Why Rick Wagoner can't catch a break
He's certainly capable of boneheaded moves, and GM's accounting mistakes should be a personal embarrassment, but the CEO's not solely to blame for the automaker's plight.
By Alex Taylor III, FORTUNE senior editor

NEW YORK (FORTUNE) - When it rains, it pours and General Motors (Research) is in the middle of a typhoon. The storm clouds include, but are not limited to: grand jury probes, SEC subpoenas, admissions of inadequate financial controls and restated earnings.

Meanwhile, GM's core business -- selling cars in North America -- is looking much worse. The company confessed this week that its attempt to wean itself from expensive marketing incentives will cost it one hard-earned point of market share this year and still isn't guaranteed success.

General Motors Chairman and CEO Rick Wagoner
General Motors Chairman and CEO Rick Wagoner
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Is it any wonder that Standard & Poor's announced Wednesday it is putting GM's already junk-rated debt on credit watch with negative implications?

The flood of bad news has brought increasing speculation that Chairman and CEO Rick Wagoner will lose his job. The Wall Street Journal's Paul Ingrassia, who won a Pulitzer for reporting on GM's last crackup in the early 1990s, baldly predicted that GM's board will oust Wagoner, "this summer, at the latest."

Widely-read Detroit blogger Peter DeLorenzo headlined a recent column with "Time is running out on the Rick Wagoner Era at GM." And The New York Times declared that "it is far from certain" whether Wagoner can save the company or his job.

Absent in all these proclamations has been any identification of exactly whom will push Wagoner out. No member of GM's board of directors has been quoted anonymously or by name suggesting that Wagoner's time is up.

Nor has there been any serious vetting of potential candidates -- either from inside or outside the company -- who might succeed him.

Assuming no current auto CEO wants to clean up the GM mess, the most qualified replacement is probably GM CFO Fritz Henderson. But Henderson would bring to the job the same kind of skills and experience that Wagoner has, but without Wagoner's charisma.

There are plenty of good reasons why Wagoner is catching flack. He keeps his cards close to his chest and stays out of the media, thus appearing to be both clueless and lacking in the urgency that GM's crisis demands.

He is methodical to a fault, preferring to grind out three yards in a cloud of dust than to throw a Hail Mary pass that might win him some favorable coverage. And he refuses to make a ceremonial hanging, even when one might serve the larger purpose of sending a strong message to the survivors.

Because Wagoner is too polite to confront his critics head-on, he also takes a lot of heat for stuff that isn't his job. Why, in a company with thousands of engineers, is it Wagoner who gets blamed for the ho-hum styling of the Pontiac G6 or the lack of a modern five-speed transmission in the Buick Lucerne?

Why does Wagoner get rapped for holding GM back from the development of hybrid-electric cars, when Nissan's Carlos Ghosn, the most heralded auto executive of the 21st century, has adopted the identical strategy and gets praised for his practicality?

Why, after the UAW has been feasting on the largesse of GM chairmen for four decades, does Wagoner get accused of giving away the store?

Wagoner is certainly capable of bonehead moves. He frittered away several billion dollars of GM's scarce cash on a partnership with Fiat that looked questionable from the outset. His strategy of buying market share with incentives after 9/11 has blown up in his face.

And GM's recent revelation of a slew of accounting mistakes should be a personal embarrassment for the former CFO.

But Wagoner has listened to advice from Kerkorian director Jerry York about cutting the dividend and reducing executive compensation, led an unheralded reduction in GM's white collar workforce, and proposed a startlingly bold plan to buy out as many members of the United Auto Workers union as will accept his offer.

Besides surmounting the wave of negative press coverage, Wagoner's biggest challenge going forward is to craft a settlement with Delphi and the UAW over a new wage scale. Unless the Delphi workers can be persuaded not to strike, they could halt GM's production in a matter of days and send the company into Chapter 11.

If Wagoner is able to surmount that hurdle, he deserves to be made GM's chairman and CEO for life.

Plugged In is a daily column by writers of FORTUNE magazine. Today's columnist, Alex Taylor III, can be reached at ataylor@fortunemail.com. Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.