Worth Saving?

Rick Wagoner should hold his head high. He's a good man, and quality leader who gave 30 years of his life to GM. News of his "resignation" yesterday is a joke. He has been sacrificed by Obama.

First, realize that there is not a person alive who could have made anything better for GM at this point in history. Worse, yes (if they could be any worse off), but not better.

In very simple terms, the past has finally caught up with GM. There was serious action that needed to be taken, back about the time Wagoner started with the company. This was during GM's highpoint. But even then they could see many threats on the horizon: fuel shortages, health care costs, globalization of manufacturing, fickle consumers, and skyrocketing pension liability, just to name the biggies. But there were thousands of heads in the sand. Management, labor, board members, and shareholders were all committed to protecting their own pile of gold, as if it could never run out. They saw these threats, but if there were any enlightened leaders among them who were prepared to talk about sacrifice for the future, they were quickly shouted down. It's a classic case of short-sighted greed by everyone one of these pillars that hold the company up.

GM was at the tipping point, finally, in 2008, and all it took was this latest recession to bring it all down. Make no mistake, it had to happen. It was only a matter of time, and GM had just about run out of time anyway.

So here we are, and for right or wrong, the government appears to want to prop GM up. Keep them on life support. No one knows for how long. But it's throwing good money after bad if there aren't drastic changes there. And Rick Wagoner isn't what I'm talking about. That's just more Obama symbolism. More fluff which he is so good at. It accomplishes nothing. He just needs to show how tough he is, especially after his AIG fiasco. And he needs to pacify his labor friends at the UAW.

Basically the company needs to shrink in all areas to match it's market share and sales. The trendy word is "right-sizing". The only thing it should have is Chevy, Cadillac and GMC truck. The basic platforms needed to cover the market from an entry level Cobalt to an ultra-luxury Cadillac XLR. And you must have trucks of course, so give it all to the GMC brand.

Next you need to cut dealer locations by 60% or 70% percent. That would put them on par with Toyota, who still sells more cars out of that number of outlets.

Hourly labor needs to be capped at about $20/hr. Entry level is $12.

Health care needs to be slashed to basic levels only. HMO style. Anything additional is totally up to a direct employee contribution basis. No retirement health care at all.

Pension and retirement plans need to also be slashed. Present and future. Not 10%. More like 75%.

Management bonuses gone. Salaries brought into line. And this needs to be focused on the Director-level, where there are way too many $250K per year jobs. Of course, the deletion of 6 or 7 brands will make this much easier.

That's the basics in my opinion. Any less, and Obama's throwing money down a hole, and putting off an inevitable liquidation.

This is what years of neglect have driven GM to. The work would have been so much easier and less painful had it started in the 1970's, with just a little bite at a time. But back then, the American consumer wanted GM around, and if that's not true anymore, than there's nothing worth saving. Ultimately, it's really up to them, isn't it?