Who’s Really Running General Motors?
Yesterday, General Motors went into bankruptcy. Who made the announcement? The CEO? A company spokesman?
Nope. The President of the United States spoke for General Motors. President Obama, who called a “fiscal responsibility summit” just hours after adding $1.2 Trillion to the 2009 budget deficit, is again trying to have it both ways.
Obama UAW
In a radical departure from his limited, legitimate, Constitutional authority, President Obama used the power of his office to dictate when, and under what terms General Motors would file bankruptcy.
Here’s an excerpt from his remarks, edited, to call attention to the number of times the President spoke in the first person about critical decisions regarding this private business:
Just over two months ago, I spoke with you…and I laid out what needed to be done…I made it clear…I refused to let these companies become permanent wards of the state… I refused to kick the can down the road.. I also recognized the importance of a viable auto industry…
I decided, then, that if GM and Chrysler and their stakeholders were willing to sacrifice for their companies’ survival…the United States government would stand behind them.
GM’s management team…has worked tirelessly to produce a plan that meets the strict standards I laid out at the beginning.
It would seem then that President Obama has personally taken charge of General Motors, would it not?
Later the President asserted:
Throughout this process, I wanted to ensure that none of GM’s stakeholders receives special treatment because of our government’s involvement.
But this contradicts actual restructuring terms, dictated by the President, to favor the UAW. Those include the guarantee that GM will begin to manufacture a small car in what the White House’s own fact sheet calls “a UAW factory” in the US, rather than import cars GM is already building in lower cost foreign plants. Importing those small cars would be much less costly, and would contribute to bringing the company out of the red, into overall profitability, which would serve the interests of all stakeholders, including the government.
Finally, The President sought to reassure us:
What we are not doing — what I have no interest in doing — is running GM. GM will be run by a private board of directors and management team…
But half of those directors will be appointed by the Obama Administration.
They — and not the government — will call the shots and make the decisions about how to turn this company around. The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions.
In all but “the most fundamental decisions?” What’s the difference between that and “the most important decisions?” This portion of the President’s statement obviously contradicts itself.
When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision.
GM’s problem is too many plants. It will not be opening new plants for decades, if ever. The difficult decisions will be about which plants to close. Stand by to see the political calculations that drive those decisions.
The Obama Administration has already thrown the full weight and power of the government into decisions about future models by changing fuel economy standards, a move that will require GM to sell more unpopular, unprofitable small cars, and fewer of it’s most popular, most profitable products, full sized SUVs and full sized pickups.
The US market is already saturated with small, high mileage cars, manufactured all over the world, including here in the US. We don’t see more of them on the road, not because they are hard to get, but because Americans prefer larger cars, even though they cost more to buy and use more fuel. Forcing GM to compete in this overcrowded market segment will only delay, or make impossible a return to profitability.
The Bottom Line
President Obama is trying to position himself to take credit for positive developments – if there are any – while deflecting blame onto others for the consequences of any bad decisions.
It’s time for corporate profits to “take a back seat” to the urgent problems we face today. The frightening effects Global climate change is our punishment for all these years of idiotic waste of resources to power massive hunks of steel, just to go buy a coffee or take a kid to soccer.
And why not give the worker a break for once? Why is it only Wall street millionaires that get government help
TFB –
Take a bath, put your Birkenstocks back on and after eating your bird seed, take a deep breath.
Now. Put your orange juice cans on a string phone together and call Chuck.
Tell us, brain trust………just how is Obama’s GM plan gonna work with you advocating bicycles for all and no soccer moms or Starbucks runs…….or Dunkin Donuts.
I wanna see Obama running on that platform……(snicker)
I have two words for you, aaa again, you probably won’t understand:
Smart Car http://www.smartusa.com/
Again, probably too smart for you. What do you drive?
yeah, the ideal car for guys who hate cars.
What if you have kids genius? Oh, I know, you shouldn’t have kids. bad for your mother earth. But what if you do?
TFB –
Everyday car: Audi A6 4.2
The Mrs: Honda Pilot
Fun: Porsche 911 4S Cab
And understand this: I like to press the accelerator hard, even if its just to the Starbucks.
And not to break your heart. I have a honkin’ big stereo system with a way big amp……….and I leave it on!!! Ahhhhhhhhhhhhhhhh!!!!!!!!!
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The point is Obama is moving the nation in the right direction, away from wasting to conserving. Away from burning oil to alternative energy.
This is not a political issue. It’s a human life issue.
GM will be fine if it shifts to the cars of the future. The Smart car is a prototype.
Its long past time to get serious about cleaning up our act. We just can’t continue to live like there is no tomorrow, pressing that accelerator hard, wasting resources that can not be replaced.
Under the Obama plan we will transition in a way that makes us more prosperous.
“This is not a political issue. It’s a human life issue.”
LOL What a dope. You better hope you are wrong, Flower Power. Because the BRIC’s – Brazil, India, China – have absolutely no intention – not one – of curbing their smokestacks. Not one. So if you believe your hyperbole, you are about to turn into Thousand Weeds Drowning.
By the way, don’t be too vocal about your Obama prosperity through econo-boxes around Ohio, Michigan, Indiana…..there’s some auto workers who will bend, fold spindle and mutilate you.
And laugh while they do it.
I’m gonna go take a ride in the hot-rod now.