ild,
I guess I'm not the only one who questioned Lutz's strategy to pull the big truck/suv platform ahead in the schedule. Lutz has been bounced.
GT
TH
GM CEO Takes Over Core Car Unit
By Michael Ellis
DETROIT (Reuters) - General Motors Corp. (NYSE:GM - news) said on Monday that Chief Executive Rick Wagoner will take day-to-day control of North American automotive operations, putting his job on the line to turn around the money-losing car business at the world's largest automaker.
Wagoner will take over the duties of two long-time auto executives following GM's warning last month that it expected its biggest quarterly loss since it nearly went bankrupt in 1992. Such troubles have sent its bond rating down to just one step above "junk" status at two ratings agencies, and its stock price to its lowest level in more than 13 years as foreign competition has eroded its once-dominated U.S. market share to about 25 percent.
"Rick is saying, 'I'm putting my neck in the noose on North America and that's going to be my primary task,"' said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.
Wagoner will take the helm from Bob Lutz, chairman of GM North America, and Gary Cowger, president of GM North America, who will both now focus on global responsibilities.
Lutz, the 73-year-old former Chrysler executive who Wagoner recruited to revitalize GM's car and truck lineup, will lead GM's global product development activities. He has pushed for new vehicles like the Pontiac Solstice roadster due this year.
Cowger will focus on global manufacturing and labor, including efforts to wring concessions from GM's biggest union, the United Auto Workers (UAW) union, particularly to combat soaring health care costs.
"Given the challenges we face in North America, it makes sense for me to assume control of GMNA's (General Motors North America) day-to-day operations and shorten the lines of communication and decision-making," Wagoner said in a statement.
"In manufacturing, one of our biggest challenges is our lack of cost-competitiveness in the United States, which is due to our legacy costs, especially the ever-increasing burden of high health-care expenses," Wagoner said.
FALLING SALES
GM's U.S. sales have fallen 5.1 percent through the first three months of 2005 from a year ago, and its market share has tumbled to 25.6 percent from about 27.3 percent for all of 2004 and compared to 32 percent 10 years ago, despite generous sales incentives.
Wagoner had been head of GM North America before being named chairman and CEO. He said that Lutz had requested the change in order to devote his time to integrating GM's car and truck development around the world.
Some industry analysts have criticized some of GM's new cars and trucks launched under Lutz's tenure, including the Buick Lacrosse and the Pontiac G6 sedan.
But those vehicles were already under development before Lutz arrived at GM in 2001, and the true test of his leadership will begin with the new Solstice roadster due this year, Cole said.
The shift in executive duties at the top of GM -- the third largest U.S. company as measured by sales -- is the second in the last two months.
Last month, GM reorganized its global vehicle development and engineering operations, combining four regions into a single system to speed up the launch of new cars and trucks.
"Now's the right time to accelerate the global integration of two of our most important functions, product development and manufacturing/labor," Wagoner said on Monday.
Cowger, who had led GM in past labor negotiations with the UAW, said last month that a "competitive" health care plan for both its unionized and salaried workers would save GM billions.
GM, the largest private U.S. provider of health care, has estimated that its U.S. health care costs for more than 1 million current and retired workers and their families will grow to $5.6 billion this year from $5.2 billion in 2004.
GM shares were down 13 cents at $29.25 in afternoon trade on the New York Stock Exchange.
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