Rick Wagoner
Encyclopedia
George Richard "Rick" Wagoner, Jr. (born February 9, 1953) is an American businessman and former Chairman
and Chief Executive Officer
of General Motors. Wagoner resigned as Chairman and CEO at General Motors
on March 29, 2009, at the request of the White House
. The latter part of Wagoner's tenure as CEO of General Motors found him under heavy criticism as the market valuation of GM went down by more than 90% and the company losing more than $82 billion USD. This led to his being named one of the worst CEOs of 2008.
and grew up in Richmond, Virginia
. He graduated from John Randolph Tucker High School
there, where he was named "Best All Around" student in his graduating class. He received a B.A.
in Economics
from Duke University
in 1975. He then attended Harvard Business School
, from which he received an MBA in 1977. He is married and has three adult sons.
While at Duke, he became a member of the Delta Tau Delta
Fraternity. Wagoner is a member of the boards of trustees of Duke University
, Detroit Country Day School
, the Board of Dean's Advisors of the Harvard Business School
, and the Board of Directors of Catalyst. He is a member of The Business Council, The Business Roundtable, Detroit Renaissance Executive Committee, and the Secretary of Energy Advisory Board.
subsidiary and later served as managing director.
In 1992, he was named GM's chief financial officer, in 1994 he became executive vice president and/or president of North American Operations, and in 1998 he was named president and chief operating officer.
After GM lost $30 billion during a single three-year stretch in the early 1990s, Wagoner and Chairman John F. "Jack" Smith Jr.
forced GM "back to basics" to battle "30 years of management mistakes" that left him with little room to maneuver.
As CEO, Wagoner focused on highly profitable but fuel guzzling sport utility vehicle
s and light truck
s. In an interview, Wagoner stated that the worst decision of his tenure at GM was "axing the EV1
electric-car
program and not putting the right resources into hybrids
. "It didn’t affect profitability," Wagoner claimed, "but it did affect image".
In April 2005 Wagoner took back personal control of GM's North American car division in light of its poor performance. In early June 2005 Wagoner announced that GM in the United States would close several plants and shed 25,000 employees (17% of GM's U.S. workforce) by 2008. The cuts will result in GM production reducing output by one million cars and trucks (from 6 million to 5 million).
In the Automotive industry crisis of 2008–2009
, Wagoner came under renewed pressure as GM sought financial support from the U.S. government in an attempt to avoid bankruptcy. During the latter half of 2008, Wagoner and GM maintained that bankruptcy was "not an option that GM is considering," despite rapidly running out of capital. This stance was called "presumptuous" by some observers. Within 9 months, GM was to declare bankruptcy.
During hearings for government loans to the Big Three Automakers, Wagoner, Alan Mulally
and Robert Nardelli
were criticized for flying to Washington, D.C. in corporate jets. For a subsequent meeting, the three CEOs drove from Detroit to Washington by hybrid cars.
The BBC reported that Wagoner was popular among GM employees and reporters. However, it cites that he lacked the "ruthless streak needed to make the tough decisions required to bring GM back from the brink of bankruptcy." While analysts have praised Wagoner for operational improvements, cost cutting moves and the appointment of Bob Lutz to oversee product execution, others criticized him for his incremental approach to change, largely as he resisted making the drastic cuts demanded by that of the market and US government. Throughout the first months of 2009, Wagoner argued that a bankruptcy would be more costly than a government bailout. However, there remained lingering doubts that he was implementing the restructuring moves necessary to remain viable in the future without further government loans.
On March 29, 2009, Wagoner agreed to immediately resign his position as GM Chairman and CEO, as part of the Obama administration deal to provide GM with further short-term financing. The following day, the US government rejected GM's initial restructuring plan and gave the company 60 days to come with new proposal or be forced into bankruptcy. He was replaced as CEO by Fritz Henderson, who had been serving as GM's President and Chief Operating Officer.
