After billions of federal bailout dollars put President Barack Obama in the automobile industry’s driver’s seat, the clear message from the commander in chief is, “Shape up or ship out.” For starters, Obama forced the resignation of General Motors Chairman and CEO Rick Wagoner, saying GM’s restructuring plans are not strong enough and that the auto industry isn’t moving fast enough in the right direction to succeed.
Several of the country’s largest black-owned companies supply parts for U.S. automobile manufacturers or sell American-made vehicles in franchise dealerships.Â What do they think will result from the President’s awe-inspiring take-charge actions?
GM is one of the largest customers for Detroit-based Bridgewater Interiors L.L.C. (No. 3 on the B.E. Industrial/Service 100 list with $1.3 billion in revenues). The firm manufactures car seats and overhead systems. CEO Ronald E. Hall says Wagoner has been a good friend to Bridgewater and a champion for minority suppliers, supporting diversity in GM’s purchasing practices. Hall believes, however, that Wagoner represented the consensus thinking at GM.Â His exit hopefully will not endanger GM’s commitment to its supplier diversity program.
“I don’t think how they do business is necessarily going to change because of his ouster,” says Hall, “but it certainly sends a message, particularly to the bondholders and the United Auto Workers union (UAW), which we understand have been stumbling blocks to coming up with an acceptable plan between the government and General Motors. Clearly, it does say there needs to be change, and the expectation is that everybody needs to come to the party, [and that] nobody’s untouchable.Â So to that degree, I’m thinking it’s more of a symbolic message.”
General Motors is also a customer of Troy, Michigan-based TAG Holdings L.L.C. (No. 6 on the BE Industrial/Service 100 list with $605 million in revenues). TAG Chairman and CEO Joseph B. Anderson Jr., says Wagoner’s departure will not have any direct bearing on the future of his manufacturing business.
Unlike Hall, however, Anderson does believe that because leadership guides and directs a company, GM’s change at the top will affect the company’s practical operations. “I think it will have a substantive impact,” Anderson says. “I’ve known Rick Wagoner and worked in General Motors with Rick Wagoner.Â I like him, respect him, and regret that it had to happen this way.”
The president also put bankruptcy on the table as a further detour for GM and Chrysler L.L.C. Considering that GM is a key customer for his firm, Bridgewater CEO Barima Opong-Owusu says, “We have a lot of receivables tied up. We bought materials, we produce the parts, we ship to General Motors, and so we are hoping that they can be viable and continue to pay us so that we don’t have to lay off all of our 1,500 employees. Obviously, GM bankruptcy is not a choice that we are hoping for.”