Lutz and Cowger Demoted by Wagoner 4/4/05
04-04-2005, 10:03 AM
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Lutz and Cowger Demoted by Wagoner 4/4/05
Monday, April 4, 2005
CEO takes direct control of GM North America
Lutz and Cowger reassigned as Wagoner assumes daily role
By Dee-Ann Durbin / AP Auto Writer
General Motors Corp. chairman and chief executive Rick Wagoner said Monday he will take over daily responsibility of the automaker's struggling North American division.
GM North American chairman Bob Lutz and GMNA President Gary Cowger will relinquish those roles and focus full-time on global product development and global manufacturing and labor, respectively, the company said.
Lutz also serves as GM's vice chairman and Cowger as a group vice president.
"Given the challenges we face in North America, it makes sense for me to assume control of GM North America's day-to-day operations and shorten the lines of communication and decision-making," Wagoner said in a statement.
"I look forward to working closely with an energized, aggressive GMNA team ... to move faster on the path toward re-establishing profitability in GM's largest regional business unit."
Wagoner added that Lutz and Cowger are two of GM's most experienced executives and will help the company enhance its global position.
GM, the world's largest automaker, announced last week that its U.S. sales fell 1.3 percent in March and now are down 3.8 percent for the year. While GM was hoping for a stronger month, the numbers were far better than February, when GM announced a 12.7 percent decline and cut its production schedule.
GM truck sales were up 3.8 percent in March, but car sales fell 8 percent and are down 8 percent for the year despite new entries such as the Pontiac G6, the Buick LaCrosse and the Chevrolet Cobalt.
CEO takes direct control of GM North America
Lutz and Cowger reassigned as Wagoner assumes daily role
By Dee-Ann Durbin / AP Auto Writer
General Motors Corp. chairman and chief executive Rick Wagoner said Monday he will take over daily responsibility of the automaker's struggling North American division.
GM North American chairman Bob Lutz and GMNA President Gary Cowger will relinquish those roles and focus full-time on global product development and global manufacturing and labor, respectively, the company said.
Lutz also serves as GM's vice chairman and Cowger as a group vice president.
"Given the challenges we face in North America, it makes sense for me to assume control of GM North America's day-to-day operations and shorten the lines of communication and decision-making," Wagoner said in a statement.
"I look forward to working closely with an energized, aggressive GMNA team ... to move faster on the path toward re-establishing profitability in GM's largest regional business unit."
Wagoner added that Lutz and Cowger are two of GM's most experienced executives and will help the company enhance its global position.
GM, the world's largest automaker, announced last week that its U.S. sales fell 1.3 percent in March and now are down 3.8 percent for the year. While GM was hoping for a stronger month, the numbers were far better than February, when GM announced a 12.7 percent decline and cut its production schedule.
GM truck sales were up 3.8 percent in March, but car sales fell 8 percent and are down 8 percent for the year despite new entries such as the Pontiac G6, the Buick LaCrosse and the Chevrolet Cobalt.
04-04-2005, 10:58 AM
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That makes more sense. Lutz's time at GM is too short to be handling the day-to-day stuff ... He needs to be focusing on strategy.
Let Wagoner deal with that and when shit gets worse under him, Lutz can survive the purge that's coming
Let Wagoner deal with that and when shit gets worse under him, Lutz can survive the purge that's coming
04-04-2005, 01:29 PM
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Lutz, Cowger to give up North American duties; Wagoner takes over - - DALE JEWETT | Automotive News - - Source: Autoweek
DETROIT -- General Motors executives Robert Lutz and Gary Cowger are “relinquishing” their responsibilities for North America to focus on global duties, GM said Monday.
GM CEO Rick Wagoner, 52, will take over leadership of General Motors North America.
Lutz, 73, who had been chairman of General Motors North America, will focus on global product development. Cowger, 57, who had the title of president of General Motors North America, is to focus on global manufacturing and labor.
