On March 29, 2009, Rick Wagoner, the chairman and chief executive of troubled auto giant General Motors (GM), resigns at the request of the Obama administration. During Wagoner's more than 8 years in the top job at GM, the company lost billions of dollars and in 2008 was surpassed by Japan-based Toyota as the world's top-selling maker of cars and trucks, a title the American automaker had held since the early 1930s.
G. Richard Wagoner Jr., who was born on February 9, 1953, spent his entire career at GM. He went to work for the company after graduating from Harvard Business School in 1977, eventually becoming president of GM in 1998 then chief executive in 2000. As chief executive, Wagoner undertook some restructuring measures, including shrinking the size of the work force, shuttering plants, ditching the money-losing Oldsmobile brand and working to slash enormous health-care costs for GM retirees. However, critics charged that GM was slow to innovate and in recent years the company continued to focus on its small trucks and sport utility vehicles even as gas prices soared and consumer interest shifted to smaller, fuel-efficient cars and hybrids. In November 2008, Wagoner was sharply criticized by the public for flying to Washington, D.C., on a private corporate jet to ask Congress for a bailout loan. (The CEOs of Chrysler and Ford were also knocked for taking private planes to the congressional hearings.) Nevertheless, the following month, GM, which had been hard hit by the global economic crisis and slumping auto sales, received $13.4 billion in federal aid.
On March 30, 2009, the day after the White House announced Wagoner had been asked to step aside, President Barack Obama stated that GM would have to undergo a fundamental restructuring in the next 60 days in order for the government to consider loaning it any more money. On June 1, 2009, GM filed for Chapter 11 bankruptcy protection.
Bankruptcy was a move once considered unthinkable for the company that was founded in 1908 and became a giant of the U.S. economy in the 20th century. GM pursued a strategy of selling a vehicle "for every purse and purpose," in the words of Alfred Sloan, who became president of the company in 1923 and resigned as chairman in 1956. By its peak in 1962, GM produced 51 percent of all the cars in the U.S. However, according to The New York Times, during the 1960s the automaker "began a long and slow process of undermining itself" as it failed to innovate fast enough in the face of competition from foreign car manufacturers.