He’s widely known as Rick Wagoner, the guy who runs General Motors Corp., but very little is known about the man, himself: George Richard Wagoner Jr.
Unlike automotive rock stars such as Carlos Ghosn, chairman of both Renault SA and Nissan Motor Co. Ltd. or Dieter (“Dr. Z”) Zetsch, chairman of DaimlerChrysler AG; Wagoner’s style is to keep a low personal profile.
Those who know him well say that’s simply his view of his role. “He’s the ultimate team player, not a talker,” says David E. Cole, chairman of the Center for Automotive Research. “He doesn’t need stroking. He commands loyalty by his ability to work with people. The old leader was king; the new leader is a coach, and coaches win. He knows what he doesn’t know.”
On a personal level, even Wagoner’s harshest critics agree he's decent, bright and likable.
Nevertheless, Wagoner has remained very much in the headlines and under attack by legions of critics and GM shareholders, as the auto maker’s fortunes have skidded.
Wagoner, 53, is facing a balancing act between keeping his job – one critic harshly called for not only his removal but also his “indictment” at GM’s June annual meeting – and carrying out his turnaround strategy while fending off myriad pressures from outside sources.
In the past year, Wagoner has implemented an unprecedented series of cost-cutting measures. He has sliced payroll by a third and announced plans to close 12 plants in North America, while still preserving peace with the United Auto Workers union.
The exodus includes 4,600 workers accepting buyouts and 30,400 retiring, reducing the auto maker's U.S. hourly manufacturing workforce by 28%, and enabling GM to exceed targeted manufacturing job cuts of 30,000 two years ahead of schedule.
Wagoner also has won major concessions from workers and retirees on health care and appears to have diffused a burgeoning crisis at bankrupt supplier Delphi Corp.
All told, GM has cut $9 billion in expenses this year and expects to save $8 billion annually in structural costs beginning next year. It is miles ahead of cross-town rival Ford Motor Co. in terms of getting right-sized for the brutally competitive North American market.
While Wagoner is far from out of the woods, there has been encouraging news lately. GM surprised Wall Street by earning $1.15 billion in operating profits during this year’s second quarter.
Whether he succeeds or fails, Wagoner likely will be remembered as a pivotal figure in GM’s history. He will either be the guy who saw the world’s largest auto maker sink to also-ran status under his watch, or the CEO responsible for engineering one of the greatest industrial turnarounds in recent history.
In such a pressure-cooker environment, what is he like to work for?
“I think he’s far and away the best boss I’ve ever had,” says Bob Lutz, whom Wagoner recruited in 2001 to head GM’s product development, while conceding the two do not always see eye-to-eye.
“We’re 90% aligned and 10% not, but we can have a healthy discussion” and reach agreement, Lutz says.
Wagoner played freshman basketball (forward) at Duke University and remains an avid basketball fan. His spacious office at GM’s headquarters in Detroit’s downtown Renaissance Center is loaded with commemorative basketballs, although he no longer has much time to shoot hoops.
He still is a sports junkie and reportedly follows Duke basketball wherever he travels worldwide.
Born in Wilmington, DE, Wagoner was raised in a middle-income family in Richmond, VA. The late George senior, who died in 1998 during GM’s 54-day strike in Flint, MI, was an accountant for Richmond-based Eskimo Pie.
His mother, Martha, was a teacher before his older sister, also named Martha, who is two years older, was born. His sister Judy is 10 years younger.
The family was close, and his parents “felt we had capabilities and that we should use them,” Wagoner says. “There were very high expectations whether it was at school of whether it was personal integrity and stuff like that,” he says. “So those kinds of values definitely stuck with us.
“My Mom was a very strong influence, but they both were very supportive. They were at every sporting event (in which he participated). I’m not sure today if she understands basketball that well, but she was very vocal with the refs,” he laughs.
Wagoner said becoming chairman of GM one day never entered his mind. “Like every young boy, I was really interested in cars. Back then you’d always ride in the school bus and count how many Chevys and Fords” were on the street. “We didn’t have many Cadillacs around. I wasn’t sure what I wanted to be when I was a kid. I thought I was going to play in the NBA.”
Wagoner excelled in sports at the John Randall Tucker High School in Henrico County in suburban Richmond, playing basketball and football and running track. “I was an end – 6-ft., (1.8 m) 150 lbs. (68 kg)” as a freshman. “I was the skinniest guy around.”
He gave up football, however, began concentrating on basketball, where he was a forward, and stuck with it throughout high school.
Wagoner shot up 4 ins. in his teens and today still is a trim 6 ft. 4 ins. (1.93 m). Typical of his keen sense of humor and easy wit, he says, “At least I was 6-ft.-4 in. before the news coverage started two years ago. Now I’m 5-ft.-9 in. (1.76 m) and shrinking.”
