Filed under: Management, General Motors (GM)

In June 2000, Richard Wagoner became president and CEO of General Motors Corporation (NYSE: GM) In case you haven’t been paying attention for the last eight years, here’s an overview of what’s gone down:

• GM paid huge dividends even as its pension and health care obligations spiraled out of control leaving the company in a precarious capital position.

• When SUVs started to get hot, GM essentially bet its future on the continuation of that trend and the reasonably low gas prices that made it possible. That’s right: GM was essentially an commodities speculation hedge fund masquerading as a car company. Now Bloomberg is reporting that GM lost $2 billion on leased SUVs.

• Now that gas is at $4 per gallon and M&A activity has dried up, GM has decided that this is a good time to try to sell its Hummer brand. Does it come with Pogs, Pokemon cards, and HD DVD?

• The stock was trading in the $60 per share range when Wagoner took the helm and now it’s fallen to $11.07 and Merrill Lynch is saying that a GM bankruptcy is “not impossible.” And remember: Merrill Lynch has been overly optimistic about its own ability to survive without raising capital. So “not impossible” may very well mean “quite possible.”

Given all that, I have a serious question for General Motors’ board of directors: How can Richard Wagoner possibly still be your CEO? Hypothetically, what would he have to do to get fired? Join Al Qaeda? In 2007, Wagoner took home $14,415,914, a 41% raise over 2006.

The fact that Carl Icahn isn’t filing a 13-D and raising hell is indicative of the fact that this is one company that’s probably too late for saving.

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This entry was posted on Sunday, August 3rd, 2008 at 11:19 am and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.