Rick Wagoner's worst nightmare

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NEW YORK (Fortune) -- When he spoke with Fortune at the end of last year, GM Chairman and CEO Rick Wagoner worried about "headwinds" that would impact the automaker's results in 2008.

What Wagoner had in mind were issues that affect the whole economy: oil prices, commodity and steel price inflation, the possibility of a recession. Those headwinds, which GM (GM, Fortune 500) can do little about, are blowing just as hard or harder than Wagoner expected. Add the housing meltdown, subprime crisis and credit crunch and you've got a witch's brew of malevolent ingredients that could stymie even the best prepared of chief executives.

Learning how to cope with the macro economy, though, is part of the CEO's job description and Wagoner is no whiner. What must be giving him fits, though, are other events that he couldn't have predicted and he can do very little to fix. These are not trivial matters. Taken together, they are potent enough to jeopardize GM's fragile recovery.

Consider:

Parts maker Delphi has remained enmeshed in bankruptcy for some 30 months. Its latest reorganization plan collapsed last week after its largest shareholder and lead investor, Appaloosa Management, bailed out of a deal to inject up to $2.55 billion in the company. GM had offered to pony up more than $2 billion to get Delphi back on its feet, and it now must wrestle with the uncertainty of how much more it will have to contribute before Delphi becomes a going concern.

The strike at American Axle (AXL), another big GM supplier, continues into its second month, with management-union relations rancid even by Detroit standards. The strike has idled GM plants, and the lost production will pummel GM's revenue for the first and second quarters. The strike has helped GM sell down inventories of big SUVs and pickup trucks, but it will soon start to take a bite out of sales.

Customers seem unwilling to cross the threshold of Saturn dealerships. Despite a total overhaul of its product line, Saturn's sales have been worse than bad, down 28.8% in March. Wagoner and other GM executives have been adamant about their intention to keep all seven of GM's North American brands alive despite the automaker's shrinking market share. They may have to reconsider the case of Saturn.

GM is counting on the arrival of the compact Astra to boost Saturn's results. But the Astra is nothing more than a German Opel that has been rebadged for American buyers, and it feels like one too, with an instrument panel that gives new meaning to the word "severe." Astra could have difficult attracting American buyers and may not be the car to save Saturn that GM is expecting. Besides, GM isn't saying, but it will likely lose money on every Astra it sells. The cars are built in Belgium, where they pay workers in expensive Euros rather than cheap dollars.

Combine those gusts with the other ill winds blowing through the economy, and you get a miserable storm that would make navigating difficult for even the healthiest of companies. For a company like GM, they could be life-threatening.

Patient and methodical, Wagoner spent years laying the groundwork for 2007's historic agreement on health and labor costs with the United Auto Workers. He makes a virtue of never coming to a snap decision or acting reflexively just to be seen doing something. Now, though, he seems to be taking an equally long view towards GM's financial recovery.

Lately, the party line at GM has been to look past the current difficulties to what it believes will be the halcyon days of 2010 and 2011. That's when the full effect of the UAW contract kicks in; Chevrolet's plug-in hybrid, Volt, hits the road (hopefully lifting GM's technology image); and demographic and sales trends give a boost to auto sales as younger drivers reach the market and people who put off getting a new car or truck return to dealerships. But given that trouble seems to find GM, those hopes may be unrealistic. Who knows what other outside events could blow through between now and then?

As recently as six months ago, GM's shares were selling for more than $43 per share. Today they are worth less than half that, closing at $21 on Monday. Investors seem to be tiring of GM's stormy weather and looking elsewhere for blue skies.