DETROIT - Rick Wagoner, General Motors Corp. chairman and chief executive officer, may have to sacrifice his job for the cash-desperate automaker to get government loans, but industry analysts, a GM board member, and even one of GM's harshest critics say now isn't the time to let him go.
As a deal for enough money to keep GM and Chrysler L.L.C. afloat through March emerged in Washington, Senate Banking Committee Chairman Chris Dodd (D., Conn.) said on CBS's
Face the Nation
that Wagoner should leave as a condition of GM's getting the loans. President-elect Barack Obama, without naming names, said the current auto-industry management should be ousted if it does not understand the need to make changes.
GM board member Kent Kresa said the automaker's board met by telephone yesterday, but he would not say whether Wagoner's future was discussed.
Kresa, chairman emeritus of Northrop Grumman Corp., said in an interview with the Associated Press that he did not think Congress would require Wagoner's departure and that it would be a terrible move because Wagoner had made great progress restructuring the automaker. Still, if the board has to choose between vital government money and Wagoner, it will have to consider his ouster, he said.
Even University of Maryland economist Peter Morici, a vocal auto-industry critic, questioned the timing.
"I advocated Wagoner going a couple of years ago," Morici said yesterday. "But at this critical time, it's the wrong time to change helmsmen."
Morici, who testified against the auto-industry bailout before Dodd's committee last month, said the boards of GM, Ford Motor Co. and Chrysler should pick who runs their companies, not Congress.
"It's better just to make them show how they can be profitable before giving them the cash," Morici said.
Kevin Tynan, an analyst with Argus Research Corp., of New York, who also has criticized GM management, said the timing was not right to oust Wagoner, who has agreed to work for a $1 salary next year.
Detroit-based GM is seeking up to $18 billion in loans to help it get through the recession and the worst U.S. auto-sales downturn in 26 years, while Chrysler wants $7 billion. Ford has said it could need $9 billion if the sales slump continues, but it has enough cash to make it through 2009 and might not need help.