Rick Wagoners Fatal Mistake-sopor aeternus

Justice Litle, Editorial Director, Taipan Publishing Group Poor Rick Wagoner. The long-time General Motors CEO finally got the boot this week. Some would say he deserved it (including us). But he could have hung on, if not for one fatal mistake… Whats good for General Motors is good for the country. Weve all heard that one, right? Its actually a misquote… one of those legendary quips that gets around because the modified version sounds better than the real thing. The actual source was Charles Erwin Wilson, head of GM in the early 1950s, during a question and answer session with the Senate Armed Services .mittee. The Senate wanted to know if Wilson would have any conflicts of interest upon taking a job as Eisenhowers secretary of defense. Would he, Charles Erwin Wilson, in his capacity as defense secretary, be willing to make a decision that could harm GM for the good of the country if need be? Wilson confirmed his willingness to put country first… and then added he could hardly imagine such a scenario .ing to pass. Thus came the famous (and oft misquoted) line: For years I thought what was good for our country was good for General Motors, and vice versa. The difference did not exist. Kicked to the Curb Wilson may have been correct at one time in his opinion that the difference did not exist, re, Americas interest versus GMs. But a difference sure exists now! It has be.e apparent, at least by Washingtons measure of things, that in order for America to rise up, GM has to go down. After months and months of socialism-lite and big business mollycoddling, the iron hand of discipline has finally made a showing. I mean really, you have to love the irony of this juxtaposition: On Friday, March 27, President Obama met with the nations top bankers including Ken Pig in a Poke Lewis, Vikram Bandit Pandit, and 13 others for a carefully orchestrated discussion. (All sides described the meeting as cordial according to the WSJ. ) On Sunday, March 29 less than 72 hours from the tough-love banker-fest Team Obama delivered the following loud-and-clear message to Rick Wagoner, the soon-to-be-ex General Motors CEO: Pack your bags, buddy boy, and dont let the door hit your a** on the way out! Hows that for a change in style and demeanor? You cant make this stuff up, folks… Jekyll and Hyde have nothing on this White House. Earlier this week, a Taipan Daily reader and VIP Inner Circle member suggested I should write Grisham-style novels about all the nutty stuff that happens in high finance. But you know what? Truth is more fun than fiction… if I tried to put a twist like that in a fictional novel plot, no one would believe it. Theyd write it off as too crazy. Now dont get me wrong… I agree that Rick Wagoner (the now ex-CEO of GM) should have been canned. He should have been canned a long, long time ago. The guy handled his exit with class and grace, Ill give him that. But really now when your .pany loses a mind-boggling $90 billion, the share price falls from $70 to $2, and youre still talking up incremental change in your media memos, its long past time for the ax. No, the amazing thing in all this is not Wagoners long overdue White House-engineered demise. Its the insane difference in treatment between Wall Street and Detroit, as displayed in back-to-back instances over a single weekend. Let us gladly grant that automaker heads had to roll. Many months ago in these very pages, we called loudly for the resignation of Wagoner and his fellow dead-enders. I mean for Petes sake, both Toyota and Honda felt .pelled to tap new leadership as a result of the crisis… and those two .panies are actually healthy and The funny (or not so funny) part of the deal is where Rick Wagoner went wrong. Not from a running GM perspective, but from a saving Rick Wagoners career perspective. As the long-time head of a doomed behemoth, Wagoner had proved himself to be a championship-caliber contestant in the game of CEO survivor where the objective is to keep from getting voted off gravy-train island for as long as possible. Wagoners ultimate mistake, though, was to fail too small. He should have failed bigger. Heres what I mean… For quite a long time, it seemed that General Motors had the lock on fail. In terms of a hopelessly doomed, dire out.e muscle-flexing contest, who could .pete with the mighty GM? Just look at the sheer scope of it all: The dying industry (coupled with a dying city)… the deteriorating quality… the vibrant .petitors… the gigantic-epic-humongous pension obligations… the desperate suppliers lined up like domino chains… GM seemed to be the undisputed king of fail, with tens of billions in mounting losses to make the case. But that was all kid stuff once Wall Streets weapons of mass destruction (Warren Buffetts pet name for derivatives) hit the scene. In perhaps the most stunning instance of top this ever recorded in American financial history (or ANY financial history for that matter), the megabankers came along and made Rick Wagoner a mere piker. In .parison to Citigroup, Bank of America and the like, the GM failboat started looking like a dinghy moored next to an ocean liner. And so the megabankers the new undisputed champions of fail wrangle themselves a high-profile meet-up inside the White House (as opposed to some other less cordial place), .plete with smiling faces and post-chat photo op… while Wagoner gets tossed like yesterdays trash. Rick my man, you should have done it bigger… if only youd had the gumption to, say, juice GMs pension fund with 10 cubic kilotons of derivative toxic waste. You know, a couple truckloads of inverse-floater triple-leverage mega-mortgage reverse-collateralized AIG swaps. Something like that. Ah well. Better luck next time… and let this be a lesson to all you other bailout-hungry fail-prone CEOs: One of the saddest aspects of all this apart from the plight of the many auto workers and related auto industry workers who dont deserve this is whats happening to Detroit. There is a personal tinge to this whole saga: Your humble editor was born in Detroit. I still have relatives in Detroit and Ann Arbor. On top of that, a good chunk of family history is rooted in Grosse Pointe. My connection to Motor City has grown tenuous over the years… having spent the last 11 years out West, I am now a Nevadan more than anything. But I did get the chance to visit Detroit this past Thanksgiving. That visit included the opportunity to drive around and see the semi-apocalyptic conditions firsthand. Believe it or not, there are some real insights to draw from Detroits automotive plight, and maybe a trading idea or two to boot (no pun intended). Well touch on those in a future 相关的主题文章:

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