[Mon. a.m. Updates] Rick Wagoner: Slaughtered As a Triumphant Obama Holds Rick’s Head High
By SusanUnPC on March 29, 2009 at 11:08 PM in Auto Industry, Current Affairs, David Axelrod, Economic Stimulus, Economy, John Batchelor, Larry Johnson, President Barack Obama, Stimulus Plan, Tim Geithner, Unitary Executive Powers/Signing Statements
With auto company bailouts highly unpopular with the citizenry, President Barack Obama, who will speak later Monday, felt compelled to shake things up. To be blunt, as Allahpundit puts it, “If you want taxpayer money, you’re going to have to do things The One’s way.”
The WSJ reports that GM’s Rick Wagoner and Fritz Henderson were summoned to D.C. on Friday, to the Treasury office of Steven Rattner, selected by PBO last month to head the Department’s auto-industry task force. Mr. Rattner “broke the news to Mr. Wagoner in person at his office at Treasury,” and then met with the temporary replacement, Mr. Henderson. Bloomberg confirms the Friday meetings in “GM’s Wagoner Steps Aside After Failing Obama Scrutiny.”
Below: Who knew about the Friday beheading — that bloody coup d’état! — before the story broke Sunday night? Who didn’t know? …
Surely seven people (and staff) knew Friday but, as with the leak-free message control during Obama’s campaign, nobody spilled the beans. Who knew? GM’s Wagoner and Henderson, Treasury’s Geithner and Rattner, the WH’s Obama, Emanuel, and perhaps Axelrod. Who was left in the dark until Sunday night? Michigan’s senators Carl Levin and Debbie Stabenow? Michigan’s once-powerful House member John Dingell? (Dingell recently got kicked upstairs by Nancy Pelosi.) The 11th District’s Thad McCotter? (McCotter spoke Sunday night with John Batchelor and guests, including Larry Johnson, but was constrained by “embargoed” news.)
In fact, Obama didn’t tell four key Congressional members (Levin, Stabenow, Dingell and Sander Levin) until “a Sunday night conference call that he would grant unspecified additional aid to GM for 60 days and Chrysler for 30 days, according to a person familiar with the call,” reports the Detroit News.
Once again, the Unitary Executive Obama has circumvented the will of the people which is supposed to be expressed through their representatives and senators to Congress, as quaintly prescribed in the Constitution by our nation’s brilliant founders.
This is akin to Geithner’s “toxic assets plan,” announced Monday and issued by fiat. To which you might reply, “Well, he is the Treasury secretary.” And to which I’d retort, “But he sneakily is going to blow at least $1 trillion of your taxes, without having undergone (1) Congressional scrutiny and hearings; and (2) any legislation granting him such authority.
This Bloomberg paragraph explains in part why Rick Wagoner was forced out:
“It’s very hard for the government to write a big check without giving some evidence of change,” Casesa said. “This will also give the government moral authority with the other stakeholders to make them sacrifice.”
The WSJ goes further:
The Obama administration used the threat of withholding more bailout money to force out General Motors Corp. Chief Executive Rick Wagoner, marking one of the most dramatic government interventions in private industry since the economic crisis began last year. [...]
[NOTE THIS, readers.] The move also indicates that the Treasury Department [GEITHNER] intends to wade more deeply than most observers expected into the affairs of the country’s largest and oldest car company.
So, Obama forced the chairman of a major private company to resign. (Some news is “embargoed” until midnight ET. We will update.) Geithner? He knew this morning — of COURSE he knew (see WSJ quotes above and below) but held it during Meet the Press and Gregory, unlike Russert, has no nose for blood in the water. By the way, I never thought I’d cry out for Tim Russert, but, damn, was he needed as David Gregory played softball with Geithner, who’s obviously graduated from a quickie two-week master’s degree in Media Management from David Axelrod. For example, the back-and-forth on the toxic assets plan was as placid as a lullaby duet.
Update: Hot Air’s Allahpundit adds another dimension:
If you want taxpayer money, you’re going to have to do things The One’s way. And if you don’t want taxpayer money, TurboTax Tim might swoop in and make sure you do things The One’s way anyway. [...]
Oddly enough, when Rasmussen polled the public in December, only 14 percent thought a GM run by the feds would outperform a GM run by the private sector. Exit question: Ever get the feeling that Obama’s not quite the centrist pragmatist Christopher Buckley thought he’d be? (Emphases mine.)
(Susan’s Note about the conservative Christopher Buckley’s public support of Obama: This is a depressing instance of the unintended consequence of voting based primarily on compensatory white guilt.)
There are more news flashes via Memeorandum from major news outlets. Here’s more Bloomberg:
“General Motors Corp. Chief Executive Officer Rick Wagoner will step down after more than eight years running the largest U.S. automaker, people familiar with the situation said.
“The Obama administration asked Wagoner, 56, to leave the company and he agreed, said an administration official who declined to be identified before the move was announced. The likely replacement, unless the government hires from outside the company, would be Chief Operating Officer Fritz Henderson, said John Casesa, managing partner at New York-based consulting firm Casesa Shapiro Group.”
And here’s more WSJ:
An administration official confirmed that Mr. Wagoner was asked to step down to make way for ongoing restructuring within the company. Mr. Wagoner will be replaced, at least on an interim basis, by Frederick “Fritz” Henderson, the company’s chief operating officer.
