General Motors Co.’s (GM) board of directors gave a vote of confidence to embattled Chief Executive Rick Wagoner after the automaker surprised Wall Street by announcing a $15.5 billion loss.
This praise reminds me of the pat on the back President Bush gave to the Director of FEMA Michael Brown after Hurricane Katrina. "Brownie" did not last long in his job afterwards even though Bush said he did a "heck of a good job" — an opinion shared by few other people. Wagoner is in a similar situation.
To be sure, Wagoner probably needs the reassurance considering GM’s horrible results. The CEO does deserve credit for reworking the company’s contract with the United Auto Workers Union which helped it slash $9 billion in costs. The automaker has increased growth outside the U.S.
Things are still lousy. GM has reported losses of more than $18 billion this year. It lost about $50 billion during 2005, 2006 and 2007. With results like that it’s no wonder as an anonymous source told The Wall Street Journal that "the board is totally behind Rick, realizing nobody could deal with this situation any better than he."
That’s a debatable point to say the least and GM’s board knows that. All of this talk about the great job he’s doing is a smokescreen to lay the groundwork for his departure from GM.