Push Comes to Shove; Wagoner is Out at GM

(MoneyWatch)  It was almost inevitable that GM Chairman and CEO Rick Wagoner would get the boot, as the Detroit Big Three's longest-serving chief executive, and with Congress and the Obama Administration demanding accountability.

"On Friday I was in Washington for a meeting with Administration officials. In the course of that meeting, they requested that I 'step aside' as CEO of GM, and so I have," Wagoner said today in a terse, written statement.

Wagoner's opposite numbers Alan Mulally at Ford, and Bob Nardelli at Chrysler, are relative newcomers. Mulally joined Ford from Boeing in September 2006. Nardelli joined Chrysler from The Home Depot in August 2007. That's not to say they're out of the woods yet, either.

But Wagoner started running GM North American Operations back in 1994. He was president and COO in 1998, and president and CEO since 2000. There was no way he could argue GM was someone else's mess. Wagoner was bound to end up in the hot seat, as I noted in this space in November 2008, and again in December.

It's interesting that Wagoner, 56, seemed to attribute his ouster solely to pressure from Washington. Publicly, the GM board has stubbornly stuck by Wagoner. However, Wagoner's dismissal more than ever makes it clear that the U.S. Treasury Department, and through it the Obama Administration, is in the driver's seat.

The future of GM and Chrysler are utterly dependent on continued U.S. government loans, which they first received at the tail end of 2008. Treasury is due to announce by tomorrow, March 31, whether to continue its support, although that deadline could be postponed.

But the timing of Wagoner's announcement strongly suggests that that the Administration made getting rid of Wagoner a priority. It also suggests that nothing else would have budged Wagoner.

The GM board today named Fritz Henderson, 50, as CEO. Since 2008, he has been president and COO, but he became best known nationally during a stint as vice chairman and CFO before that. Henderson has a reputation for speaking softly but carrying a big stick, as GM's chief cost-cutter.

The GM board also today appointed an outside director, Kent Kresa, as interim, non-executive chairman. Kresa is chairman emeritus of Northrop Grumman Corp. He has been a GM director since 2003.