Monday, March 30, 2009
Wagoner Ousted on Obama's Say-so
GM's CEO Rick Wagoner was fired over the weekend by the Obama administration following an examination of the company's plans by the auto industry advisory council, which returned a vote of no confidence on Wagoner and many board members. The move is perhaps unprecedented in American history, and if there is a precedent it occurred during the Great Depression of the 1930s. Along with the GM developments, Chrysler was declared to be nonviable as a stand-alone entity and the government is pushing a sale of the company to the Italian company Fiat.
The stock market doesn't like it--the Dow's down about 264 points at this writing. Perhaps the Wall Street crowd thinks if it can happen to GM, it can happen to anyone. That's certainly what I think. Whaddya think, is GE next? How about Wal-Mart?
As I told my high school sophomore daughter this morning, when you make a deal with the devil, you have to dance to his tune. The feds forced Wagoner to resign by threatening to withhold any additional funding if he remained on the job.
Interestingly enough, there's no indication at this point that the UAW is having to sacrifice anything to save GM. Maybe that'll come when GM files for Chapter 11 bankruptcy protection, which the advisory group said was perhaps the best way to achieve viability. I'm no economist, but I have always thought that Chapter 11 was both necessary and the right thing to do from an ethical and political standpoint, because it would keep the government separate from industry. Alas, 'twas not to be.
I'm sure this will be one of the hot topics on the radio and TV talk shows for a few days, but as interesting as those discussions might be, they'll have the same effect as talking about the weather. As for myself, I'm wondering how long it'll be before the United States will be renamed "The People's Republic of Obamaland."
The stock market doesn't like it--the Dow's down about 264 points at this writing. Perhaps the Wall Street crowd thinks if it can happen to GM, it can happen to anyone. That's certainly what I think. Whaddya think, is GE next? How about Wal-Mart?
As I told my high school sophomore daughter this morning, when you make a deal with the devil, you have to dance to his tune. The feds forced Wagoner to resign by threatening to withhold any additional funding if he remained on the job.
Interestingly enough, there's no indication at this point that the UAW is having to sacrifice anything to save GM. Maybe that'll come when GM files for Chapter 11 bankruptcy protection, which the advisory group said was perhaps the best way to achieve viability. I'm no economist, but I have always thought that Chapter 11 was both necessary and the right thing to do from an ethical and political standpoint, because it would keep the government separate from industry. Alas, 'twas not to be.
I'm sure this will be one of the hot topics on the radio and TV talk shows for a few days, but as interesting as those discussions might be, they'll have the same effect as talking about the weather. As for myself, I'm wondering how long it'll be before the United States will be renamed "The People's Republic of Obamaland."
Labels: Economics, Economy, Finance, Financial crisis, government, Obama, politics
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