He’s philosophical about his treatment in the media, though. “I guess it comes with the turf. It doesn’t help to worry about it. I’ve just tried to stay focused doing what’s right for GM and the future of the company, and the rest will work itself out.”
After high school, Wagoner’s basketball prowess elicited interest from some smaller colleges and “moderate” interest from larger schools, but he already had decided to try a “mainline” university and looked at Duke, Davidson and the University of North Carolina.
His late father graduated from Duke in 1950, “so I had been somewhat brainwashed,” he quips. Duke offered a partial academic scholarship but not an athletic scholarship.
When he arrived in Durham, he joined Duke’s freshman basketball team.
“I had a great experience, but after that I decided it was pretty clear I wasn’t going to make it into the NBA,” he says.
Wagoner maintains close ties to Duke and has two season tickets to basketball games, which he rarely has time to attend, and counts storied Coach Mike Kryzyzewski (Coach K.) among his heroes.
Others include the late GM Chairman Thomas A. Murphy and President Elliott M. (Pete) Estes, who were “stars” when he joined GM in 1977; John F. (Jack) Smith Jr., his predecessor as chairman and arguably his chief mentor; Larry Bossidy, former General Electric Co. vice chairman and retired Honeywell International Inc. chairman; and Jack Welch, GE’s legendary leader.
Wagoner did enough learning to graduate from Duke with highest honors – summa cum laude (“with highest distinction”) and with a Phi Beta Kappa key for good measure, but he never talks about those honors. “I don’t think it matters today. What matters is the kind of job we do.”
After graduating from Duke in 1975, Wagoner applied to several business schools to seek his MBA and chose Stanford but had to wait to get in. Instead he was accepted at Harvard and received his MBA in 1977.
“I had a handful of offers,” he says. “I was generally interested in corporate-type jobs as opposed to banking or consulting” and looked at several companies, including Eli Lilly Co. and Burlington Industries.
He chose GM, starting in its treasurer’s office in New York City because “obviously it was a terrific company and had more interesting products. So it was a reasonably easy choice, complicated by only one factor, which was I had no interest in living in New York.”
It may have helped that Kathy Kaylor, a co-ed from Lakewood, OH, whom he’d dated at Duke, also wound up in New York in 1977 as an employee benefit consultant. They were married in 1979 and have three boys: “Trip” or G. Richard Wagoner III, 22; Scott, 20; and Matt, 16.
The Wagoners settled in Scarsdale “in the worst house in town” and were in the midst of “massive renovations” when he was tapped in 1981 to move to Brazil as treasurer of GM do Brasil Ltda. He was only 28.
“I’m thinking that sounds like a stretch,” he says, but his wife was all for it. From then on Wagoner shot up through GM’s executive ranks, assuming major posts in Detroit and a total of 11 years outside the U.S. He took over as president and managing director in Brazil in 1991 after high-level stints in Switzerland and Canada.
Critics underscore GM’s looming troubles have clearly piled up during Wagoner’s tenure as chief operating officer and CEO, and that he has been too cautious and conservative in addressing them.
“As far as big moves go, I don’t think we’ve been shy. Look at what’s happened over the last year and tell me the last time anyone has made the changes we’ve had. And have done it very importantly in a way that leads to a sustainable business, because we’ve had to do some tough stuff with the unions. It has taken longer to get it done, but I think it has been respectfully done.”
Did GM lose its way over the last 10 years?
“Sometime people are not very realistic about how you change a business that has been around 100 years, and that you want to be around (another) 100 years,” Wagoner says.
“With the benefit of hindsight, would we have done some things differently? Sure. But we’ve had some substantive issues we’ve been trying to address,” such as health care, which “has been around for 50 years.”
Playing a key role in healthcare and other issues impacting GM’s salaried workforce is Kathleen (Katy) S. Barclay, vice president of global human resources, whom GM insiders say is one of Wagoner’s closest confidantes.
“I’ve worked with Rick for 10 years, and I’ve seen a steady leadership style that drives his strategy,” she says. “His confidence reaches out to the rest of us. What you see with him is what you get; there’s no B.S.,” she says.
“As serious as our problems have been, he’s never waivered in his commitment to employees. People can see that, and that translates into legendary loyalty. We have a cadre of leaders worldwide, and despite the tough days very few have left.”
Barclay likens Wagoner to an orchestra conductor trying to get the best from a diverse group of specialists. “He has his back to the audience and lets the players excel. He doesn’t like center stage,” she says, but he’s not shy.
“That’s just the way he’s wired,” Barclay adds. “There are very few ‘I’s’ in his vocabulary.”
