOYOTA ???
      Who fell asleep on Turn # 3.....????

      Pontiac has had and CAN HAVE awesome cars that compete with Infinity, Acura, BMW, Lexus, Audi...and Toyota.

      PONTIAC MOTOR DIVISION...Start earning your pay and refresh the CORRECT CLONE to the GTO, The TRANS AM...and cars like that....because the European Car Companies are taking your market share in numerous ways and in these specific performance areas and having GM for LUNCH.....

      GM has NOTHING to compete in these sport car or performance car lines......

      Maybe you haven't noticed but not many people, especially in this economy have $90,000 plus for a New Corvette...talk about a limited field of buyers...are you trying to sink that line also???

      If you think I am wrong...????

      Ask yourself this question??????

      DO you see BMW, Audi, Infinity, Lexus, Acura,or Toyota ...FILING FOR BANKRUPTCY?????
      DON'T THINK SO !

      And Notice....they ( see above ) don't build the same truck 3 times and yet disguise it with THREE DIFFERENT NAME BADGES..... who do you think you fooling?????

      Please stop insulting the Truck buyer...they are ALL THE SAME TRUCK!

      Come on GM ! !

      Do you really continue to humiliate the American Truck Buyers?

      A Cadillac Escalade and PICKUP???
      Are just Chevrolet Trucks with a CROWN and in a WREATH !

      BUT they cost 25-35% more than the Chevrolet Truck !

      If you want a truck.. BUY A REAL ONE !

      GM has pressed the Xerox button and triplicated the truck line in GM, Chevy and Cadillac..for the last 8 years.. and who gets paid to be in a rut???

      OH! .....GM Designers and Admin.! !

      What are the Chevrolet Aveo and the Cobalt?? ......A Yugo with A Bow Tile ! Badge??

      IMPALA.. Boring, MALIBU.. Yawn! .. But what about the Years of Bonneville 1957 til 2005 and the new G8 is AWESOME....

      The G8 does not at all fall into AARP edition of the present GM Product Offering-Embrassment..! !

      COME ON PONTIAC...

      Get your heads out of YOUR TRUNKS.!

      The performance cars from Europe are SMOKING YOU.. cause you haven;t got anything in to HIGH GEAR that competed with their Performance Line Ups...

      .. Keep the G8, Bring back the Grand Prix ( by the way it was a 2dr, til someone got lazy in Detroit).

      Show us a Hot, I said Hot G6 , bring back the Trans Am...

      WOW..you can copy the 2010 Camaro.. that should be easy to for you to do...your already doing it in the truck lines!!

      If PONTIAC GOES... the GM intials will stand for

      GENERALLY MONOTONOUS !

      which is a direct route, still headed for BANKRUPTCY

      GM talks about rebuilding the auto industry, one of the backbones of AMERICA...

      Then this contridiction comes along and they actually consider KILLING one of the most historical lines of the Car Indus
      • 6 Years Ago
      Can't wait to see how much the new board donated to the Obama campaign.

      Tea Party 2009!
        • 6 Years Ago
        Agreed with this. Remove the old, install pro-Obama lackeys, and there you go... Government Motors is closer than ever.

        FSM... it's not about "you Republicans...", nor is it that the board is being replaced, per say. It is about "how" it is happening. Today, the CEO and board of GM, tomorrow it will be what you and your family can do, say, read, study, enjoy, earn, worship, etc. Don't think this can happen? Time to read some history. Get a clue!
      • 6 Years Ago
      EVERY loan comes with conditions.
        • 6 Years Ago
        A loan made by an institution that doesn't have the authority to make loans. The banks that make that their business wouldn't touch GM with a 40 foot pole, because they KNOW the credit risk, and they know GM's score. That is what they do. And in the private sector, that is what they SHOULD do.

        The Government screws that around when they influence and intimidate banks, via Fannie Mae and Freddie Mac, and legal regulation, to flout banks ability to discern credit risk, for the sake of political correctness and expediency, and then regulate how they report those questionable assets. Bankers can be stupid, but Congress has a thicker track record for it, and caused the bank problem by it.

        So after Congress screwed the banking and housing industries, it seems like a good idea that they manage the auto industry, and keep growing beyond that, as well? These people aren't your friends, nor are they concerned with your well being, aside from getting your vote, and therefore more power, so really they are concerned for themselves most of all.

        The government has no right to steal from Peter Taxpayer, to give to Paul Businessman (any business), and then dictate terms, and fire Paul Businessman, anyway.

        There is no enumerated power that gives them the right to re-distribute wealth, or manage private enterprise.

        The fact that they do it with multiple industries does not in anyway make it right. Only worse and more invasive.
      • 6 Years Ago
      I think Jefferson and Washington would likely be horrified if they saw all this.
        • 6 Years Ago
        They would question the very core of why they fought a revolution.

        I now wonder if the principles they fought for and instituted are salvageable at this point, or if it is too far gone.

        Maybe the only thing that will teach people what they have forgotten, is true oppression and hardship, which is the consequence of what is happening in our country.

        The warnings are being given to avoid it, and nip it in the bud now. That is happening across this country this very day. It is only too late if people don't heed the warnings.
      • 6 Years Ago
      Regardless if some cry babies out there want to cry foul, scream ..etc etc This Had To Happen.

      Everyone knew this was going to happen sooner or later. I myself, as well as others, have been saying for year that if GM wants a fresh new take on the automotive industry and to become fiercely competitive to the foreign competition then they seriously need to start by replacing the tired and incompetent head decision makers with a fresh new breed of business minded people who are actually "with the times" and not stuck on focusing only on the muscle car past, trucks, and SUV's. They badly needed new management that had a fresh take on competition, marketing, quality control, research and development, and designing. Seriously speaking the service department should NOT be the major profit generator of a car company. That's just wrong and very poor customer service.

