Wagoner drove GM to ruin

In his reign at GM, CFO, COO, CEO Rick Wagoner liquidated profitable divisions and weakened GM by destroying the diversity of the company. Promoting large gas-guzzling SUVs while shutting down the production of fuel-efficient vehicles, Wagoner sold a highly profitable GM division, Hughes Electronics with its DirecTV subsidiary, in 2002.

Wagoner halted production of the fuel-thrifty Geo line, replacing Geo production with the Hummer H2 the same year. GM’s EV1 vehicle had the most advanced electric motor drive system available, designed by the genius Alan Cocconi. Wagoner, unwilling to sell any of the EV1 electric cars, leased, then refusing extensions on the leases, repossessed and literally crushed every EV1 electric car in 2003. The same electric motor design is now being used in the Tesla electric car.

In a time of war Wagoner sold the profitable GM defense division in 2003, followed by the sale of GM’s profitable Electro-Motive diesel division, once the world’s largest locomotive manufacturer. At Wagoner’s hand GM stock fell from the $60 per share range to less than $1.50. Wagoner was trusted with GM, a strong, diversely invested company; he leaves it weak, teetering near ruin.

J. Earl Gibbs

Spokane Valley