Obama's remarks on the US Auto Industry

[Jamisjockey]

Forget his remarks.  I care little bout what the speech writers placed in front of Obama.

Does it not bother anyone else that the President of the United States just fired a private employee of a private company?  And he got away with it?

Not at all.  GM stuck their hand out.  Sleep with dogs, wake up with fleas, this is of GM's own doing...

[El Tejon]

Lemme see, the federal government cannot even run a whorehouse in Nevada, but suddenly The One, whose last business decision was paper or plastic at the Treasure Island or kings or 100s at the White Hen, is suddenly qualified to run an entire industry.

We are in deeeep trouble.

FIAT=fix it again, Tony.

[doczinn]

That's how this system works-people with lots of financial and social influence demand things, and the politicians respond.

:rolleyes:

[makattak]

This is especially true where much of the GDP is in the hands of unsympathetic types (like execs who take millions in bonuses after they nearly wrecked the entire nation's financial system.)

You mean like:

Franklin Raines

or

Richard Syron


Oh... oops, you don't mind their bonuses, it's only the bonuses of those evil wall street people. They're the problem.

[Gewehr98]

I'd buy another Fiat, like a Panda or Uno, in a heartbeat.

It's not as if Daimler wants another go at Chrysler, either. 

They learned their lesson and dropped them like a bad habit. 

[seeker_two]

Does it not bother anyone else that the President of the United States just fired a private employee of a private company?  And he got away with it?

Even worse.....doing so will inflate his pseudo-messianic ego to infinite proportions....and he'll keep doing it.... 

Can't wait to see him "fire" Rush Limbaugh.... 

[MicroBalrog]

Does it not bother anyone else that the President of the United States just fired a private employee of a private company?  And he got away with it?

No, not any more than the fact that the Congress of the United States voted hundreds of billions of dollars to private companies.

[Gewehr98]

Still trying to find the exact verbage that says the president fired Wagoner.

Nope. Can't see it.

I did see a reference somewhere that says the White House would consider further government assistance to the company if they restructured, and Wagoner's departure would be part of that restructuring.

Shock?

Outrage?

Hardly.

[Headless Thompson Gunner]

Still trying to find the exact verbage that says the president fired Wagoner.

Nope. Can't see it.

I did see a reference somewhere that says the White House would consider further government assistance to the company if they restructured, and Wagoner's departure would be part of that restructuring.

Shock?

Outrage?

Hardly.

Quibble over the semantics if you like.  The substance remains the same.  The President issued an ultimatum, "he goes or else!"  It's an outrage that he would make the ultimatum.  It's an outrage that he could make it stick.  And it's an outrage that he's suffering no consequences afterwards.

[Headless Thompson Gunner]

No, not any more than the fact that the Congress of the United States voted hundreds of billions of dollars to private companies.

What a sorry state we've come to.  The President does something atrocious, and our response is "meh, that's no worse than what they did last month."

[ronnyreagan]

The President issued an ultimatum, "he goes or else!"  It's an outrage that he would make the ultimatum. 

It would be an outrage if the "or else" meant something like forcefully shutting them down. In this case "or else" means they would not be receiving yet another "capital investment" from the federal government. While not bailing out companies would be preferable, I think some prerequisites and conditions attached to a bail out are probably better than none. An example would be to make sure the same people who drove a company into the ground would not be in charge to manage that company in the future. I can't say I'm too familiar with Wagoner's history and performance with GM, but judging by the fact that they are begging the government to keep them afloat I'm guessing it wasn't very impressive.

[Headless Thompson Gunner]

It would be an outrage if the "or else" meant something like forcefully shutting them down. In this case "or else" means they would not be receiving yet another "capital investment" from the federal government. While not bailing out companies would be preferable, I think some prerequisites and conditions attached to a bail out are probably better than none. An example would be to make sure the same people who drove a company into the ground would not be in charge to manage that company in the future. I can't say I'm too familiar with Wagoner's history and performance with GM, but judging by the fact that they are begging the government to keep them afloat I'm guessing it wasn't very impressive.

The "or else" threat was a threat to shut them down.  The threat was that Obama would demand immediate repayment of the money already lent to GM, secure in the knowledge that much of the money had already been spent and couldn't possibly have been repaid immediately.  GM had no choice whatsoever, and that's exactly why Obama did it.