Chairman of the Board
The Chairman of the Board is a seat of office in an organization, especially of corporations.Chairman of the Board may also refer to:*Chairman of the Board , a 1998 film*Chairmen of the Board , a 1970s American soul music group...
and Chief Executive Officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of General Motors. Wagoner resigned as Chairman and CEO at General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
on March 29, 2009, at the request of the White House
White House
The White House is the official residence and principal workplace of the president of the United States. Located at 1600 Pennsylvania Avenue NW in Washington, D.C., the house was designed by Irish-born James Hoban, and built between 1792 and 1800 of white-painted Aquia sandstone in the Neoclassical...
. The latter part of Wagoner's tenure as CEO of General Motors found him under heavy criticism as the market valuation of GM went down by more than 90% and the company losing more than $82 billion USD. This led to his being named one of the worst CEOs of 2008.
Family and education
Wagoner was born in Wilmington, DelawareWilmington, Delaware
Wilmington is the largest city in the state of Delaware, United States, and is located at the confluence of the Christina River and Brandywine Creek, near where the Christina flows into the Delaware River. It is the county seat of New Castle County and one of the major cities in the Delaware Valley...
and grew up in Richmond, Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
. He graduated from John Randolph Tucker High School
John Randolph Tucker High School
John Randolph Tucker High School is a high school in Henrico County, Virginia, United States. It is named after lawyer and Henrico County Judge John Randolph Tucker. Its students and faculty often refer to themselves as "Tucker Tigers"...
there, where he was named "Best All Around" student in his graduating class. He received a B.A.
Bachelor of Arts
A Bachelor of Arts , from the Latin artium baccalaureus, is a bachelor's degree awarded for an undergraduate course or program in either the liberal arts, the sciences, or both...
in Economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
from Duke University
Duke University
Duke University is a private research university located in Durham, North Carolina, United States. Founded by Methodists and Quakers in the present day town of Trinity in 1838, the school moved to Durham in 1892. In 1924, tobacco industrialist James B...
in 1975. He then attended Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
, from which he received an MBA in 1977. He is married and has three adult sons.
While at Duke, he became a member of the Delta Tau Delta
Delta Tau Delta
Delta Tau Delta is a U.S.-based international secret letter college fraternity. Delta Tau Delta was founded in 1858 at Bethany College, Bethany, Virginia, . It currently has around 125 student chapters nationwide, as well as more than 25 regional alumni groups. Its national community service...
Fraternity. Wagoner is a member of the boards of trustees of Duke University
Duke University
Duke University is a private research university located in Durham, North Carolina, United States. Founded by Methodists and Quakers in the present day town of Trinity in 1838, the school moved to Durham in 1892. In 1924, tobacco industrialist James B...
, Detroit Country Day School
Detroit Country Day School
Detroit Country Day School is a private, secular school located in four campuses in Oakland County, Michigan, north of Detroit. The administrative offices, facility services, safety and security services, and the upper school are located in a campus in Beverly Hills, along with the middle school...
, the Board of Dean's Advisors of the Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
, and the Board of Directors of Catalyst. He is a member of The Business Council, The Business Roundtable, Detroit Renaissance Executive Committee, and the Secretary of Energy Advisory Board.
General Motors
After Harvard, he joined GM as an analyst in the treasurer's office. In 1981, he became treasurer of GM's BrazilBrazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
subsidiary and later served as managing director.
In 1992, he was named GM's chief financial officer, in 1994 he became executive vice president and/or president of North American Operations, and in 1998 he was named president and chief operating officer.
After GM lost $30 billion during a single three-year stretch in the early 1990s, Wagoner and Chairman John F. "Jack" Smith Jr.
John F. Smith, Jr.
John Francis "Jack" Smith, Jr. is the non-executive chairman of the board of directors of Delta Air Lines. Smith has been a member of Delta's board of directors since 2000....
forced GM "back to basics" to battle "30 years of management mistakes" that left him with little room to maneuver.
