March 31, 2009
What Ex-GM CEO Wagoner Should Have Said to Obama: "You Do Not Have the Authority to Fire Me"
When President Obama and his senior economic advisers decided that GM CEO Wagoner should be fired and this was communicated to Wagoner he responded incorrectly. He should have said: " You are not my board and you cannot fire me. I am going to stay until the board fires me." Consider what a simple refusal would have done -- reasserted the separate roles of public and private industry. Then if and hen Obama had followed up with calls to the GM board, telling them to fire Wagnoer, the board should say: "We will take you advice into account but you do not bind the board, our primary allegiance is to our shareholder and, if insolvent, to our unsecured creditors." In other words, Wagoner should have grown some cajonies. And when the President asked Wagoner as he has asked his successor Henderson, to hire adminsitration embedded employees, Wagoner and or Henderson should have said no.
On the merits of Wagoner's job performance, the board should have fired him because his "reorganization plan" was a joke. Wagoner, in fashioning a plan, should have laid out significant haircuts to wages and debt repayments, even if the groups had refused to assent, and told the government to condition any bailout grant on their agreement. If the groups then refused, GM declares Chapter 11.
March 31, 2009 | Permalink
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When the bank officer with authority over the loan that you need to save your business insists that you come to his daughter's wedding, you can say no to that as well, but it wouldn't be prudent.
Posted by: ohwilleke | Apr 2, 2009 12:39:34 PM
And Obama responds with a line right out of Frost / Nixon...
"when the President does it, it's not illegal."
Posted by: Chris Tamms | Apr 6, 2009 10:31:49 AM
I presume this article was written by a lawyer. The opinion expressed is simply out of touch with reality and lacks any common sense completely. Sure you can hide under legal technicality and bury your head in the sand. GM is facing a financial meltdown and ask for a bailout. Do you in your right mind expect that GM will bet a bailout if Mr. Wagoner refuses to resign when president Obama ask him to step down? He simply have no choice but to prudently comply and cry all the way to the bank to deposit his $20 million golden parachute.
Posted by: Victor Gaw | Apr 27, 2009 11:27:32 AM
Then Obama will just simply say "then you do not need a bailout." pause and then say "next please."
Posted by: buddhamaster | May 23, 2009 2:24:55 AM
Please - Obama could do nothing. First, this is all about bailing out the UAW, nationalizing the Auto industry is just icing. Second, the media would have actually had to report on Obama firing a Private employee improperly and it would have opened up the debate publicly which the administration doesn't want to do. And finally, it might have been brought up the the Democrats - with CRA and rewriting Fannie and Freddie's rules to support it - caused the whole real estate bubble and subsequent crisis to begin with.
Posted by: bill | May 27, 2009 4:55:11 PM