The G.M. Bailout: Giving Credit Where Credit Is Due

Rick Wagoner and Steven Rattner. Which one really saved G.M.?

The New Yorker's Malcolm Gladwell has an excellent review of Overhaul, the chronicle of the G.M. and Chrysler bailouts by former Auto Czar Steven Rattner. But while Rattner views the bailout as a personal triumph, Gladwell finds an unlikely hero in G.M.'s resurgence — the oft-maligned Rick Wagoner. Gladwell writes:

Wagoner was not a perfect manager, by any means. Unlike Alan Mulally, the C.E.O. at Ford, he failed to build up cash reserves in anticipation of the economic downturn, which might have kept his company out of bankruptcy. He can be faulted for riding the S.U.V. wave too long, and for being too slow to develop a credible small-car alternative. But, especially given the mess that Wagoner inherited when he took over, in 2000—and the inherent difficulty of running a company that had to pay pension and medical benefits to half a million retirees—he accomplished a tremendous amount during his eight-year tenure. He cut the workforce from three hundred and ninety thousand to two hundred and seventeen thousand. He built a hugely profitable business in China almost from scratch: a G.M. joint venture is the leading automaker in what is now the world’s largest automobile market. In 1995, it took forty-six man-hours to build the typical G.M. car, versus twenty-nine hours for the typical Toyota. Under Wagoner’s watch, the productivity gap closed almost entirely.