CEO Interview: GM's Rick Wagoner

RICK WAGONER ISN'T hard to recognize. At 6-foot-4, the former Duke University basketball player has graduated to chief executive of American icon General Motors (GM). Even so, as he strides through a lobby showcasing dozens of GM's newest models toward his office in the glass skyscraper of Detroit's Renaissance Center, he pauses to flash his badge to the security guard.

By most measures Wagoner shouldn't even have a badge to flash. Who isn't familiar with the trials of GM? The automaker logged its biggest loss ever last year, $39 billion — that's a loss of more than $100 million a day. GM's share of the U.S. auto market continues to slide, now down to 24 percent, as foreign rivals keep up their relentless assault. And the stock has tumbled so far that its market value is a fraction of its former self, at $12 billion.

But Wagoner is still hanging on, and his fans say the 55-year-old's management style may be one reason there hasn't been a mutiny. In an industry known for limelight-craving chiefs who rule by fiat, the Virginia native has hired people who have garnered some attention, like design maven Bob Lutz. It also helps that Wagoner has scored some victories — historic ones, even. After decades of drowning in wage, health care and pension costs, Wagoner won significant relief from the United Auto Workers, saving $4 billion to $5 billion in future costs. And after years of promises of better cars, GM has introduced legitimate winners, like the Chevy Malibu, recently named "North American Car of the Year" by automotive journalists.

With all the challenges facing you, what tops your priority list?

We need to drive revenue growth. Frankly, that's hard to do in a weak market, but that's what is really going to emphasize the extent of the changes we made and translate our improvements in products, quality and manufacturing into better financial results.

How do you do that?

We've cut $9 billion in fixed costs through plant consolidation and job cuts, and think we can cut another $5 billion or so over the next three years with lower health care, pension and labor costs with the new United Auto Workers agreement.

A lot of people are talking about a U.S. recession. Can the great American automaker still turn things around?