GM's Wagoner in the Hot Seat

Judging by opinion columnists and bloggers, there’s a growing backlash against the idea of a taxpayer-funded federal bailout for the Detroit 3, and especially against the notion of leaving in place the current management.

As the biggest U.S. automaker and the lead company in pleading for federal help, a lot of this heat inevitably is directed at General Motors, and in particular at CEO Rick Wagoner.

The reasoning is, the auto industry bosses who are asking for help are the same ones that ran their companies into the ditch in the first place. If you search for the term “let the Detroit automakers fail,” you find a lot of voices who feel the automakers are “too big to let fail.” But there are also a lot of people who would let them fail – for being short-sighted, for building too many gas-guzzlers, for failing to develop more and better fuel-efficient cars before now.

However, two of the Detroit 3 are run by chiefs who were outside the industry until fairly recently. Alan Mulally of Ford inherited a mess when he joined Ford from Boeing in September 2006. Chrysler Chairman and CEO Bob Nardelli is even newer in his job, joining Chrysler from The Home Depot in August 2007.

Again, that leaves Wagoner in the hot seat, since he’s been on the job longest. He started running GM North American Operations back in 1994. He was president and COO in 1998, and president and CEO since 2000. It’s pretty hard for Wagoner argue that GM is someone else’s mess.

That doesn’t mean GM and the other companies won’t try. They cite, probably correctly, that the housing bubble and the credit crunch were outside the control of the auto industry.

So was cheap gasoline, supported by government policy and much lower taxes than most other developed countries. Cheap gas indirectly created demand for all those gas-guzzlers in the first place. And what about Japan’s government support for its automakers?

Those are all valid points. Wagoner said in an interview with Automotive News that he doesn’t see what would be gained if he were to be replaced by someone less experienced.

But he must be feeling the heat by now. If the auto-industry bailout stays on the national political agenda long enough for a public debate, politicians who back the bailout are going to feel obliged to demonstrate that they were tough on the auto industry, in return for taxpayer money.

GM needs quick action on a bailout, and so does Wagoner.