“Given the challenges we face in North America, it makes sense for me to assume control of General Motors North America’s day-to-day operations and shorten the lines of communication and decision-making,” Wagoner said in a statement.
In his statement, Wagoner said Lutz had asked to devote all his efforts on product development. “I’ll continue to value his business advice and support, but Bob’s legacy at GM will be in our future cars and trucks,” Wagoner said.
Cowger, Wagoner noted, will be changed with dealing with labor unions to try and find ways to cut costs, particularly in health care.
Rough ride
The changes come in the wake of a couple of rough weeks for GM.
The automaker has been buffeted by Wall Street analysts since March 16, when it slashed its earnings forecast for this year. At that time, GM executives said GM North America was the company’s biggest problem.
GM expects to lose about $848 million, or $1.50 a share, in the first quarter, excluding special items. In early January, the automaker had said it expected to break even for the quarter.
For the full year, GM expects to earn $565 million to $1.13 billion, or $1 to $2 a share, excluding special items — a dramatic reduction from its earlier forecast of $2.26 billion to $2.83 billion, or $4 to $5 a share.
The cuts prompted the major debt-rating agencies to warn that GM’s debt was in danger of falling to junk status. That downgrade could raise GM’s cost of borrowing money and prevent some financial firms from buying its debt.
Fixing North America
At the time, Wagoner and CFO John Devine said the downgrades were due to falling sales and production cutbacks in North America.
“Clearly we have significant challenges in North America,” Wagoner said then. “The rest of our automotive businesses, and GMAC, are running in line with, or ahead of, our expectations.”
Through the first three months of this year, GM sales are down 5.2 percent compared with the same period last year, at slightly over a million units including Saab. But March was good for GM, with sales up 2.3 percent to 420,442 units. GM ran a “March Madness” sales promotion during the month that offered an extra $1,000 on vehicles that had been on dealership lots for more than four months.
GM lost two executives last week, when GM China group chief Phil Murtaugh and Saab Cars USA General Manager Debra Kelly-Ennis resigned.
GM CEO Rick Wagoner, 52, will take over leadership of General Motors North America.
Lutz, 73, who had been chairman of General Motors North America, will focus on global product development. Cowger, 57, who had the title of president of General Motors North America, is to focus on global manufacturing and labor.
“Given the challenges we face in North America, it makes sense for me to assume control of General Motors North America’s day-to-day operations and shorten the lines of communication and decision-making,” Wagoner said in a statement.
In his statement, Wagoner said Lutz had asked to devote all his efforts on product development. “I’ll continue to value his business advice and support, but Bob’s legacy at GM will be in our future cars and trucks,” Wagoner said.
Cowger, Wagoner noted, will be changed with dealing with labor unions to try and find ways to cut costs, particularly in health care.
Rough ride
The changes come in the wake of a couple of rough weeks for GM.
The automaker has been buffeted by Wall Street analysts since March 16, when it slashed its earnings forecast for this year. At that time, GM executives said GM North America was the company’s biggest problem.
GM expects to lose about $848 million, or $1.50 a share, in the first quarter, excluding special items. In early January, the automaker had said it expected to break even for the quarter.
For the full year, GM expects to earn $565 million to $1.13 billion, or $1 to $2 a share, excluding special items — a dramatic reduction from its earlier forecast of $2.26 billion to $2.83 billion, or $4 to $5 a share.
The cuts prompted the major debt-rating agencies to warn that GM’s debt was in danger of falling to junk status. That downgrade could raise GM’s cost of borrowing money and prevent some financial firms from buying its debt.
Fixing North America
At the time, Wagoner and CFO John Devine said the downgrades were due to falling sales and production cutbacks in North America.
“Clearly we have significant challenges in North America,” Wagoner said then. “The rest of our automotive businesses, and GMAC, are running in line with, or ahead of, our expectations.”
