Even though the Republicans’ response to Obama’s auto plan is all over the map, they agree that the firing of General Motors CEO Rick Wagoner is a travesty.
Republicans did agree on one thing — they were uncomfortable with the idea that the White House was ousting Wagoner, the CEO of GM for the past nine years.
“If, in fact, Wagoner resigned because somebody in government said, ‘You have to resign,’ then I think we have nationalized the auto industry, at least GM, and I think that’s bad to have the government have a socialized car industry,” Sen. Chuck Grassley (R-Iowa) told POLITICO.
Set aside the merits of Chuck Grassley’s argument. If the one thing that the GOP can agree on is that it is socialism for the government to fire a totally incompetent CEO whose company is on government-funded life support, then how do you think they are doing politically in this whole debate?
I’d like to see a poll of how many Americans think the government should bailout corporations without removing the management that ran those corporations into the ground. If you think about the AIG bonuses controversy, people weren’t making distinctions about capitalism versus socialism. They were just howling mad at AIG for losing all the money in the world and they didn’t want anyone that was even two-steps removed from those decisions getting a dime of taxpayer dollars (even if they had already performed the work they were being compensated for). If anything defined the AIG blowup it was a refusal to make fine distinctions about culpability, the law, or even the Constitution. People just wanted a pound of flesh, and they got it.
Now, again, I’m not talking the merits but only the politics. Does the GOP really want to be on the record moaning about a CEO getting shit-canned in this environment? A guy with a $20 million retirement package?
For the Democrats, this is like Derek Jeter playing tee-ball.
in real life, if you want a bank loan for your business, you have to submit a business plan and open yourself up to the scrutiny of the lender. Since no one but the US gov. could give these guys a loan, they’ve opened the door to the administration being involved in the running of the business…if they want the money. I don’t see the problem.
Mr. Geithner, where are the zombie bank “stress tests”?
from the 4/3/09 The Economist:
the fact Obama and team is demanding ZERO transparency, auditing, stress tests for the zombie banks is clearly a large indicator of what many have been saying: the zombie banks are in much worse shape than they want to admit, so of course Geithner does not move forward with the stress tests.
that’s great.
grassley goes from calling for sepuku to defending ceo’s in about a week.
meanwhile, as if they read my comments at booman, the seiu is calling for treasury to fire ken lewis at bank of america.
we live in interesting times.
That tee-ball analogy would be apropos if the Democrats were anything like Derek Jeter.
Instead, the Democrats are more akin to every other minimally capable child that takes enough whacks at the ball: they eventually manage to get the ball in play (often by missing the ball and hitting the rubber tee) and end up on first.
And there aren’t a bunch of Derek Jeters in the Democrats’ dugout. And we’re playing tee ball–so it’s going to be an ugly game.
you forgot the fact that the child at bat was dropped on his head as a baby.
speaking of polls, this one seems to support your premise:
Blame for Downturn Not Fixed on Obama…6 in 10 Back His Handling of Economy:
wapo/abc news
lots of anger simmering out there, and the RATs are definitely not getting it. wagoner’s firing was just a taste of red meat…imo, it’s a not too subtle statement that the paradigm is irrevocably shifting, and those that don’t get on board the bus will be thrown under it.
make it so #1.
But, but, but…what about the $40,000.00 <gasp> Chevy Volt that’s supposed to save GM?
The automakers would like to put all the blame on big legacy contracts, but there is a ton of inefficiency in their massively multi-brand approach and the redundancy in product development that encourages.
If they were at all smart, they’d create an open source project for the design and development of the Volt’s successor.
Change your paradigm or die!
The automakers would like to put all the blame on big legacy contracts, but there is a ton of inefficiency in their massively multi-brand approach and the redundancy in product development that encourages.
Except the massively multi-brand approach is a big part of the reason the legacy contracts are such a problem for GM. They’re locked into dealer contracts around those brands and they can’t dump the brands because of those contracts.
