As chairman and chief executive of General Motors, Rick Wagoner is in the driver's seat of the world's largest automaker. And the road ahead has become very slippery.
GM lost more than a billion dollars in the first 3 months of this year. Soaring gas prices have driven customers away from its most profitable products--the bigger SUVs.
Last week, at the company's annual meeting — in Wilmington, Delaware, where shareholders came to elect a board of directors. Wagoner had to answer for what he called "the sudden downturn in our performance here in North America."
And some shareholders let him have it.
"This company's sick," said Jim Dollinger, a Buick salesman from Flint, Michigan, who was nominated to the board by another shareholder. "I'm going to give you the ten reasons, Mr. Wagoner, why I believe you should step down as chairman."
And John Love compared the company to a sinking ship. "The Titanic ship sank because the directors ignored the warnings," He said.
Conspicuously absent from this annual meeting was one of GM's largest shareholders--a billionaire with a history of launching hostile takeovers. Kirk Kerkorian, who tried to take control of Chrysler in the mid 90's, recently has bought up more than 7% of General Motors stock.
"This doesn't look like a takeover attempt at this point, but it's real clear that he wants to increase his value, which means things are going to have to change," said Ed Lapham, editor of Automotive News.
Last week Wagoner announced sweeping changes. Over the next four years, GM will reduce its hourly workforce by more than 20%. That's 25,000 workers. It also will close an unspecified number of plants.
GM already had idled three plants this spring, including one in Linden, New Jersey, where George Hall, and Kathy and Ken Tirpak worked for most of their lives.