Through the first three months of this year, GM sales are down 5.2 percent compared with the same period last year, at slightly over a million units including Saab. But March was good for GM, with sales up 2.3 percent to 420,442 units. GM ran a “March Madness” sales promotion during the month that offered an extra $1,000 on vehicles that had been on dealership lots for more than four months.
GM lost two executives last week, when GM China group chief Phil Murtaugh and Saab Cars USA General Manager Debra Kelly-Ennis resigned.
04-04-2005, 02:44 PM
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Woowww, look at Wagoner go. Very wise move, for him atleast... shows that he's proactive and concerned about the company. Though this move is a year later than it should have been, IMO, it's a smart move to buy Wagoner time to fix things while the board still has faith in him. Personally, I think he needs to go. Lutz is now where he needs to be; global product guy. If GMNA comes back from the death bed, then it'll be directly because of Wagoner. Hopefully he can do the job.
04-04-2005, 03:41 PM
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Originally Posted by gavriil
This shows that Wagoner is still running the company with full faith from the investment community. Let's see how much time they gave him...
He's still running the company but with GM shares nearing junk bond status I doubt that he has the faith of anybody in the investment community.
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04-04-2005, 06:06 PM
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Originally Posted by titan
Woowww, look at Wagoner go. Very wise move, for him atleast... shows that he's proactive and concerned about the company. Though this move is a year later than it should have been, IMO, it's a smart move to buy Wagoner time to fix things while the board still has faith in him. Personally, I think he needs to go. Lutz is now where he needs to be; global product guy. If GMNA comes back from the death bed, then it'll be directly because of Wagoner. Hopefully he can do the job.
04-04-2005, 06:09 PM
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I feel the need...
No one's been let go. Cowger is still with GM and Lutz has been positioned as a global strategy guy. If Lutz drops a few more bombs like the GTO, he will be soon to go.
04-05-2005, 11:33 PM
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by Peter M. DeLorenzo
"The Rick" makes his move, but will it really make a difference?
Detroit. In the classic coming of age movie, "Risky Business," the constant thread/catchphrase uttered by Tom Cruise and his buddies was, "Sometimes you just have to say what the f---, and make your move." It resulted in all kinds of comical mayhem throughout the movie, but in the end it worked out for all concerned, for the most part - on several different levels. Two days ago, Rick Wagoner, Chairman and CEO of General Motors, decided it was time to make his move, but whether or not it will work out for all concerned is highly debatable.
GM announced that Bob Lutz and Gary Cowger are "relinquishing" their responsibilities for North America, and that Rick Wagoner will be taking over leadership of GM North America. Lutz will now focus on global product development, while Cowger will focus on global manufacturing and labor. In a prepared statement Wagoner said, "Given the challenges we face in North America, it makes sense for me to assume control of General Motors North America's day-to-day operations and shorten the lines of communication and decision-making."
As the news broke last Monday morning from down at "The Tubes," the prevailing thought around here was that it was a bulletin from the "You Gotta Be Kidding Me" File, because it made zero sense to us here at AE. With GM's fundamental problems revolving around product - or the lack of it - and The Rick not exactly being known for his product acumen, this didn't exactly sound like a great move.
When you step back and take a look at what exactly is going on down at The Tubes, what happened? Basically, not much. Maximum Bob is still chief of global product development, which includes GM North America, but now he will focus all of his efforts on that, rather than on the marketing and sales problems in North America. And Gary will be focusing on manufacturing and GM's upcoming labor negotiations, which are crucial and what he was expected to be doing anyway. The loss of title is more damaging to Gary's ego than anything, but The Rick still needs both of these guys every step of the way.
So what, exactly, did The Rick accomplish with this maneuvering? The most obvious dimension to this move is that he is positioning himself with Wall Street analysts and GM's board of directors as needing to take a hands-on role to make sure the company weathers the most difficult period in its recent history. But the other component to this is that The Rick has clearly positioned himself nearest to the exit if results aren't produced or if it all blows up - and make no mistake, he will take the fall if it does.
