Why is Honda's CEO out, but GM's is in?

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There's been a lot of talk about how bad corporate governance is in America -- especially at the Detroit automakers.

What about Japan? Honda Motor Co. (HMC) announced this morning that CEO Takeo Fukui is being replaced by Takanbu Itu. Why the shake-up?

The Associated Press reports that "Honda appears to be sending a message of its determination to turn a new leaf and press ahead with technological innovations -- its longtime strength -- and aim for a turnaround."

Turnaround? Honda expects to report a profit of $856 million for the fiscal year ended March 31st. True: It's not as profitable as Honda has been in past years, but it's an unprecedentedly bad auto market. This isn't the billions in losses that General Motors (GM) has been reporting every quarter for as long as I can remember.

The chart at right tells you pretty much all you need to know about GM's corporate governance compared with Honda's. Over the past five years, shares of Honda are up about 15 percent. Shares of GM are down more than 90 percent. The loss could be a 100 percent by the time this is over.

And yet GM CEO Richard Wagoner still has a job. Can someone more sophisticated than I am please explain to me why that makes sense?

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