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GM's Ex-CEO Breaks Silence

December 12, 2011
4 min to read


RICHMOND — Rick Wagoner spent nearly two decades atop the world's largest auto company. After almost three years of silence, the former chief executive of General Motors Co. emerged over the weekend.


Mr. Wagoner picked his hometown of Richmond, Va., to make his first public appearance since 2009, when he was ousted from GM by the Obama administration as a condition of the government's rescue of the company. He addressed 1,100 winter graduates at Virginia Commonwealth University, reported The Wall Street Journal.

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His speech was short—roughly 12 minutes. Beforehand, he fended off several interview requests, including one from the local paper that has covered him since he was captain of the high-school basketball team. He barely mentioned GM, but talked to graduates about taking risks and accepting defeat gracefully.


It was a fitting speech for an executive who often was visibly uncomfortable in the spotlight, but popular among those who worked for him.


The 58-year-old former CEO's only mention of GM came as he tried to convey to his audience the importance of accepting challenges. He said he never wanted to live in New York or overseas, though those were his first assignments from GM, and he benefited from them.


"I was willing to go just about anywhere in the U.S. for the best job—except New York City," he said. "Of course, I received a job offer from GM—in New York City."


"Don't worry about planning every step of your life," he added.

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Mr. Wagoner rose to prominence at age 39 when he was named GM's youngest-ever chief financial officer and heir apparent to then-CEO Jack Smith.


He succeeded his mentor in 2000, and became one of the highest-profile CEOs in the world and the face of Detroit. The way he ran GM played a major role in shaping the direction of the global auto industry.


He kept car sales going in the aftermath of the Sept. 11, 2001, terrorist attacks with a "Keep America Rolling" campaign and heavy use of incentives.


Detroit's smaller auto makers, Ford Motor Co. and Chrysler Group LLC, were forced to follow GM's lead and, to some extent, Toyota Motor Corp. and other auto makers did as well.


When Mr. Wagoner entered GM into an alliance with Italian auto maker Fiat SpA, the move triggered a string of similar alliances around the world.

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His focus on high-margin trucks and sport-utility vehicles, at the expense of passenger cars, in many ways defined Detroit's strategy. After GM bought Hummer, the line of military-like SUVs, Ford followed with the purchase of Land Rover.


While Mr. Wagoner's strategies helped propel GM to multibillion-dollar profits, particularly in the 1990s when he headed the company's North American operations, they ultimately contributed to its downfall.


GM began racking up losses in the mid-2000s, amid sales declines and skyrocketing health-care costs. By 2008, truck sales were tanking and GM's cars couldn't compete with those built by Toyota and Honda Motor Co. of Japan.


Mr. Wagoner closed factories and reduced head count, but many of his steps to shore up GM came too late and fell short.


During his tenure, GM had losses of $85 billion. He struck a landmark deal with the union to offload retiree costs into a union trust in 2005, but three years later the company still owed the fund billions. He fought against a bankruptcy filing, fearing it would cause a customer exodus that would be fatal to GM. And he resisted cutting unprofitable brands and models, moves the Obama administration forced in bankruptcy, along with further job cuts, factory closures and steps to shed billions in debt through bankruptcy.

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In early 2009, as GM pleaded for a government bailout, Mr. Wagoner told President Barack Obama's automotive task force that he would step down if it meant saving GM. It did, and he resigned in March.


After leaving GM, Mr. Wagoner dug into work at his alma mater, Duke University, where he was named head of the board of directors earlier this year.


Two of his three sons are Duke graduates, and a third now is attending the school. Mr. Wagoner also sits on the boards of Washington Post Co. and Detroit Country Day High School.


Though he doesn't talk about GM in public, Mr. Wagoner talks regularly to former co-workers at the company, inquiring often about how people are doing, according to several people who keep in touch with him.


Shortly after GM's current CEO, Dan Akerson, took over last fall, Mr. Wagoner met with him to talk about the company.

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"He's still incredibly loyal to GM," said one former executive who stays in contact with Mr. Wagoner.


Mr. Wagoner closed his address Saturday with a quote from Mother Teresa: " 'What you spend years building, someone could destroy overnight,' " he said. " 'Build anyway.' "

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