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August 19, 2009
E-mail a friendYOUNG VOICES
White House to Executives: Perform or Else
Ousted GM CEO Rick Wagoner may spell trouble for other executives.
When the President of the United States asks you to do something, you respond. That sounds simple enough, right? Well, what happens if he asks you to quit your job? The answer is you leave. Sound harsh? Believe it or not, it's exactly what happened to General Motors former CEO Rick Wagoner.
Wagoner was one of the 3 auto executives who flew to DC asking the federal government for taxpayer dollars in 2008. Despite concessions from the auto workers' union and a troubled restructuring plan, nothing seemed to get General Motors moving in the right direction quickly enough. That is, of course, until now.
In a tough economic environment where car purchases have been down, it's become almost commonplace to see heads of companies roll out to Washington, DC for a loan. The practice has become so prevalent that Capitol Hill has truly become the new bank of America.
Many people realize however that the money from Washington can't continue to flow like this forever, and the President has stepped in to ensure top execs get the message. The president sat down to address his concerns with Bob Schieffer, Sunday, on CBS' Face the Nation. The president stated that, while companies still may need government funds, they must first shape up.
The departure of Wagoner has sent ripple effects through Wall Street, and shares of GM's stock have remained relatively constant.
Some 48 hours after Wagoner's removal, some are speculating as to who might be seen as the next CEO to receive the presidential boot.
This was a bold, yet decisive, move on the part of this newly elected president, to ask for Mr. Wagoner's removal. It won't be surprising to see more action like this come from the White House in the coming weeks.