      It's a new world and many times it has been proven that the old ways of business just is not compatible with today's business standards. I know this because I own a small business and I make it an effort to always research and reinnovate in order to not fall behind my competition, even if it means reinventing new business strategies.

      GM for far too long have been sitting on their hands allowing the competition to pass them by, even their euro partners have better designed, yes better quality, and better customer satisfaction than the American division. GM most certainly did not get in this huge because someone way back then started spreading statements like "the Japanese are better" it has more to do with several years of bad business decisions after another, mixed with bad business practices.

      I am definitely all for the new blood in GM because frankly I don't want to see another Enron size disaster where the rich CEO's and other management walk away with their millions of ill gotten gains from GM while washing their hands clean from the company, meanwhile the blue collar workers getting the crankshaft (no pun intended) in the rear end.
      logan
      • 6 Years Ago
      I agree that this needed to happen, it definately did, but it's not Obama's decision!!!!
        • 6 Years Ago
        @logan
        I could not agree more! Dangerous precedent.
      • 6 Years Ago
      There are a good number of reasons why some board members could or should be changed (but not by government mandate) but the reason provided:

      "Kresa said that while the board did achieve "historic things" recently, like renegotiating the UAW pay scale, he also said that the board didn't fully comprehend the magnitude of the downturn."

      WTF? Who exactly did see the magnitude of the downturn? Toyota? NO. Honda? NO. Any of the European OEM's? NO again - and don't repeat the useless drivel that they didn't ask for a government loan - that is not the point here, but most of the other OEM's are and have continued to receive support in various ways from their home countries.

      • 6 Years Ago
      I know what you guys are saying, but this needed to happen. Otherwise it would've been another case of failed management that walked away rich and the average Joe gets the shaft...although...this will still probably be the case...
      • 6 Years Ago
      U.S.S.A
        logan
        • 6 Years Ago
        Yep...
        • 6 Years Ago
        Maybe the entire board of directors needs to be replaced.

        If they "couldn't understand the magnitude of the (industry) downtown" wrt the auto industry, they shouldn't have been then to begin with. Did they understand how the economic downturn would hurt the respective corporations they run themselves? Probably so.

        It's unacceptable, even for a consumer, to know that GM is run by directors that don't understand the business or how the car industry would be hurt if other sects face drastic financial losses too.

        Just like Rick Wagoner, the existing board members are "Captains of Industry", and are expected to know how to keep the company they head afloat in tough times. Right now, they're basically soaking up funds that could be used elsewhere. Replace as many as possible.
        • 6 Years Ago
        you start with the top and work your way down... thats how all dictators and regimes are taken down... why not use the strong arm of the government to do the same to a company? Obama is a smart dictator...
        • 6 Years Ago
        i was hoping someone would say something like this! just watch the video and dont try to say these are not facts.
        http://www.youtube.com/watch?v=sawN7uJ8s8s

        do you know how to operate and budget you life? or do you think the government can do a better job for you? i think someone is trying to play god. he cant run these companies the people he is firing can and have. if you like cool cars like the corvette and especially the new camaro thank Bob lutz and Rick Wagner because they are responsible for the products. GM is a changing company look at its products and tell me they are not on the right path.

        big ship takes longer to turn my friend.


        • 6 Years Ago
        Obama should have asked the union management to step down ,but He didn't because they're His goons.
        • 6 Years Ago
        I can give some valuable insight on the new chairman of the board,kent kresa.he is a very polished businessman frommy former employer northrop corporation. he is the perfect person to take a giant like general motors and in time turn it into a very profitable corporation.in 1991, i was working at northrop and our corporation was dying along with the other twenty four corporations in los angeles county. he then declared war,using his talents to buy up other failing corporations, hiring some of the twenty four admirals, generals that had stepped down from the clinton administration along with a few politicians that werevoted out of office, using the newly acquired businesses through friendly or non friendly means, made some new deals with house of representatives to slowly bring the corporation back from a five billion corporation to the present twenty eight billion dollar corporation, the 911 attack brought himto the white house to bring the new technologies for global tracking with the new homeland security agency
        • 6 Years Ago
        You right wingers and your cries of communism are hilarious. I will never understand the constant need for your desire to defend the actions of corporate America to the bitter end. Regardless of what they do, you will never speak ill of them. Board of trustees are some of the most inbred parts of corporate America. They are usually comprised of CEO's and other higher ups from other companies. When it comes time to vote for executive pay raises, bonuses, and golden parachutes, they will always crank the values of these packages up, because it is very likely that those same people are on their board of trustees. They wouldn't want to set the dangerous precedent of lowering pay to CEO's and have it come to bite them in the butt down the line. The fact of the matter remains that THESE COMPANIES BEGGED OUR GOVERNMENT FOR MONEY. As a taxpayer I DON"T WANT IT TO BE WITHOUT STRINGS ATTACHED. I FEEL OUR FEDERAL GOVERNMENT HAS THE RIGHT TO DO ANYTHING THEY WANT TO A COMPANY THAT THEY ARE THE MAJORITY STAKEHOLDERS IN. Get over your cries of socialism and go play Boston tea party with the rest of your playmates.
      • 6 Years Ago
      I think the fact that the upper management listed signing that union contract as a good thing, tells you they are totally in a disconnect with the gravity of the situation.
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