G. Richard Wagoner

G. Richard Wagoner (born 1953) made corporate history in 2000 when he became president and chief executive officer (CEO) of the General Motors Corporation at the age of 47. The appointment made Wagoner the youngest person to head GM, the world's largest automaker, since Billy Durant, who founded the company in 1908. Upon taking the reins at GM, where he has been employed for his entire career, Wagoner instituted several business–side innovations that have increased the company's competitiveness in the world market.

Wagoner was born on February 9, 1953, in Wilmington, Delaware, and grew up in Richmond, Virginia where his father, George, worked as a mid–level executive for the Eskimo Pie ice cream company. The younger Wagoner (the G. in his name stands for George) served as student body president while in high school. After graduation, he attended Duke University, his father's alma mater, in Raleigh–Durham, North Carolina, where he played forward on the basketball team during the 1971–72 season. He was elected president of his fraternity and graduated summa cum laude and Phi Beta Kappa in 1975 with a degree in economics. Wagoner proceeded immediately to Harvard University's Master of Business Administration (MBA) program, from which he graduated in 1977.

Joined General Motors

General Motors Corporation's New York treasurer's office hired Wagoner after he received his MBA, and the young financial analyst immediately demonstrated a talent for numbers that surpassed many of his peers. "He was one of the top two or three analysts out of about 40 or 50," recalled John Finnegan, head of GM's finance operation, in a 2002 article in Fortune. In 1981, Wagoner took a position as treasurer for GM do Brazil, where he was quickly promoted to chief financial officer. Wagoner received hands–on training in corporate management and learned to speak Portuguese, spending six years with the division. "It was a big step and an unbelievable opportunity to go from being a money guy to being in the middle of running the business," he told Fortune.

In 1987, he transferred to GM Canada, where he served as vice–president and finance manager for a year, and then director of strategic business planning for the Chevrolet–Pontiac–GM Canada group for another two. He was promoted to vice–president in charge of finance for GM Europe in Zurich, Switzerland, in 1989 and, that same year, was named to GM's board of directors. While in Zurich, Wagoner helped engineer the purchase of half of the Swedish automaker Saab. Wagoner returned to Brazil in 1991 as managing director of GM do Brazil. He remained there for 13 months, implementing global purchasing and cost–cutting programs and improving the company's operations. He was one of only two top executives to be awarded a bonus that year, a testament to the success of his efforts.

Named CFO, COO

Wagoner had never worked at GM's Detroit, Michigan, headquarters until 1992, when he was named the company's chief financial officer at the age of 39. "He was young, but it didn't worry me," then–CEO Jack Smith told Fortune. "It was an easy call." The following year, Wagoner also took charge of GM's Worldwide Purchasing Group, and in 1994 he was named president of the company's North American Operations, a position that was considered second only to the CEO. Wagoner faced numerous challenges in this position. At the time he took the post, GM made less per car than any other major automobile manufacturer, earning only half the profit per car as Chrysler. It had been losing market share in the United States almost every year since 1962 and neared bankruptcy. The company "possess[ed] a legacy of inefficiency few corporations can rival," asserted industry analyst Scott Hill in Fortune.

Wagoner began to implement cost–saving changes, such as unifying engineering and manufacturing systems to increase both productivity and quality. In addition, he convinced the company to assemble cars on a limited number of platform types worldwide, championed the development of an Internet–based purchasing system for suppliers, streamlined the product oversight system, and attempted to improve labor relations. He also, by his own admission, made some mistakes, including angering GM dealers by forwarding a plan to buy some of them out. "I learned a lot," he told Fortune. "Having your key constituents mad at you is not the way to be successful."

Took the Helm

GM's board was more focused on Wagoner's successes however, and in 2000 he was named CEO of the world's largest vehicle manufacturer. The appointment made him the youngest CEO at the company since it was founded by Billy Durant in 1908. Wagoner launched an even more aggressive campaign to streamline operations and boost profitability once he took the helm, approaching his position with a competitor's demeanor. "People here at the Tokyo show have asked me what I think about Big Three market share, and I jokingly say I'm not in charge of Big Three market share. I'm in charge of Big One market share, and our goal is to grow," Wagoner told Fortune in 2003, speaking from the Tokyo auto show. "You have to ask the other two guys what their strategy is. We focus on how we can grow share, and we really don't care who we take it from."

