WILMINGTON, Del. - Why the heck, shareholder activist John Chevedden wanted to know, is General Motors making room on its board for Erskine Bowles? Bowles is the political businessman perhaps best known for trying to shield former President Bill Clinton from the consequences of extramarital Oval Office sex.
Oh, plenty of good reasons, said GM Chairman and CEO Rick Wagoner.
"He brings a terrific experience in the financial field, in the business field as well as international experience," Wagoner told the overflowing Hotel DuPont ballroom during the automaker's annual meeting yesterday. "So he brings a great wealth in an area, frankly, where we need support at this time. So we're pleased to have him join the board."
"But we already have that with other directors," complained Chevedden. "There is no car person on this board whatsoever. You can hardly expect to increase market share with absolutely no car person on this board."
"I'm on the board, Mr. Chevedden," Wagoner shot back.
"You're not a car person," Chevedden said.
GM continues to lose market share. It's miles behind on hybrid engines and retro designs, the hottest marketing trends.
Its bonds were just downgraded to junk. It's being raided by Kirk Kerkorian - also not a car person. And its top executive is casually churning out the same bromides GM always dispenses in a crisis.
"We had a recovery plan in place, but it was clear we had to accelerate our progress," the GM chairman and CEO told the shareholders at the annual meeting. "I see no change" in the board. "The board has made it clear that they expect me to run General Motors."
Quick, was that Rick Wagoner, speaking yesterday in Wilmington while announcing 25,000 job cuts? Was it Robert Stempel trying to placate GM shareholders in 1992 as the company was downsizing by 74,000? Or was it Roger Smith in the mid-1980s planning to wipe out 40,000 middle-management jobs?
For the record, it was Stempel, who resigned under pressure from the board a few months later. But it's hard to tell.
"We are clarifying and focusing the role of each of our eight brands, giving them distinctive, clear, compelling roles in the GM portfolio," Wagoner said yesterday.
How many times have you heard that from these guys?
A mob of journalists covered the meeting, a turnout more apropos to Pope John Paul II's final days than a normally dry-as-a-document corporate confab.
Other aspects said "death watch," too. Metaphors employed by shareholders included sickness and potential healing, British Prime Minister Neville Chamberlain caving in to Adolf Hitler at Munich in 1938 and a painfully extended Titanic comparison by a guy who tried and failed to elect rebel board candidates.
As a percentage of GM's U.S. work force, which was 111,000 at the end of 2004, the 25,000 job cuts announced yesterday are comparable to the larger reductions of the early 1990s. Wagoner again complained about the $1,500 that GM's retiree and employee medical care adds to the expense of every car, a concept - unit costs! - that even some of the brighter TV reporters could grasp.
But ending, capitulating and sinking are not the proper action verbs to apply to GM now any more than they were in 1992. With a 25 percent U.S. market share and healthier units overseas, the company, which recently closed its 1,100-worker Baltimore plant, has a long future. It just probably won't be very distinguished.
It's true: GM's board has no car people. They're all financiers. The top car person is Robert Lutz, vice chairman and a former Chrysler executive with a long record of hit vehicles at that company. But Lutz recently was relieved of some duties and wasn't even on yesterday's agenda. Shareholders had to ask to hear him speak. When he did, examples of what he sees as exciting and promising - hybrids and retro styling - were areas in which GM is getting dusted by BMW, Chrysler and Toyota.
Wagoner announced no white-collar cuts yesterday. He's placing heavy bets on Hummers, Cadillacs and SUVs, which will be plastered if gas prices keep going up. His negotiations with unions to reduce health costs are far from paying off. And the national health care he seeks, to enable U.S. businesses to compete with foreign companies that don't bear such costs, is even further away.
Wagoner's bromides will probably get GM through this crisis. (The same might not be said for him. Kerkorian may have ideas there.) But they'll also ensure another crisis down the road.