The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.WOW! You know I'm not particularly upset about that, but those opposed to this move are probably seeing their blood pressures rise a little. Probably for good reason as government moves to increase it's role in private businesses.
On Monday, President Barack Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. The plan is based on recommendations from the Presidential Task Force on the Auto Industry, headed by the Treasury Department.
The White House confirmed Wagoner was leaving at the government's behest after The Associated Press reported his immediate departure, without giving a reason.
Frankly I'm less upset about the goverment ousting Wagoner. On the contrary I'm more upset about these bailouts. Especially of those companies that should fail because they engaged in "bad" business. Besides I'm of the opinion that Wagoner was running GM into the ground anyway. I remember when he and other auto industry CEOs (from Chrysler and Ford as well) were having their hands out for a bailout.
They were hammered very well because instead of choosing alternate means of traveling they chose to use their corporate jets. I do believe it was Wagonner who said he wasn't willing to give up his CEO salary. With tose two strikes against him it's kinda hard for me to feel terribly sorry for the man.
I justify it this way. A businessman should know that when he (or she) ever approaches government for any help for their business they're dealing with a government or politicians who may very well use such a proposition to advance their own power or agenda. Almost reminds me of our former ousted governor's attempt to extort the Chicago Tribune to make some changes on the editorial board in exchange for the state taking over a major corporate asset.
In that regards I don't sympathize with Wagonner at all. I know a lot of this is 20/20 hindsight, but one can conclude that he may not have been the best man to insure the future of an important player in an important industry. It was on his watch that this player was forced to ask for help from the Government.
Still let me just reiterate that I don't believe government should interfere in the role of private business in the form of government loans to bailout failing businesses within important industries. BTW this is how Obama has justified this:
A failure of leadership from Washington and Detroit is to blame for the crisis facing American automakers, President Obama said today when he announced that neither GM nor Chrysler had shown they could remain viable without government help.Another thing I want to talk about. How do you think Obama is doing so far? It seems there are those of us who might be veering away from President Obama so far.
The White House is giving both companies more time to restructure before the administration agrees to commit more taxpayer money to helping them. "We cannot and must not and we will not let our auto industry simply vanish," Obama said, calling the industry a source of deep pride.
...The president said a structured bankruptcy process that would use the bankruptcy code "in a quick and surgical way" could be necessary to help both companies improve their balance sheets. The government will back the warranties of any new cars purchased from the companies during any restructuring.Obama has repeatedly declared his commitment to the U.S. auto industry, but has said it must be one that can build the clean energy cars of the future and better compete with foreign carmakers -- something that will require extensive restructuring and modernization, hard choices and painful concessions from workers and bondholders, as well as new vision and new direction. Still, he acknowledged that vast numbers of American workers rely on the auto industry and talked about the pain already being faced by people in big car-producing states like Michigan, where more than one in 10 are unemployed.Speaking directly to the men and women of the industry, Obama reprised some of the populist rhetoric he adopted to help woo working class voters during the campaign. He said he understood many had been going through tough times for a long time and that while there could be more tough times ahead, he would fight for them.
Yesterday I was eating in the cafeteria and a man knowing that I major in political science asked me to grade him. I just gave him a C. A good C or a bad C he asked and well I wasn't prepared to go there exactly. I told him a neutral C. I gave him a C for what happened with GM mainly and probably some other factors. Right now I think his administration has come off to a rocky start.
What do you think out there? Is it a little early to grade Obama? What kind of job do you think Obama is doing? Are you going to wait out these next four years to see if any of the changes Obama has made will have an impact on these times?