One of Wagoner's first moves was to announce discontinuation of the struggling Oldsmobile line, effective in the spring of 2004. Wagoner drew more positive attention for a daring move in late 2001 when, as the post–September 11 economy slumped, GM announced it would apply zero–interest financing to the purchase of all new cars. The result was a drastic increase in sales that impressed market analysts across the board. "We're not out to take volume by giving cars away but we don't want others to offer greater incentives and take our share," Wagoner told The Guardian of London. In addition, Wagoner introduced changes in the company's management style, including implementing a "Go Fast" program, based on a similar model pioneered at General Electric, whereby bureaucratic holdups are hashed out in group meetings.

He also bucked company tradition and hired outside the GM fold, bringing in Ford Motor Company's John Devine as chief financial officer and Robert Lutz, a former Chrysler executive, as vice chairman and head of product development. "The old model promoted only from within, and today's business world is moving fast," Wagoner told Forbes in 2000. "Bringing in the right people with the right skills and the right chemistry can make a huge difference." The Lutz hire signaled an increased emphasis on contemporizing product design, a mindset that also was underscored by the hiring of former Renault designer Anne Asensio. One of the earliest design experiments was the Pontiac Aztek, a cross between a small car and a sport utility vehicle, which flagged in sales. Wagoner told the Los Angeles Times in 2001 that the disappointment did not temper his plans to champion innovative design. "For years we've been seen as too conservative," he said in a 2001 interview. "So some young designers and engineers really stretch out there, and if it doesn't hit everybody's hot button out on the marketplace, the last thing I want to do is say, 'Don't do that again; let's go back to not letting people express themselves.' I don't want to send the message that we want to stop pushing on the edge."

Wagoner, who did not even have a computer in his office when he moved to GM headquarters, also brought the company into the information age. "The Internet is offering all sorts of capabilities to do things faster, whether it is work with our supply base, deal with the customer in order–fulfillment more aggressively, how we make our own decisions, how we communicate with each other," Wagoner told Forbes in 2000. "We just need to lead in that whole e–business era." To that end, Wagoner oversaw the creation of an online system for processing purchasing orders and the development of an OnStar dashboard communication service, which allows voice–activated Internet connection. The company was also a leader in setting up an online shopping and consumer information site.

Wagoner has placed a premium on creating partnerships with overseas automakers and he has continued to streamline manufacturing processes at home as well. "We are getting the real cost of engineering new products down, for a variety of reasons . . ." he told Fortune in 2003. "We're using our assets better, we're sharing ideas better across the company, and we're putting a premium on reusing good equipment' we don't just throw stuff out." Wagoner is no environmentalist, however. While he has championed the development of oil–saving fuel–cells, a technology that is still in the early research phase, he has vigorously lobbied against government–mandated fuel–efficiency standards.

Even while spearheading big–picture innovations, Wagoner remains hands–on, often making time to crunch numbers like he used to do. Fortune writer Alex Taylor noted in a 2002 article that Wagoner often pores over global production and sales figures. "I have some affinity for numbers and analysis, and I like to know when we're running behind," Wagoner told Taylor. "I don't like it when we don't get the straight scoop. Those are the things that get my ire up quickest." After his first year as CEO, Wagoner expressed relief that the company had turned the tide under his watch. "I'm happy to see some momentum," he told the Los Angeles Times. "We've seen productivity improvement, a lot of our products are hitting well on the market, and the quality trend is good. I feel good for our people who have been under siege for a long time."

Periodicals

Economist, March 18, 2000.

Forbes, May 29, 2000.

Fortune, April 1, 2002; November 24, 2003.

Guardian (London), July 20, 2002.

Los Angeles Times, June 18, 2001.

New York Times, June 7, 2000.

Washington Times, July 31, 2001.