That’s why Saturn and Hummer were the two sacrificial lambs that GM offered up on the chopping block – those two brands are the most recent and have the most wiggle room in the dealer contracts (not to mention that a lot of Hummer dealers were failing anyway). Saturn as a division is doing fine enough that GM at least publicly thinks they can spin it off into a separate company and let it stand on its own – there are other brands that are much worse off with GM, but dropping them would involve breaking old contracts with fat penalties. (The reporting on this has been terrible – from most of the stuff out there you’d think the problem was all union demands and old pension obligation, but the unions have made a lot of concessions and the pension obligations are expected to be off the table within the next few years because the UAW is taking it over themselves – they aren’t the biggest problem GM has right now.)
ims, one of the comments from the administration team re: the volt, was that i’st a seriously flawed design, a generation, at least, behind the current state of the art. [can’t find the link at the moment]
if you’ve got $40k plus to spend, there’s already an all electric sedan coming to market… TESLA Model S…granted production will be limited…but it’s an exemplar of what the big 3 should have been doing, and it’s been done compleetly outside the strict confines of the detroit quarterly profitability at all costs mindset.
if l had a spare $50 k, l’d sign up for one of these today.
ps: see the latimes for info and reviews on the prius v.2.0 and the honda insight
that’s where the competition is re: pricing for a mass produced vehicle.
If I’m a GOP strategist, I’m telling my clients to keep their mouth shut on the automakers until Obama makes his decisions. Fair or unfair, there’s no way GM and Chrysler can come out of this without shedding tens of thousands of union jobs and auto dealership workers in Blue and Purple states — job losses that now will be laid at Obama’s feet, like it or not. State GOP officials in Pennsylvania, Michigan, Ohio and Indiana have to be salivating at this point.
Instead, the GOP being the GOP, they’re going on record as saying firing the CEO who ran the company into the ground was “Obama overstepping his bounds” and trying to generate populist outrage over a guy who got $20 mil for being fired.
Rick Wagoner was fired because he got an “F” on his latest plan to restructure GM. Frankly he should have been fired as a condition of the first bailout. What the American people don’t understand is that it takes REAL VISION to turn around a gigantic enterprise like an automobile manufacturer. We have had only one such person to do it, and that was Lee Iacocca who with government help turned Chrysler around.
Older people know that Iacocca was a brilliant automobile designer, having designed the super popular Mustang in 1964 while at Ford Motor Company. It is also well known that Iacocca’s introduction of the Chrysler minivan in the 1980’s as president of Chrysler was largely responsible for revitalizing the company and returning it to profitability. But what is not generally known by the American public is the fact that Iacocca’s management and restructuring skills were the real reason why Chrysler returned to fiscal viability. For example, He was responsible for putting a union president on the board of directors, a first in U.S. Corporate history.
The present GM is a gigantic corporation with sales and manufacturing operations around the world, and would dwarf the Chrysler of lee Iacocca’s time into insignificance. This is the ninth inning for GM and here are the real statistics of its position in the game.
(1) The new chief of GM, Mr. Frederick Henderson, I submit is no Lee Iacocca.
(2) Nobody really knows HOW BIG GM really is, both nationally and internationally.
(3) Problems #1 and #2 above only have 60 days to get sorted out and resolved, at least in the form of a credible restructuring plan.
I also submit that American don’t know what the government is asking for we they demand a “Restructuring Plan” from GM. What is really asking for is to figure out an answer to #2 above, document it in terms of equitable resources, and outline what facilities and holding will be sold off to relieve the debt and provide sufficient capital to support a smaller world wide business enterprise going forward. (It is the requirement to provide complete auditing information on GM’s international operations that caused Rick Wagoner to resign.)
Since I be a betting man, my money is on Mr. Henderson to strike out on his first trip to the plate. Nuff said…
An excellent post! I’m unsure how much fault can be laid at Wagoner’s feet since on his watch GM was reviving its design and reliability. That might have been due to his predecessor or been done in spite of the CEO by lower level Engineering and Manufacturing executives. Still, marketing suffered on his watch with the public accustomed to large rebates and “employee price sales”, destroying margins. That can be laid at his feet. In any case, a scapegoat was needed and although conservative friends of mine are foaming at the mouth about “Obama firing a private company CEO”, the early reports said Obama asked him to go (not “fired” him) and he went willingly.
The new guy is from Northrup-Grumman, so he is probably adept at screwing the government.