The GMS Defiance

by Johnny Debacle

Mr. Wagoner was greeted with a standing ovation, according to people at the meeting. Employees said they were proud of Mr. Wagoner for defying calls for resignation and insisting the company would not file for bankruptcy protection. Yet at the same time, his resignation Sunday in exchange for financing needed to save the auto maker was characteristic of his devotion to the company he’d joined after graduating from Harvard Business School in 1977.

I find it difficult to reconcile the above with the below.

I hate to be objective and even somewhat supportive of what I see as frightening interventionalism by the Government, but Wagoner simply did not get the job done and has created a large enough sample size of performance for this to be clear. He, like Walter Noel, may have been a great guy, a veritable Jimmy Stewart reborn or Jesus back on Earth, but at his job as CEO of GM he failed and that is the way in which he matters. Not only that, but if you were to overlay a graph of his personal net worth over that chart of GM’s stock price, I bet they would demonstrate a negative correlation. And he should have some humility given that he was ever even named CEO because of how he was named at birth — namism at its worst.

Recommendation: I like defiance, and not just as the name of a battleship. I like the principle of not giving in, of fighting until you die, of righting the unrightable wrong, of marching into Hell for a heavenly cause. But let’s save the celebration for meritorious defiance, like General Anthony McAuliffe or Winston Churchill, as opposed to pridefully clinging to your job or refusing to file a company who could benefit from it.

Related Reseach:

Ad Sense Ad Sense


  1. Straight Cash Homie
    March 30th, 2009 | 10:38 am

    Why wouldn’t the employee’s give this guy a rousing sendoff in support? Despite all economic realities that their socialized healthcare and pension systems were completely unaffordable he would not take them away. Bankruptcy would have wiped out the healthcare costs since there are no federal laws protecting healthcare promises as their are ERISA DB plans and even those can be scaled back to some degree. Why wouldn’t they support a man that said we have to change but the American tax payers should bear a huge amount of that cost rather than it being the responsibility of those directly involved with the entity (equity holders, bond holders, managment, works both active and retired). As a line worker why wouldn’t you want to support the man who fought to preserve the UAW way of life as best he could?
    Larger note: Why all 3 didn’t capitalize on the economic times to file chapter 13 and restructure while forcing open their UAW CBA’s at the same time to shed insane benefits like: free healthcare for life, pensions that rival the Boston PD and FD (as you may already know they have been put into review by the FBI for retire fraud), jobs banks (gone now but should have been gone a long time ago), contracts that prevent plant modernization “at the expense of headcount on the line (that is the point of modernization!), non-competitive wages (far to high for their jobs, new UAW workers get about $14 an hour but if you were hired 6 months ago were talking $30 + an hour for the same job.), and the list keep going (30 year rule: work 30 years and you can retire, get full healthcare for life and draw on your pension immediately. So screw college and start on the line full time at 18 your retired at 48.)

  2. March 30th, 2009 | 10:55 pm

    @ SCH

    How DARE you quote your fancy “facts” and “figures”?!?!

    The problem, as it is with most things, is that those of us who understand basic concepts – like “arithmetic,” for example – are far, far outnumbered by those who do not, despite the fact that many reasonably intelligent people (who should (have) known better) control large sums of money (read: power and influence).

    Thankfully, I have THE solution to end all solutions:

    We will do a hostile takeover (I hear some Government “employees” in the Middle East will soon be available to help) of automation company ABB (and part of Siemens, while we’re at it).

    We will then destroy the robots that build the robots that build cars, and replace them with unemployed American autoworkers. Then, these new robotworkers will use their vast experience and skill to produce robots that will in-turn finally enable GM and Chrysler to attain production efficiency.

    This will allow them to attain cost parity, if not cost dominance over the likes of their Asian (etc) competition, and regain the dominance they once knew (1/2 a century ago).

    I’ve completed an intense diligence process on this admittedly controversial plan, and I have to admit, its perfect. I will, however, entertain suggestions from my esteemed and trusted colleagues (you know who you are).

  3. Pleb
    March 30th, 2009 | 11:17 pm

    This is about breaking down the system and redesigning man so he can achieve perfection. It’s a neo-marxist or Frankfurt School marxist thing. Ayn Rand explained why it’s going down this way, and her understanding of how a peaceful marxist revolution works pretty much squares with the Frankfurt School advocates’ understanding. Rand thought that the looters and victims need each others’ approval, at least initially, which I think explains why GM is trying to market an 8 cylinder 6500 pound hybrid SUV, why financial execs in Connecticut are still holding mega expensive fundraisers for Chris Dodd, and why the looters insisted that unwilling recipients take TARP money and keep talking about the govt/bidness relationship as if they were on equal footing. The looters either need political cover, and they need the assent of their victims, who have to start thinking themselves enemies of the people, and lucky to get away with only loosing their stuff.