As a CEO Wagoner has been competent, if not spectacular.  I'm not sure anyone could have done much better with the mess that was GM when Wagoner took over 8 years ago.  GM's problems date back many decades, and they'll decades to fix (assuming no bankruptcy and no cooperation from the unions).

If this was about punishing the people responsible, then Ron Gettlefinger should have been fired right alongside Wagoner and GM's board.  The fact that GM's senior leadership was brought to heel while the unions weren't even scratched should tell you all you need to know about what's really happening here.

[Gewehr98]

Merely competent is not enough now, unfortunately.

It wasn't as cut and dry as "He goes, or else".

It was, IMHO, "You aren't getting another dime out of the U.S. taxpayers until you reorganize and show us a workable business plan.  That plan should be sound enough to prevent another bailout request, and if you're not the man who can do it, find somebody else who can.  We aren't going to dump more good money after bad."

At which point GM agreed - pretty much a carrot and stick approach.  GM was under no obligation to oblige President Obama's request, but if they want to belly up to Uncle Sam's cash trough for a second helping, they'd better show some serious effort, both to the White House and the American public. Saving face means getting rid of the management who steered that behemoth's helm into the current mess, even if they were nice people and brought milk and cookies for the staff every day. If there was an "or else", it would only have meant they were free to get their financing elsewhere. The government wasn't going to shut them down.  Their own business practices would do that in due time, without any assistance or intereference from Uncle Sam.

I dunno, maybe I don't see a Brownshirt Kristallnacht Pt. II happening next, although looking back at the results of the first bailout, the White House and Congress should've just said "no" to any more cash injections.  If they really want to survive, GM and Chrysler need to file and reorganize the right way.

[Headless Thompson Gunner]

Merely competent is not enough now, unfortunately.

It wasn't as cut and dry as "He goes, or else".

It was, IMHO, "You aren't getting another dime out of the U.S. taxpayers until you reorganize and show us a workable business plan.  That plan should be sound enough to prevent another bailout request, and if you're not the man who can do it, find somebody else who can.  We aren't going to dump more good money after bad."

I believe you are mistaken.  It wasn't a matter of throwing good money after bad.  The issue wasn't about whether GM would receive additional money, it was about whether GM would be forced to immediately return the money they had already borrowed, which would have been impossible.

The terms of the first loan required that GM submit a restructuring plan by March 31, or else they'd have to repay that first loan in 30 days. 

Well, GM held up its end of the bargain.  They submitted a plan by the due date.  By all accounts it's a decent, workable plan.  GM could have survived under that plan and eventually repaid the loans.

Obama threatened to reject the plan out of hand if Wagoner wasn't forced out.  By arbitrarily rejecting the plan, Obama presented GM with n impossible choice: Either Wagoner goes or GM will be dead within 30 days.

I don't know how else to look at it but that Obama fired Wagoner.  There's some plausible deniability and misdirection built in to the arrangement, there always in in political maneuverings like this one.  But the substance of it remains the same.  Obama fired Wagoner.

GM should have gone bankrupt late last year.  But for whatever reasons they didn't.  Now Obama has turned the situation his advantge.  Instead of either bailing them out of forcing them into bankruptcy (either of those alternatives would have been defensible) he's done something far worse.  He fired the CEO and Board of Directors of a private company, and stole de facto control of the country's largest industrial company for himself.

[Jamisjockey]

This current administration is like a loan shark.  Not that I think the government should be loaning money (which it doesn't even have) to private enterprise.  But when you borrow money from uncle sam and this current administration especially, and you have a barely viable business model as it is, expect them to pull the strings.  I've got no sympathy for the outing of the GM CEO. 

[makattak]

This current administration is like a loan shark.  Not that I think the government should be loaning money (which it doesn't even have) to private enterprise.  But when you borrow money from uncle sam and this current administration especially, and you have a barely viable business model as it is, expect them to pull the strings.  I've got no sympathy for the outing of the GM CEO. 

I have no sympathy for the GM CEO, either.

That's the problem: too many people are assuming that those who object to Obama's forcing Mr. Wagoner out aren't saying he was a good CEO who should be kept around.

We aren't. We honestly don't care if he stays or goes so long as it is at the behest of the shareholders. Our problem is the government saying what has to happen in a private company.

[ronnyreagan]

Our problem is the government saying what has to happen in a private company.

