Setting a Dangerous Precedent

From Philip Elliott at the Associated Press reporting on President Barack Obama’s remarks regarding GM and Chrysler. (Full Article)

Obama said he is committed to the survival of an auto industry – on terms that will allow it to compete internationally.

“But we also cannot continue to excuse poor decisions,” he said. “And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars.”

He also said some of the industry’s progress has scarcely been noticed. He mentioned that the North American car of the year in 2008 was produced by GM.

“Let me be clear: the United States government has no interest or intention of running GM,” he said.

But that was at the same time he was formally announcing the departure of Wagoner, whom administration officials forced into retirement on Sunday in preparation for the president’s remarks.

“This is not meant as a criticism of Mr. Wagoner, who has devoted his life to this company; rather it’s a recognition that it will take a new vision and new direction to create the GM of the future.”

Let me get this out of the way up front; President Obama does says two things here with which I agree completely, not only with the President’s words but with his apparent intent. The first is that US automakers are, for the most part, producing excellent cars, a fact which is often overlooked. Second, that we can’t continue to pump taxpayer dollars into the auto industry.

It’s downhill from there.

President Obama claims that the United States government has no interest in running the day to day operations of GM. Yet, just days earlier, he requested the resignation of GM’s CEO, Rick Wagoner, a decision that was apparently made without consulting GM’s Board of Directors or Congress. If President Obama feels it’s within his authority to summarily fire Wagoner, what’s next? Replacing the Board of Directors? Approving engine specs? Scheduling bathroom breaks?

The President goes on to say, “it will take a new vision and new direction to create the GM of the future,” but in the light of recent events, one has to wonder, whose vision will that be?

As President Obama said himself, we “cannot continue to excuse poor decisions.” Again, I agree. President Obama’s decision to personally intrude in the operations of GM is an extremely poor decision for which there is no excuse.

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5 Comments

Filed under Barack Obama, General Motors

5 responses to “Setting a Dangerous Precedent

  1. Shawn O'Rourke

    I certainly think that nationalization of cetain things is unfortunatley in the near future. If thats the case, then we should switch to a parlimentary system like every other “Democracy” that the U.S. has established since WWII.

    • paulag1955

      Personally, I’d like to see us step back from nationalization; however, I’m not feeling exactly hopeful that will happen. As for a parliamentary system…wow, that would take some doing, wouldn’t it?

  2. Please remember, GM went to Washington, hat-in-hand, begging for money. A major complaint against Bush was that he gave away the store without holding anyone accountable.
    Also, putting COO Fritz Henderson at the helm should have surprised no one.

    • paulag1955

      I’m not saying Henderson was a bad choice. I’m saying that, in my opinion, the President over-stepped the bounds of his authority. At the same time, by choosing to continue working with the CEO’s of banks who accepted (or were forced to accept) bailout funds, and by leaving Chrysler’s CEO in place, the President appears to have made a capricious and arbitrary decision.

  3. I agree with Paula 100%. This is a dangerous move for all American companies. It’s one thing to attach strings to government bailouts; it’s another to tell a company how to operate, who to employ, and how much to pay them.

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