Chief Executive Officer
Wagoner became president and chief executive officer in June 2000 and was elected chairman on May 1, 2003. Under his leadership, GM suffered more than $85 billion in losses.As CEO, Wagoner focused on highly profitable but fuel guzzling sport utility vehicle
Sport utility vehicle
A sport utility vehicle is a generic marketing term for a vehicle similar to a station wagon, but built on a light-truck chassis. It is usually equipped with four-wheel drive for on- or off-road ability, and with some pretension or ability to be used as an off-road vehicle. Not all four-wheel...
s and light truck
Light truck
Light truck or light duty truck is a U.S. classification for trucks or truck-based vehicles with a payload capacity of less than 4,000 pounds...
s. In an interview, Wagoner stated that the worst decision of his tenure at GM was "axing the EV1
General Motors EV1
The General Motors EV1 was an electric car produced and leased by the General Motors Corporation from 1996 to 1999. It was the first mass-produced and purpose-designed electric vehicle of the modern era from a major automaker, and the first GM car designed to be an electric vehicle from the...
electric-car
Electric vehicle
An electric vehicle , also referred to as an electric drive vehicle, uses one or more electric motors or traction motors for propulsion...
program and not putting the right resources into hybrids
Hybrid vehicle
A hybrid vehicle is a vehicle that uses two or more distinct power sources to move the vehicle. The term most commonly refers to hybrid electric vehicles , which combine an internal combustion engine and one or more electric motors.-Power:...
. "It didn’t affect profitability," Wagoner claimed, "but it did affect image".
In April 2005 Wagoner took back personal control of GM's North American car division in light of its poor performance. In early June 2005 Wagoner announced that GM in the United States would close several plants and shed 25,000 employees (17% of GM's U.S. workforce) by 2008. The cuts will result in GM production reducing output by one million cars and trucks (from 6 million to 5 million).
In the Automotive industry crisis of 2008–2009
Automotive industry crisis of 2008–2009
The automotive industry crisis of 2008–2010 was a part of a global financial downturn. The crisis affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry...
, Wagoner came under renewed pressure as GM sought financial support from the U.S. government in an attempt to avoid bankruptcy. During the latter half of 2008, Wagoner and GM maintained that bankruptcy was "not an option that GM is considering," despite rapidly running out of capital. This stance was called "presumptuous" by some observers. Within 9 months, GM was to declare bankruptcy.
During hearings for government loans to the Big Three Automakers, Wagoner, Alan Mulally
Alan Mulally
Alan Roger Mulally is an American engineer and business executive who is currently the President and Chief Executive Officer of the Ford Motor Company...
and Robert Nardelli
Robert Nardelli
Robert Louis "Bob" Nardelli was the chairman and chief executive officer of Chrysler. He had earlier served in a similar capacity at The Home Depot from December 2000 to January 2007. Prior to that, Nardelli had risen to become one of the top four executives at General Electric...
were criticized for flying to Washington, D.C. in corporate jets. For a subsequent meeting, the three CEOs drove from Detroit to Washington by hybrid cars.
The BBC reported that Wagoner was popular among GM employees and reporters. However, it cites that he lacked the "ruthless streak needed to make the tough decisions required to bring GM back from the brink of bankruptcy." While analysts have praised Wagoner for operational improvements, cost cutting moves and the appointment of Bob Lutz to oversee product execution, others criticized him for his incremental approach to change, largely as he resisted making the drastic cuts demanded by that of the market and US government. Throughout the first months of 2009, Wagoner argued that a bankruptcy would be more costly than a government bailout. However, there remained lingering doubts that he was implementing the restructuring moves necessary to remain viable in the future without further government loans.
On March 29, 2009, Wagoner agreed to immediately resign his position as GM Chairman and CEO, as part of the Obama administration deal to provide GM with further short-term financing. The following day, the US government rejected GM's initial restructuring plan and gave the company 60 days to come with new proposal or be forced into bankruptcy. He was replaced as CEO by Fritz Henderson, who had been serving as GM's President and Chief Operating Officer.
See also
- Bob Lutz
- Automotive industry crisis of 2008–2009Automotive industry crisis of 2008–2009The automotive industry crisis of 2008–2010 was a part of a global financial downturn. The crisis affected European and Asian automobile manufacturers, but it was primarily felt in the American automobile manufacturing industry...
- General Motors Chapter 11 reorganizationGeneral Motors Chapter 11 reorganizationThe General Motors Chapter 11 sale of the assets of automobile manufacturer General Motors and some of its subsidiaries was implemented through section 363 of Chapter 11, Title 11, United States Code in the United States Bankruptcy Court for the Southern District of New York...