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expatriate's picture
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New Precedent for Government Intervention

The War on Capitalism continues. This seems a little ironic to me -- the people who were so upset about a president firing politically-appointed attorneys general are apparently OK with him using his power to fire someone in private business.

I'm not a fan of GM's management -- but CEOs should serve at the stockholders' discretion, not the president's.

http://online.wsj.com/article/SB123841609048669495.html

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Re: New Precedent for Government Intervention
expatriate wrote:

I'm not a fan of GM's management -- but CEOs should serve at the stockholders' discretion, not the president's.

http://online.wsj.com/article/SB123841609048669495.html

Great article ex, thanks for posting.

I could not agree with you more. The Government has no business getting that involved in the running of a Private Business.
Apparently the Board of Directors were not with the program of the President and his "Task Force" either as they are being replaced also, according to the article.
A little research on this Steven Rattner fella shows that he is an Investment Banker, (anyone else see the irony in this?) and his wife, Maureen White was once national finance chairman of the Democratic National Committee.
It appears to me that Mr. Rattner is a power hungry little weasel whose life ambition was a corner office on Wall Street or on Capitol Hill.He certainly came to the right place for some power, now what will he do with it and how far will he go.

This country may just parish from the earth if this crap continues.

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New Precedent for Government Intervention

I must admit to having mixed feelings on this issue. On one hand if you take someone's money, they have the right to hold you accountable for how you spend it. On the other hand I believe Government has no place running private business and the prescedent is in fact dangerous and bad for America. This would be disturbing in any administration but more so in the current one given their already socialst leanings. I can certainly understand where business needs to be held to a certain standard when they've taken billions in public funds but do we really want Pelosi, Frank, Obama (or for that matter Republicans) hiring or firing CEO's and making day to day decisions like this? Some accountability needs to be in place but how much and where does it stop? i don't have the answer.

expatriate's picture
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New Precedent for Government Intervention

That's what I like about Ford -- they saw the writing on the wall, turned down the money, and insulated themselves from extortion. How much you wanna bet the administration will start dictating what kinds of cars GM and Chrysler build, now that they have them over a barrel?

Chrysler's bigger problem, IMO, was merging with Fiat -- that won't help their US sales.

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New Precedent for Government Intervention

There has always been a certain amount of accountability demands and control exerted by lenders. Ask any business that borrows money from a bank what they have to go through, and its not a one time deal. Every year (and sometimes even monthly or quarterly) they demand to see your records, balance sheets, and even personal tax returns. So since the government is the "banker" they believe they have the right to exert some level of control. Is it right, no of course not. But I don't think its right that the government is involved in lending and giving money to businesses either.

The person or entity exerting the control must be knowledgeable in the operation of that specific business. Just like a bank that looks at businesses' books, if they don't understand what they're looking at, they can't make good decisions or even assess the health of a business. I do not believe the government understands the automobile industry, but then I don't think that GM seems to understand how or why they got into this boat either.

GM and Chrysler should have gone into bankruptcy, just like the airlines have in the past, and let knowledgeable people help with the reorganization - not the government! The really bad part is that GM very likely will be forced into bankrupcy anyways, in spite of all the money pumped into it. And what's this plan about purging all of its "bad" debts? Does that mean the taxpayer picks up the tab on that too?

And I do smell a rat with Rattner! He doesn't know a thing about the auto industry.

expatriate's picture
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New Precedent for Government Intervention

This is why GM is doomed. The administration has fired its CEO, given its new CEO 60 days to restructure, and now come out with this. An administration stuffed with academics and led by a guy with a sum total of two months of executive experience has decided that it knows more about building and marketing cars than GM. Among its chief complaints? GM is lagging Toyota in "green" technology. Just how important does the government think "green" technology is to prospective car buyers in this country?

Note the part about the need to get away from large vehicles and focus more on smaller cars. What do you think the chances are that the administration will direct GM to start building cars to suit its political agenda, rather than what the market wants?

http://wot.motortrend.com/6502019/government/government-report-chevy-vol...

This is what happens when Socialists build cars:

http://www.team.net/www/ktud/trabi.html

expatriate's picture
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New Precedent for Government Intervention

Apparently, Geithner likes the taste of power because he's leaving his options open to fire more CEOs in the future.

http://www.cbsnews.com/blogs/2009/04/01/business/econwatch/entry4911030....

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New Precedent for Government Intervention
expatriate wrote:
Among its chief complaints? GM is lagging Toyota in "green" technology. Just how important does the government think "green" technology is to prospective car buyers in this country?

Note the part about the need to get away from large vehicles and focus more on smaller cars. What do you think the chances are that the administration will direct GM to start building cars to suit its political agenda, rather than what the market wants?

Toyota is not a Union shop. A Union shop will never be able to keep up at the bottom line with a non Union shop so going "green" will not help them.

What I find odd is that every other vehicle I see on my twice daily 1.5 hour commute is a GM truck or SUV. That is what the people are buying and buying a lot at least in Florida, Alabama, Georgia and Tennessee which is where most vehicles seen here are from.
I heard that GM is bringing back the Camaro.

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