Wagoner's Gone, but GM is Still Plugging the Volt

Although corporate stocks sometimes jump when an unsuccessful CEO bails out, the news that Rick Wagoner of General Motors resigned under pressure sent its shares (at just $3.62 at the close Friday) down more than 30 percent in initial trading Monday. The stock had gone as low as $1.45 a share in early March.

There was still some lingering sympathy for Wagoner in Detroit Monday. “It’s disappointing to see Rick go,” said one GM insider. “It’s a big mistake for him to leave. He and [former Vice Chairman Bob] Lutz were correcting the mistakes that were made with the EV-1 electric car.” Wagoner (deemed a “sacrificial lamb” by Michigan Governor Jennifer Granholm) was immediately replaced by President and COO Fritz Henderson.

In this dire situation, GM is still solidly behind the Chevy Volt hybrid car. Volt Communications Manager Dave Darovitz says the car, whose small gas engine produces electricity to drive an electric motor, remains on track to come to market in late 2010. “It’s the number one program at GM,” said Darovitz.

Wagoner arrived for his face-the-music Senate hearing last December in a test version of the Volt, though his waving looks more like drowning now. On March 16, three members of President Barack Obama’s Automotive Task Force—chair and investment banker Steven Rattner, former United Steelworkers official Ron Bloom and Diana Farrell, director of the McKinsey Global Institute—took a ride in test “mule” versions of the Volt: GM says Wagoner rode with Rattner, one of his executioners, in a blue car; and Henderson (his successor) saddled up in a white one with Bloom. That was a happier day than this one.

The cars don’t look like the snazzy Volts that will eventually emerge; the Volt battery pack and drivetrain is installed in Chevy Cruze bodies, since both vehicles share the next-generation Global Compact Architecture.

Darovitz says he’s driven one of the mules at the Milford Proving Grounds. “It’s effortless to drive, like floating in the air,” Darovitz said. “The car is very quiet and acceleration is instantaneous, totally different from a traditional vehicle.” GM will offer rides to journalists soon, and I’ll get a chance to judge for myself.

GM may or may not end up declaring bankruptcy, but it will do whatever it does with Rick Wagoner sidelined. Darovitz says the task force members were “impressed,” but maybe not enough. After the March 16 ride and drive, GM issued a statement: “We believe today’s visit provided a constructive glimpse of GM people, their passion for their work, and the future products and technologies that are an integral part of our viability plan.”

But that was the viability plan that Obama’s task force just rejected. Washington will be at the helm for the next two months, while GM’s future is decided. But, said Obama, the auto industry will not “simply vanish.”

Video: Obama on CSPAN talk about the next 60 days: