Sunday, March 29, 2009

A big step... the wrong direction!

I took a double-take at that headline. It read,
"GM Boss to Step Down at Request of Obama"

And the story was just as the headline said. Washington is in the car business in a big way.

Here's the scoop: DETROIT (AP)General Motors Corp. Chairman and CEO Rick Wagoner will step down immediately at the request of the White House, administration officials said Sunday. The news comes as President Obama prepares to unveil additional restructuring efforts designed to save the domestic auto industry.The officials asked not to be identified because details of the restructuring plan have not yet been made public. On Monday, Obama is to announce plans to restructure GM and Chrysler LLC in exchange for additional government loans. The companies have been living on $17.4 billion in government aid and have requested $21.6 billion more.

Do you understand the implications here? Putting aside the absurdity that government can manage anything, let alone something as complex and the auto industry, think about the symbolism of nationalizing a car company.

Think of FIAT. Yikes! Think about the stockholders and directors who were shoved aside in this unilateral move by the White House.

Then there is the precedence set here. What if the UAW decides they don't like a CEO somewhere. And so the UAW makes a big campaign contribution (Chicago style) and suddenly the White House removes the CEO. Not a stretch at all, folks.

Wow. This is big.

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