The President has just made a very bad mistake in demanding the resignation of Rick Wagoner as Chairman and CEO of General Motors as a condition of further Federal funding.

Mr. Wagoner has spent most or all of a working lifetime at GM. He probably knows all of the nooks and crannies of the company better than anyone alive. He was handed a plate of union contracts hatched decades ago by other top management – contracts not tied to increases in productivity, which have left the company in a very poor defensive position. The Japanese automobile industry was effectively born in 1945, created from a standing start, hobbled neither by ingrained methods of designing and building cars nor by expensive labor contracts. That was the year when GM began sliding downhill, but it knew it not.

It is fair to criticize Mr. Wagoner on the ground of failure of management. It is not fair to demand his resignation as the selected sacrificial goat when looking about the countryside for others who might be considered more worthy.

I doubt that Mr. Wagoner ever got within 10 miles of a credit default swap. I doubt that he ever received a bonus of any kind that was anywhere near so wildly unreasonable as some of the bonuses that have been sprinkled about by AIG – even after receiving billions of dollars in taxpayer-funded assistance. Nor has even one dollar of federal assistance which GM has so far received likely been redirected to the likes of Societe Generale or Goldman Sachs, not revealed until after the fact and then only as a result of some rather determined digging. I feel certain that Mr. Wagoner has always been totally forthcoming with Congress and with the Treasury Department and with the President, which, as it turns out, cannot necessarily be said of some others who have been bailout-blessed.

My impression, from this distance, is that of a man who has given his best to the company he loves – that he has given everything he has within him, and then some. I doubt that there is an ounce of greed in his body. I doubt that he has ever connived, or taken shortcuts, or deliberately jeopardized the present and future health of GM in exchange for personal gain. My impression is that he is a totally honorable man who has done his level best to keep the company going and out of bankruptcy.

On the other hand, some of the financial gunslingers are still out on the range. Compared to GM, AIG is an open maw, a black hole, created by people who produced nothing of tangible value, but plenty of financial skullduggery built on thin air.

The President has sent the wrong message. I have my doubts that the people will buy it. I know I don’t.

William Kurtz

CandleWave