The situation at GM is reminding Michigan Radio's Political Analyst Jack Lessenberry about another time in the company's history.
General Motors was in trouble, losing billions, year after year. They were losing market share and customer confidence. Something had to be done. But GM's chairman and chief executive just wasn't moving fast enough, despite repeated warnings.
He wasn't willing to make the painful decisions necessary, despite repeated pleas. There was real fear that the world's biggest automaker might go out of business.
So in a dramatic coup that shocked Detroit, General Motors chairman was forced to resign. Yes, I know that happened this week.
But here's what you may not know -- that also happened seventeen years ago, in 1992. The circumstances were different, but uncannily similar. Back then, the chairman was Bob Stempel, like Rick Wagoner, was a lifelong GM employee.
He had reached the top rung only two years before. Unlike the man he replaced, Roger Smith, and unlike Wagoner, he was a "car guy," an engineer, not a finance guy.
Stempel had long wanted to be chairman. But he arrived at the time of a perfect storm. The company started piling up record deficits, small compared to the money GM has lost in the last few years, but bigger than anybody had ever seen in 1992.
General Motors's market share had fallen by nearly ten percent in seven years, and the company's core North American operations were losing more than a billion dollars every three months.
For years, the board of directors had mostly collected their compensation and rubber-stamped anything management wanted to do. But they now were deeply worried.
Most of them didn't know a lot about the car business, but they did know they didn't want to be blamed if GM failed. So led by former Procter & Gamble chairman John Smale, they acted.
In April of that year, they forced Stempel to replace key members of his management team who they regarded as incompetent cronies, including the president and the finance chairman. They wanted to send a strong message that GM's CEO needed to change the old culture and way of doing business. But it didn't work. As Paul Ingrassia and Joseph White described in their spellbinding book Comeback, the Fall and Rise of the American Automobile Industry, Stempel just dug in his heels.
Finally, he was forced to resign in October. A new management team came in, the youngest of whom was the chief financial officer, who was only 39. The new leader was hard-charging Jack Smith. Four months later, at a party to honor those forced to retire, one of those men got up and said, "What happened at this company can't ever be allowed to happen here again." When change was needed, change had to be made, no matter how painful. GM's new leader applauded the moment.
"This will never happen again," Smith said, "and we will win!" Eight years later, he handed over the reins of the company to that young finance director, a man who had been in the room the day of Bob Stempel's final humiliation, a man named ...
Rick Wagoner. You know, you just can't make this stuff up.