The fundamental problem here is that GM isn't going to be fixed in six months or even twelve months - it's going to take at least two years for the company to get back on track and to develop any real momentum in the market. And the legacy costs and healthcare costs, which are strangling GM's ability to compete, remain fixed and oppressive. It's also painfully true that GM could have and should have made the necessary hard decisions that were essential to solidify the company's future years ago, when The Rick first took control of the company, but instead they became incentive-driven marketing junkies who lost sight of what really matters in this business - the product - and it hastened their headlong rush to the mess they find themselves in today.
There is another fundamental and perennial problem for GM, too, and that is that they've always operated under the guiding principles of Alfred Sloan, who was truly brilliant and whose model for market domination by GM worked flawlessly for a long, long time. But Sloan's model rapidly became obsolete when the North American market turned away from being the private playground for what used to be called the "Big Three" and instead became the battleground of choice for the world's automobile manufacturers - resulting in the most hotly contested market of any kind that the world has ever seen.
And while we're at it, let me remind you of the one Sloan saying that has been a constant mantra hanging over GM for decades - the famous statement "We're not in the business of making cars, we're in the business of making money." That quote came from a moribund, accountant-driven culture that made money hand over fist but that only made it because GM had some of the most legendary product and marketing talent in automotive history working on their behalf. Well, GM isn't making any money in the North American market, and the famous Sloan battle cry has been relegated to the dustheap of faded automotive dreams.
Now, this business is about making money as the direct result of designing, engineering and building great product, not through some ingrained inertia or accounting wizardry. And here we have GM, which has been an accountant-driven company with an accountant-driven culture for decades, apparently trying to solve its problems the traditional way it always has in a market that is completely and utterly driven by the fact that you must deliver outstanding product first and foremost.
Can Rick Wagoner really make a difference? He has more than a shot, but it's definitely a case of "be careful what you wish for" from where I sit, because The Rick has put himself in a difficult position. Yes, it was always his show ultimately, but it looks to me that he hasn't reached out enough for the opinions and input from the best and the brightest from within the company, or even available to him from outside the company, either. Instead, he has gone on record saying that he will "fix" GM by reducing costs, renegotiating labor agreements and helping to solve the national heathcare crisis that this country is facing any way he can.
And that's all well and good, but ultimately, it won't be enough to save General Motors.
As I've said before, GM has to get real about its position in the automotive world. It has to restructure the company to be smaller, leaner and product-focused with a logical, overall product marketing plan that is realistic about the stature of its brands in the marketplace.
And at this juncture, whether Rick Wagoner taking a "hands-on" role is going to improve GM's product focus or its marketing plans remains to be seen. But one thing is certain, if things don't improve, the next round of executive changes at the top of GM will involve The Rick himself.
Thanks for listening, see you next Wednesday.
"The Rick" makes his move, but will it really make a difference?
Detroit. In the classic coming of age movie, "Risky Business," the constant thread/catchphrase uttered by Tom Cruise and his buddies was, "Sometimes you just have to say what the f---, and make your move." It resulted in all kinds of comical mayhem throughout the movie, but in the end it worked out for all concerned, for the most part - on several different levels. Two days ago, Rick Wagoner, Chairman and CEO of General Motors, decided it was time to make his move, but whether or not it will work out for all concerned is highly debatable.
GM announced that Bob Lutz and Gary Cowger are "relinquishing" their responsibilities for North America, and that Rick Wagoner will be taking over leadership of GM North America. Lutz will now focus on global product development, while Cowger will focus on global manufacturing and labor. In a prepared statement Wagoner said, "Given the challenges we face in North America, it makes sense for me to assume control of General Motors North America's day-to-day operations and shorten the lines of communication and decision-making."
