GM CEO Wagoner forced out as part of gov't plan

Financial Crisis Posted on

Time and time again, General Motors Corp.'s board of directors reaffirmed its support for Chairman and CEO Rick Wagoner, even as the company piled up billions of dollars in losses and begged for government loans to stay alive.


But Wagoner is now a high-profile casualty of government intervention, forced out as part of the Obama administration's sweeping last-ditch effort to save the century-old auto giant.

Wagoner, 56, who spent 32 years with GM working all over the world, stepped down effective immediately, the company said in a statement early Monday. He was replaced as CEO by Fritz Henderson, the company's vice chairman and chief operating officer.

GM board member Kent Kresa, a former chairman and CEO of Northrop Grumman Corp., was named interim chairman and said new directors will make up the majority of GM's board when a new slate is nominated for election at the company's annual meeting in August.

"The board has recognized for some time that the company's restructuring will likely cause a significant change in the stockholders of the company and create the need for new directors with additional skills and experience," Kresa said in a written statement.

GM shares tumbled 96 cents, or 26.5 percent, to $2.66 in morning trading Monday. That is down 89 percent from their 52-week high of $24.24 on April 30, 2008.

The management shake-up, according to several industry analysts, shows that the administration is serious about forcing GM to change more quickly and dramatically than it did during Wagoner's nearly nine-year tenure as CEO.

Jeremy Anwyl, chief executive of the automotive Web site Edmunds.com, called the move "political theater" to appease an increasingly bailout-weary public.

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