Most GM Recall Trouble Began Under Former CEO Wagoner

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By Douglas A. McIntyre Published
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Someone is always to blame when there is a big blunder, a huge mistake in business, or in politics or the military. The rule for blame is that, if it happened on your watch, it belongs to you. New CEO Mary Barra may be the General Motors Co. (NYSE: GM) chief who fields what will become years of trouble. But almost all that trouble began and drove through most of its course during the tenure of Rick Wagoner, the CEO that GM sacked, and some people blamed, as the company went bankrupt.

Wagoner was GM’s CEO from June 2000 to March 2009. He was chairman for the last six years of that period. A look at the manufacture dates on most of the 3.1 million vehicles the company has recalled covers model years that run from 2003 to 2010. Some of the models came later than that, but for the most part these must have been designed when Wagoner was chief. In terms of a starting point, GM has indicated the ignition problem at the heart of much of the recall process began with the 2001 Saturn Ion — when engineers first spotted that problem. That was about the time Wagoner took over. The engineers sat on that problem, for some reason.

Wagoner never will be blamed directly, at least legally for GM’s recall problems. He probably did not know about them. Which is part of the debate about what it means to be in charge when things go bad. Those things can happen to a nation’s president, or a general or a corporate leader. Leadership experts argue that the person at the top sets the ethics, sets the bar for performance, in moral terms as well as more mundane ones. Wagoner failed when judged by setting that bar, as least in so far as the behavior of his engineers.

Wagoner always will be remembered for the tens of billions of dollars GM lost when he ran the company. The roots of the problems that created the company’s recalls should be as well. These recalls may not be as crippling as the financial losses, but they may do nearly as much to hurt the big car company.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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