This is your government speaking.
Today, we the United Soviet Socialist States of America have decided to change management at GM. We have reserved judgement at Chrysler. Their CEO hasn't been with them long enough yet.
http://online.wsj.com/article/SB123841609048669495.html
Also, as I'm sure your taxes will reflect in the times to come, you will recall that we had diligently deliberated over the course of a few days, and decided to pour billions of your tax dollars into these companies already. Well, after more careful analysis, we have now decided that it may just be a good idea to let them go bankrupt, anyway. We understand this may be upsetting to you, but rest assured that our President, Comrade Obama, is as upset about this development as you are.
No comments, please. We know what we're doing.
(Any dissent on your part will be met with immediate vilification, ostricizing, and outcasting. When we get to promulgating the next set of federal regulations, they will include a provision to allow us to exile you to a labor camp, too.)
This is Konny speaking.
My esteemed colleagues of the former Constitution-based U.S. of A., I have some troubling observations.
1) I don't know Rick Wagoner from a hole in the wall. So it's not about him personally. But last I checked, it was the role of the Board of Directors of a company to oust a CEO, not the U.S. government or the President of the United States. This is a whole new lunge into the red new world.
2) If the government is worried about GM's biz plan, and goes so far as to oust the CEO, why don't they revamp their own emissions regulations that make compliance for the auto-makers so costly? That would save billions.
3) Why doesn't the government also deal with the labor unions, together with all the legacy financial sink-holes that exist for their benefit? That would save billions, too.
So ask yourself: If our government is willing to interfere so intrusively in business by ousting the CEO of a company and making further management changes, but does nothing about the government's own regulations or about labor unions, what does all this smell like?
I always did muse at the fact that the Chrysler symbol looked so much like the soviet mark of quality.
Today, we the United Soviet Socialist States of America have decided to change management at GM. We have reserved judgement at Chrysler. Their CEO hasn't been with them long enough yet.
http://online.wsj.com/article/SB123841609048669495.html
Also, as I'm sure your taxes will reflect in the times to come, you will recall that we had diligently deliberated over the course of a few days, and decided to pour billions of your tax dollars into these companies already. Well, after more careful analysis, we have now decided that it may just be a good idea to let them go bankrupt, anyway. We understand this may be upsetting to you, but rest assured that our President, Comrade Obama, is as upset about this development as you are.
No comments, please. We know what we're doing.
(Any dissent on your part will be met with immediate vilification, ostricizing, and outcasting. When we get to promulgating the next set of federal regulations, they will include a provision to allow us to exile you to a labor camp, too.)
This is Konny speaking.
My esteemed colleagues of the former Constitution-based U.S. of A., I have some troubling observations.
1) I don't know Rick Wagoner from a hole in the wall. So it's not about him personally. But last I checked, it was the role of the Board of Directors of a company to oust a CEO, not the U.S. government or the President of the United States. This is a whole new lunge into the red new world.
2) If the government is worried about GM's biz plan, and goes so far as to oust the CEO, why don't they revamp their own emissions regulations that make compliance for the auto-makers so costly? That would save billions.
3) Why doesn't the government also deal with the labor unions, together with all the legacy financial sink-holes that exist for their benefit? That would save billions, too.
So ask yourself: If our government is willing to interfere so intrusively in business by ousting the CEO of a company and making further management changes, but does nothing about the government's own regulations or about labor unions, what does all this smell like?
I always did muse at the fact that the Chrysler symbol looked so much like the soviet mark of quality.

It doesn't make a lot of sense to me to oust the guy that has been in the company for over 30 years. I would think that to go through an orderly bankrupcy no one is more qualified to understand the issues troubling the company more than Rick Wagoner. To me this is purely a political play to show the country that we are taking care of those "bad" CEOs that got us in trouble.
ReplyDeleteWhile I don't think that the government should be getting involved in ousting CEO's of companies, I read an article about Wagoner over the last day or 2 that points at the fact that maybe he is not the guy most qualified to carry the company through the current turmoil. I am sure this is just one of many views on the guy. I am also sure that he still has a lot to contribute to GM. But as per the article, he was a little too reluctant to make the tough changes that GM really has needed to make and for a long time. Article listed here: http://money.cnn.com/2009/03/29/news/companies/motor_world.fortune/index.htm?postversion=2009032920
ReplyDeleteI appreciate the opinions on whether or not Wagoner should have been ousted, but if you've focused on that for more than a second, then your attention has been successfully diverted away to the red herring. Wagoner is irrelevant. Watch what our government is doing. This will be difficult, if not impossible, to undo later. It is the drastic erosion of capitalism right before our eyes. Already businesses are leary of taking any money from the government in fear that they will then be ruled by the government. And lest you think that like any major investor, this investor should have the same rights, the government is NOT an ordinary investor, but rather a completely different animal.
ReplyDeleteHere's a zinger from Reuters this morning, titled "Obama to Automakers: It's My Way or the Highway":
"In addition, Chrysler must merge with Fiat by April 30, Obama said."
http://www.reuters.com/article/bigMoney/idUS118748959020090331
Now BO is the CEO of Chrysler? I don't remember that being on the voting ballot. I wonder what the real CEO of Chrysler has to say about this.
The President of the United States is deciding who a company should merge with, whether it should go bankrupt, and under what circumstances. This is very disturbing!
I am certainly not for government controlling certain outcomes. What I will say is strictly from a standpoint of devil's advocate. Let's look at this another way. When the stumulus for banks went out, people got angry with the bonuses and said that the government should have seen it coming. Ok, in order to preserve the investment in what the People are going to give to Detroit, they want to ensure some success in a different approach to the business model. I am sure Rick Wagoner could have stayed if he wanted to. But he decided to step aside in the best interest of the company's survival. He sacrificed himself. I am definitely against the government dictating certain specific details to companies. I am ok with making suggestions that change in the business model is required or else that investment money will be lost along the way as well. Unfortunately the government is the last line of defense for Detroit. No one else is able to hand out the kind of money they need so a beggar can't be a chooser.
ReplyDeleteOn this one I must say I kind of agree with both Konny and Vadim. A beggar can't be a chooser, this is true. I don't know the details of the merger bet Chrysler and Fiat but assuming that it's a necessary deal I don't feel the President should be the one pushing the agenda forward in the media. Furthermore, I think it is very dangerous for the government to be publicly dictating what car companies should be doing, especially the President. Yes the government may have to push these companies to do "the right thing" but I think it should be behind the scenes not in the forefront. As far as Wagoner goes, I think it's very simple, it's a message sent to all car companies and their CEOs, "It's my way or the highway"
ReplyDeleteas much as dislike Obama and his "financial advisers", the move of removing rick wagoner is totally justifiable. have you ever heard of Carl Icahn? he has changed management at a few companies after buying enough shares. as soon as you become majority shareholder of any public company your voice could be very decisive one. GM took government money, therefore it's up to a major shareholder to impose their will. Its not like Obama removed CEO of IBM or Prudential, right? Not sure what all this fuss is about. Wagoner is really bad, did not want bankruptcy protection supposedly because no one would buy a car from bankrupt company? guess now, back to square one.
ReplyDelete