As the news broke last Monday morning from down at "The Tubes," the prevailing thought around here was that it was a bulletin from the "You Gotta Be Kidding Me" File, because it made zero sense to us here at AE. With GM's fundamental problems revolving around product - or the lack of it - and The Rick not exactly being known for his product acumen, this didn't exactly sound like a great move.
When you step back and take a look at what exactly is going on down at The Tubes, what happened? Basically, not much. Maximum Bob is still chief of global product development, which includes GM North America, but now he will focus all of his efforts on that, rather than on the marketing and sales problems in North America. And Gary will be focusing on manufacturing and GM's upcoming labor negotiations, which are crucial and what he was expected to be doing anyway. The loss of title is more damaging to Gary's ego than anything, but The Rick still needs both of these guys every step of the way.
So what, exactly, did The Rick accomplish with this maneuvering? The most obvious dimension to this move is that he is positioning himself with Wall Street analysts and GM's board of directors as needing to take a hands-on role to make sure the company weathers the most difficult period in its recent history. But the other component to this is that The Rick has clearly positioned himself nearest to the exit if results aren't produced or if it all blows up - and make no mistake, he will take the fall if it does.
The fundamental problem here is that GM isn't going to be fixed in six months or even twelve months - it's going to take at least two years for the company to get back on track and to develop any real momentum in the market. And the legacy costs and healthcare costs, which are strangling GM's ability to compete, remain fixed and oppressive. It's also painfully true that GM could have and should have made the necessary hard decisions that were essential to solidify the company's future years ago, when The Rick first took control of the company, but instead they became incentive-driven marketing junkies who lost sight of what really matters in this business - the product - and it hastened their headlong rush to the mess they find themselves in today.
There is another fundamental and perennial problem for GM, too, and that is that they've always operated under the guiding principles of Alfred Sloan, who was truly brilliant and whose model for market domination by GM worked flawlessly for a long, long time. But Sloan's model rapidly became obsolete when the North American market turned away from being the private playground for what used to be called the "Big Three" and instead became the battleground of choice for the world's automobile manufacturers - resulting in the most hotly contested market of any kind that the world has ever seen.
And while we're at it, let me remind you of the one Sloan saying that has been a constant mantra hanging over GM for decades - the famous statement "We're not in the business of making cars, we're in the business of making money." That quote came from a moribund, accountant-driven culture that made money hand over fist but that only made it because GM had some of the most legendary product and marketing talent in automotive history working on their behalf. Well, GM isn't making any money in the North American market, and the famous Sloan battle cry has been relegated to the dustheap of faded automotive dreams.
Now, this business is about making money as the direct result of designing, engineering and building great product, not through some ingrained inertia or accounting wizardry. And here we have GM, which has been an accountant-driven company with an accountant-driven culture for decades, apparently trying to solve its problems the traditional way it always has in a market that is completely and utterly driven by the fact that you must deliver outstanding product first and foremost.
Can Rick Wagoner really make a difference? He has more than a shot, but it's definitely a case of "be careful what you wish for" from where I sit, because The Rick has put himself in a difficult position. Yes, it was always his show ultimately, but it looks to me that he hasn't reached out enough for the opinions and input from the best and the brightest from within the company, or even available to him from outside the company, either. Instead, he has gone on record saying that he will "fix" GM by reducing costs, renegotiating labor agreements and helping to solve the national heathcare crisis that this country is facing any way he can.
And that's all well and good, but ultimately, it won't be enough to save General Motors.
As I've said before, GM has to get real about its position in the automotive world. It has to restructure the company to be smaller, leaner and product-focused with a logical, overall product marketing plan that is realistic about the stature of its brands in the marketplace.
And at this juncture, whether Rick Wagoner taking a "hands-on" role is going to improve GM's product focus or its marketing plans remains to be seen. But one thing is certain, if things don't improve, the next round of executive changes at the top of GM will involve The Rick himself.
Thanks for listening, see you next Wednesday.
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