After a November meeting with the Senate Banking Committee forced General Motors (GM) chief-executive Rick Wagoner to accept a no bonus $1 per year salary starting in 2009, President Obama and his auto industry task-force have decided that Mr Wagoner’s services aren’t worth a greenback. In addition to requesting the resignation of Mr Wagoner during their meeting with GM executives last Friday, the Obama administration judged the company’s restructuring plans insufficient and called for chapter eleven bankruptcy to be reconsidered.
Whether or not bankruptcy is fully realized, its threat grants bargaining power to GM executives whose auto workers continue to receive better benefits than those of Ford and domestically Honda and Toyota. Moreover, the federal government’s hand-picked replacement for Mr Wagoner, Fritz Henderson, was selected largely to provide Mr Obama’s task-force with increased influence with which to cut union pensions and reconstruct the company model. And yet Mr Henderson’s appointment also marks a new step in government involvement in businesses aided by government bailouts.
For Mr Obama and his administration such participation in Detroit is a gamble and probably not a good one. If Mr Henderson and Kent Kresa—who will be assuming Mr Henderson’s former GM position as company chairman—refuse to declare bankruptcy, fail to negotiate effective pay cuts with GM staff, or declare bankruptcy with negative outcomes, Mr Obama will be partially responsible for the company’s failures. Not only that, he will be partially responsible for the millions of unemployed Americans that GM predicts could follow its potential collapse.
Mr Obama seems to be ignoring that guilt by association—which has plagued him from William Ayers formerly of Weather Underground to Reverend Jeremiah Wright formerly of the Chicago megachurch to which Mr Obama belonged—is, to the public conscience, as good as guilt; even Mr Wagoner—who has managed GM for nine years—is only guilty of inextricable ties to the General Motors of the 1970s.
In the future, Mr Obama ought to watch his faulty logic and keep his hands a bit further from Detroit’s flames. Frankly Mr Wagoner’s $1 salary was far less than what he will receive in unemployment benefits, and frankly if President Roosevelt conjures images of victory in World War II, and President Bush the mixed effects of 9/11, Mr Obama has much to fear; as February’s unemployment report revealed, 12.5 million isn’t only the population of Pennsylvania.
-David Lamb
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Hopeless: Fights are breaking out over Michigan in response to layoffs spurned by Obama’s choice for bankruptcy above all other options. Watch video:
http://tinyurl.com/hopelessobama
Although he seems to think he’s the nation’s CEO now, with Obama’s management experience he couldn’t get hired to run a muffler shop.
And firing the head of General Motors must be quite a coup for a power-mad narcissist like Barack- what a rush, man. His Marxist-professor mentors would have been so proud. But, it’s costing GM $20M to let Wagoner go, and with dubious benefit- which is now on the taxpayer’s tab, of course.
Barack Obama making business decisions and deciding who keeps their job and who doesn’t is a very bad idea… he doesn’t know anything about capitalism- except for that he doesn’t like it very much.
[...] Lamb presents Playing with Fire: President Obama, Rick Wagoner, and the new responsibilities posted at Killer Buffalo, saying, “After a November meeting with the Senate Banking Committee [...]