Neil Roland
Automotive News
October 21, 2009 - 10:46 am ET
UPDATED: 10/21/09 4:22 p.m. ET
WASHINGTON -- Former General Motors CEO Rick Wagoner and his aides were “sequestered” and “insular,” presided over a “lack of financial discipline” at the company and blamed everything but their own management for the company's demise, the former chief of the Obama administration's auto task force said.
In a speech today, Steven Rattner said Wagoner, who also was GM chairman, was subject to little oversight by the GM board, which was “utterly docile in the face of looming disaster.”
“At GM's Renaissance Center headquarters, the top brass was sequestered on the uppermost floor, behind locked and guarded glass doors,” Rattner told a National Press Club audience. “Executives housed on that floor had elevator cards that allowed them to descend directly to their private garage without mixing with lower-ranking colleagues.
“In that insular world, Chairman and CEO Rick Wagoner and his team appeared to believe that virtually all their problems resulted from some combination of the financial crisis, oil prices, the yen-dollar exchange rate and the UAW,” Rattner said.
He said that virtually all senior GM executives “came up through the ranks.”
At the same time, Rattner added, Wagoner is “a decent, honorable, hard-working, intelligent, well-meaning guy.”
In a first-person account today on Fortune magazine's Web site, Rattner also said Wagoner set a tone of “friendly arrogance” that pervaded the company. GM had “perhaps the weakest finance operation any of us had ever seen in a major company,” he said.
Rattner's blunt public comments about Wagoner's management and management style are a departure from what Obama administration officials have said about the former GM executive. When Wagoner stepped down in March under pressure from the administration, officials were much more guarded in their remarks.
Wagoner did not immediately respond to an e-mail today asking for his comment. GM spokesman Tom Wilkinson said, “From what we understand, he is not responding.”
Wagoner was CEO from June 2000 to March 2009 and chairman from May 2003 to March 2009.
Rattner, an investment banker who headed the Obama task force from February to July, also defended the administration's role in securing Wagoner's departure.
"It seemed obvious that any CEO who had burned through $44 billion of cash in 15 months should not continue,” he said.
Critics have said the government was heavy-handed.
At the time of Wagoner's ouster, Rep. Thaddeus McCotter, R-Mich., said the executive was a victim of a double standard.
"Mr. Wagoner has been asked to resign as a political offering despite his having led GM's painful restructuring to date,” McCotter said. “Mr. Wagoner has honorably resigned for the sake of his company's working families.”
Sen. Bob Corker, R-Tenn., also criticized the administration over Wagoner's firing.
“They had to look like they were doing something,” Corker said at the time. “And then now, in essence, they have taken over these companies.”
Rattner said Wagoner had also cautioned him against hiring an outsider at GM to replace him, citing the example of Ford Motor Co.
"'Alan Mulally called me with questions every day for two weeks after he got to Ford,'" Rattner quoted Wagoner as saying.
Wagoner formally retired in August with a package worth $8.6 million.
Today at the National Press Club, Rattner said GM's finances were something he felt particularly qualified to assess.