    You guys really didn’t read any of the political philosophy books, didja? Aside from the political applications, I found out that marxist chicks generally reject conventional morality, so mere working knowledge of left wing revolutionary cant lets just about anybody pretend to be a super baller. You haven’t made it until you’ve made it with a German communist chick.

  4. March 31st, 2009 | 8:25 am

    @ Pleb

    I read the political philosophy, forgot most of it, but somehow methinks Locke and Rousseau would have some interesting things to say about our current situation and how the gub’ment is going about dealing with it. Ya’ know, this whole “greater good” nonsense and all…

  5. Pleb
    March 31st, 2009 | 11:27 am

    The greater good, eh? Sounds like a term some guilty feeling person would use to try to justify an armed robbery or an arson.

    Not sure what Locke would have said but I’m pretty confident that Rousseau would have encouraged us to walk around naked having a lot of sex. It’s great advice but you may need to make your female associates sign waivers first before you try anything.

  6. March 31st, 2009 | 2:36 pm

    @ Pleb

    If Rousseau had his way and walked around say Times Square, he’d reverse his position (no pun intended) quite rapidly.

    I’d imagine Locke would take issue with the irresponsible behavior and entitlement mentality that has gripped our country. The ideas of the social contract, of private property, contracts and the like seem to be more or less absent from the minds of most Americans (mostly our elected officials), but now we’re really getting off on a tangent…

  7. April 1st, 2009 | 7:37 am

    I’m thinking Anal_yst used to be a German communist chick. Get a room, comrades.

  8. MGW
    April 1st, 2009 | 11:27 am

    I think you need to do a post on this. Short college educated women with lots of student loans. They are only trading assets since no man will ever acquire them since it would require an enormous assumption of debt. It’s quite possible that a TV production assistant with $100k+ of debt has a negative DCF value.

  9. american bandersnatch
    April 1st, 2009 | 12:39 pm

    @ MGW:
    Highly leveraged, low earnings potential, not very smart and wants pity and other people’s money. Clearly she’s a toxic asset and any transactions with her should be on a non-recourse basis.

  10. April 1st, 2009 | 12:48 pm

    @ MGW

    That little “poor me” piece wasn’t bad until she repeated Jackson’s plan (“Banks can borrow at 1%, so students should be able to borrow at the same rate…” wtf?!?!) and in closing, asked:

    “I chose to go to a private school and I chose to work in a field where the starting salaries are low. Does that mean that I chose to live a life of struggle, wondering how I am going to pay my rent, afford the basics of living and still stay in my chosen career field…all while putting up with high interest rates and an amount of debt that brings me to tears?”

    The answer is a definitive “YES!”

    Reality sucks sweetheart, and unless you’re born into the lucky sperm trust fund club you can’t just pick an expensive school and a “fun” career and expect to live in the lap of luxury. If she’d stuck with the initial slant the piece would be ok, yea, tuition is way too expensive, student loans need to be addressed at the highest level, but you, my dear, are part of the problem, not the solution.

  11. MGW
    April 1st, 2009 | 5:00 pm

    @ American Bandersnatch

    I suspect that she would welcome classification as a toxic asset since that would likely result in the same type of bailout that the banks are getting (though I’m not sure where she got 1%, I thought the TARP was at 5%).

    @ Anal_yst

    I agree that the article may have had a bit of promise, but from the beginning she starts to work in her responsibility dodging ways.

    Bottom line, education is an investment just like any other. You shouldn’t pay more for it than the discounted value of your expected future earnings and your expected future feelings of moral superiority (after all, isn’t that why she’s a journalism major who went to a private school in New York?).

  12. Melissa Lee
    April 1st, 2009 | 11:27 pm

    Longs are excited about Melissa Lee taking over at _Fast Money_.

  13. The Dryer
    April 2nd, 2009 | 11:25 am

    @ All’ya’ll
    These discussion posts are all too long. Short long posts and long pithy posts.

  14. Pleb
    April 2nd, 2009 | 1:51 pm

    >>>>Highly leveraged, low earnings potential, not very smart and wants pity and other people’s money.

    Other than the “low earnings potential” that describes a hell of a lot of “smartest guy in the room” types who shoulda gone to a second tier SUNY school.