The Five Dumbest Things on Wall Street: March 7

2. GM On the Fritz

Typically, a major U.S. company in the midst of a do-or-die restructuring will leave a few key roles open in its top executive ranks for extended periods of time, just to give everyone some room to breathe and perhaps exercise a few stock options.

That's why investors were puzzled this week when General Motors GM named its chief financial officer, Frederick "Fritz" Henderson, as its new president and chief operating officer, positions that had previously gone unfilled. What was the board of directors thinking?

GM's leading director, George Fisher, told the Wall Street Journal that the change is "really a continuation of what we've been doing."

Phew. With GM's stock price down 27% for the past year, its 49%-owned finance business in turmoil and its U.S. sales in decline amid soaring gas prices and the threat of a consumer-led recession, the last thing investors want is for GM to tinker with its winning formula.

In his new role, Henderson will have command over the day-to-day operations of the company's global auto operations. For his part, GM CEO Rick Wagoner will have more free time now to roam the earth and lobby governments on behalf of GM's sacred right to lag its Asian-based competitors in fuel efficiency in addition to sales performance and profitability.

While acknowledging that GM's top executives have been "somewhat stretched," Wagoner told the Journal that the change had nothing to do with the fact that he's the worst-performing CEO in GM history. He said it was "something I'd been thinking about for a while and talking to the board about."

Perhaps that boardroom chat began back in 2005 when Wagoner predicted GM would earn $4 to $5 a share for the year, only to later wind up with a loss of $10.6 billion.

Or maybe it began a year later after Wagoner won a boardroom battle to protect his job by convincing directors to side with him over billionaire investor Kirk Kerkorian, who wanted to merge GM with Carlos Ghosn's Renault-Nissan. Since then, GM shares have lost one-third of their value.

Kerkorian's representative on GM's board, Jerry York, resigned his seat after the battle and sent a scathing letter to the company that questioned whether the fundamental problems with GM's business model were being addressed in its turnaround.

York said he did not find "an environment in the board room that is very receptive to probing much beyond the materials provided by management." He wasn't criticizing Fisher, was he?

"I have never felt so good about the direction of GM," Fisher told the Journal this week.

Dumb-o-meter score: 91. No, I didn't think so.