Wagoner Had Been Prepared to Resign on Vote

General Motors Corp. Chief Executive Rick Wagoner was willing to resign if he did not win a vote of confidence from the board of the hard-pressed U.S. carmaker, an industry newspaper reported Monday, a move analysts said underscored the pressure on the beleaguered executive.

GM’s board expressed its confidence in Wagoner in a statement last week in which it had approved the sale of a controlling interest in the company’s financing arm, GMAC.

Wagoner had been prepared to resign had he not received that unusual show of public support from the board last week, Automotive News reported.

The paper quoted an unidentified person familiar with the board’s deliberations as saying Wagoner had asked the board for a vote of confidence. A GM representative was not available to comment. Analysts said that Wagoner’s reported offer did not reduce the pressure on him from the board or investors.

Wagoner, 53, has drawn praise from analysts, dealers and board members for his commitment to turning around the world’s largest automaker with minimum disruption as it slashes costs and shuts plants.

But some critics say that same trait has kept GM from moving with the speed it needs to shake free from a deepening sense of crisis after a $10.6-billion loss in 2005.

GM has been struggling with high labor costs, a disclosure of accounting errors and the loss of U.S. market share to foreign rivals.

Argus Research Group analyst Kevin Tynan said the endorsement from GM’s board did not relieve pressure on Wagoner. Tynan, like some other analysts, believes the company eventually will be forced to file for bankruptcy protection. “The gap between what the company needs and what the union is willing to give is so massive that, at some point, it all has to come to a head in Bankruptcy Court,” he said.

Separately, GM disclosed Monday that its GMAC finance unit might sharply reduce its payments of dividends and other cash to GM over the next five years after the automaker sells a majority of the business.

Last year, GM received a $2.5-billion dividend from GMAC. If the new formula were applied to GMAC’s $2.4 billion in 2005 net income, GM would receive about $689 million in each of the first two years after the sale and $1 billion in each of the subsequent three years.

Wagoner is giving up half of the future profit of GMAC to help pay for a North American restructuring. As part of the sale, GM agreed its liabilities to GMAC would be less than $400 million when the deal was complete and be capped at $1.5 billion in the future.

GMAC payments to GM after the sale will include a reduced percentage of the unit’s profit added to a 10% yield from GM’s $1.56 billion in preferred shares, according to a Securities and Exchange Commission filing. They also will include royalties of about $25 million annually for use of certain GM trademarks. GMAC will pay $75 million to assure it is the exclusive provider of GM incentive programs.

The payments could be reduced, either with GM’s permission or if the payments would risk cutting GMAC’s capital levels, according to the filing.

GM shares fell 11 cents to $19.40.