Wagoner is King in GM/UAW Talks

John D. Stoll writes a typically fine feature article on the talks between the UAW and portfolio holding General Motors (GM). Focusing on GM's Chief Executive Rick Wagoner, the piece gives the impression that he may be in the driver's seat in the negotiations:

Mr. Wagoner's trademark low-profile style has served him well as he tackled that challenge mostly behind the scenes, lunching with top union officials, including Mr. Gettelfinger, on several occasions to explain the issues facing the business.

In the beginning of 2005, Mr. Wagoner's proficiency in the art of negotiation came under the spotlight as he took the unusual step of publicly demanding health-care cost cuts in the middle of an existing contract. GM had abruptly fallen into red ink as demand for the company's most profitable sport-utility vehicles slowed in the U.S. After a summer of negotiations, GM cut a deal saving the company billions, while forcing UAW members to take relatively modest benefit cuts. The UAW soon made similar concessions to Ford but refused to do likewise for Chrysler.

Meantime, GM has already begun using its expanding global footprint as a negotiating tool with the UAW. Mr. Wagoner, who early in his career told superiors he wasn't really interested in working in international operations, is now looking at India as the company's next frontier, following success in Brazil, China and Russia.

At the end of the article, Stoll reports that by decade's end GM will be able to build the majority of its major American products outside the US. Thereby diminishing the union's power to strike in the next round of contract talks.

I have always been an agnostic on getting rid of Wagoner. Even at the height of Kirk Kerkorian's alleged drive to bring in Carlos Ghosn. My belief was that getting rid of the CEO might make shareholders feel good, but maybe not much else. And I felt GM needed more time (supertankers don't turn on a dime), and more cost-cutting.

GM could still end up a lousy investment. But Rick Wagoner certainly looks better now that he did a 18 months ago. I wonder how he'll look two or three years from now?