Maybe your definition of a private company is different than mine. The federal government is guaranteeing their warranties for them. They've already received billions of dollars from the federal government and are asking for billions more. They failed on their own, and once the government propped them up the government got some control over how things will go. GM chose not to remain a private company and they are experiencing the consequences.

[Jamisjockey]

They are no longer a private company.  By accepting money from the government for a stake in the company, they've essentially become nationalized. 

[Headless Thompson Gunner]

They are no longer a private company.  By accepting money from the government for a stake in the company, they've essentially become nationalized. 

GM has indeed been nationalized, though it wasn't accepting the loan that did it, it was Obama's firing of the CEO and the Board of Directors.

GM should have been put through bankruptcyt.  Barring that, they should have been bailed out.  What Obama did was much worse.  Obama stole the company for himself, and he used our money and the power of the government to do it.

Only three months into office and Obama has already nationalized the biggest industrial company in the country.  Give him another few weeks and he'll have a big bank or three under direct government control.

Are you scared yet?

[De Selby]

GM has indeed been nationalized, though it wasn't accepting the loan that did it, it was Obama's firing of the CEO and the Board of Directors.

GM should have been put through bankruptcyt.  Barring that, they should have been bailed out.  What Obama did was much worse.  Obama stole the company for himself, and he used our money and the power of the government to do it.

Only three months into office and Obama has already nationalized the biggest industrial company in the country.  Give him another few weeks and he'll have a big bank or three under direct government control.

Are you scared yet?

The only thing I'm scared of is that large corporations might keep asking for and receiving money until the Government is bankrupt. 

It's silly to pin the blame on the evil uncle sam for this when the origin of the problem is these same corporate boards begging for cash.  If they were silly enough to think they were going to get cash with no strings attached, they shouldn't be in business in the first place.

The nationalizing is going on so that bad debts can be absorbed by the public.  No one with a profitable and secure business is being owned by the government in this process, because those people weren't in line for bailouts.  This is hardly a scam to end private business as we know it.

[RocketMan]

No one with a profitable and secure business is being owned by the government in this process, because those people weren't in line for bailouts.

Tell that to the banks that were forced to take TARP monies they neither wanted nor had need of.

[Jamisjockey]

GM has indeed been nationalized, though it wasn't accepting the loan that did it, it was Obama's firing of the CEO and the Board of Directors.

GM should have been put through bankruptcyt.  Barring that, they should have been bailed out.  What Obama did was much worse.  Obama stole the company for himself, and he used our money and the power of the government to do it.

Only three months into office and Obama has already nationalized the biggest industrial company in the country.  Give him another few weeks and he'll have a big bank or three under direct government control.

Are you scared yet?

There are bigger things to be scared of with this administration.  The nationalization of businesses happened because those businesses asked the world's biggest meanest loan shark for money (uncle sam).  Bad move.  Hopefully the canning of the GM CEO and the new legislation allowing everyone's favorite tax cheat to set salaries for those companies.....hopefully businesses will wake up after seeing that.

[Headless Thompson Gunner]

There are bigger things to be scared of with this administration.  The nationalization of businesses happened because those businesses asked the world's biggest meanest loan shark for money (uncle sam).  Bad move.  Hopefully the canning of the GM CEO and the new legislation allowing everyone's favorite tax cheat to set salaries for those companies.....hopefully businesses will wake up after seeing that.

Uncle Sam is like a big mean loan shark?

Funny, Uncle Sam didn't show any loan shark tendencies back when Chrysler borrowed money in the 80's.  That transaction played out as an honest loan deal.  Money was borrowed and repaid without a fuss.  Nobody ended up nationalized, and neither party tried to twist the loan agreement into a phony pretext for taking over the other party.

Come to think of it, Uncle Sam didn't show any nasty loan shark behavior at all until just recently. 

Hmm, I wonder what happened recently that turned the honorable Uncle Sam into the big mean loan shark? 

[Gewehr98]

I was just going to mention the Lee Iacocca Chrysler loans.

He paid back Uncle Sam 7 years earlier than expected. 

No loan shark mentality, at least, not from what I remember at the time. 

[wquay]

I believe the feds provided loan guarantees for chrysler. Big difference.

I have no sympathy for Wagoner or GM. If your company depends on government handouts to stay out of Chapter 11, then the government owns you.