Mr. Wagoner was asked to step down on Friday by Steven Rattner, the investment banker picked last month by the the administration to lead the Treasury Department’s auto-industry task force. Mr. Rattner broke the news to Mr. Wagoner in person at his office at Treasury, according to an administration official. Afterward, Mr. Rattner met one-on-one with Mr. Henderson, who will fill in as GM’s CEO.
GM didn’t immediately return calls for comment. One longtime GM board member, Kent Kresa, declined to comment when reached by phone Sunday night.
The ouster comes as President Barack Obama prepares to give billions of dollars more in aid to struggling auto makers GM and Chrysler LLC, but only if all sides—including unions and bondholders—show that they are ready to sacrifice.
President Obama plans Monday to lay out the administration’s interim conclusions on the companies’ viability and the many steps that need to be taken to return the companies to health. The president is likely to hold off on granting the companies $21.6 billion in new loans to preserve leverage in negotiations, particularly with the thousands of bondholders who hold a total of about $28 billion in GM debt.
In remarks Sunday, Mr. Obama said that he intends to extract “a set of sacrifices from all parties involved—management, labor, shareholders, creditors, suppliers, dealers.” The industry, he said on CBS’s “Face the Nation,” must “take serious restructuring steps now in order to preserve a brighter future down the road.” The two companies “are not there yet,” he added.
Mr. Wagoner’s removal shows that the sacrifices could cut deep. The departure of the company’s top executive promises to further shake up a company that has already been through considerable change over the past six months. The 56-year-old executive had been scrambling to craft a global strategy aimed at maintaining leadership in the global sales chase with Toyota Motor Corp., and making big profits in emerging markets. … Read all.
Adds Bloomberg in “GM’s Wagoner Steps Aside After Failing Obama Scrutiny “:
[...]
Wagoner became a symbol of the failing U.S. auto industry in recent months after flying to Washington via corporate jet to ask for aid. Since taking over in 2000, he presided over $82 billion in losses during the past four years and yielded GM’s title as the world’s top-selling carmaker to Toyota Motor Corp.
His exit caps an unsuccessful five-month push to win U.S. aid without losing his job. Forced to work for $1 a year and cede most of his corporate perks, he had said he wouldn’t resign unless compelled. On March 27, 129 days after Congress’s first hearing on the future of GM, he got that call.
[...]
“On Friday I was in Washington for a meeting with administration officials,” Wagoner said in a statement. “In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have.”
Henderson, 49, was tapped by Wagoner to become COO a year ago after serving as chief financial officer. He previously ran GM’s operations in Asia and Europe.
Obama will outline his ideas for GM at a briefing later today, giving the biggest U.S. automaker 60 days to devise a plan that cuts deeper and makes more changes.
“The bailout loans aren’t hugely popular and that’s creating an issue for Obama,” said Jeremy Anwyl, CEO of Edmunds.com in Santa Monica, California, which tracks vehicle pricing and consumer behavior. “One way to make the loans more palatable is to be able to say the person responsible is no longer with GM.”
GM had said it will shed 47,000 jobs globally in 2009 and plans to close five assembly plants. Executives said the Detroit-based automaker will focus on four U.S. brands, down from eight, and eliminate thousands of dealers.
Rescue Plan
Wagoner oversaw those plans to meet the terms of the rescue unveiled on Dec. 19 by then-President George W. Bush, after Congress balked at a bailout for GM and Chrysler LLC. CEO Robert Nardelli will stay at Chrysler and must complete a planned alliance with Fiat SpA within 30 days, an Obama administration official said.
Obama’s task force pointed to GM’s failure to win concessions from bondholders, a step needed to cut the automaker’s debt and ensure future viability, as one reason the government needed a new plan.
GM’s latest debt exchange offer, made March 24, wasn’t likely to win bondholders’ approval because it’s less lucrative than the terms the U.S. required for the company to keep the first $13.4 billion in loans, a person briefed on the talks said. The bondholders didn’t seek Wagoner’s dismissal, the person said.
The government will push for even deeper cuts in debt now, the administration official said.
Tumbling Shares, Bonds
GM tumbled 87 percent in New York Stock Exchange composite trading last year, the most among the 30 stocks in the Dow Jones Industrial Average. The shares gained 21 cents, or 6.2 percent, to $3.21 on March 27, extending a 66 percent rally since GM said March 12 that it wouldn’t need a $2 billion payment by tomorrow to survive as originally forecast. ….
Postscript #1: John Batchelor discussed the firing of Wagoner Sunday night with Larry Johnson on his nationally syndicated radio show via Los Angeles’s KFI-AM (podcast up ASAP). The scheduled topic was the White House meeting with the nation’s top bankers, but the agile Mr. Batchelor leaped on the breaking news about GM’s Rick Wagoner, and plumbed his guests for their reactions, as well as netting Rep. Thad McCotter as a special guest.
Postscript #2: Here is an earlier NoQuarterUSA post that featured McCotter’s floor speech earlier this month. Larry Doyle’s wife discovered it, and e-mailed me the video link. Here’s that video:
Here is his House site URL: Thad McCotter
Mon. A.M. Update / Postscript #3: CALL and e-mail your Senators and your House, and DEMAND CONGRESSIONAL OVERSIGHT AND THE RIGHT TO HAVE LEGISLATION so that Tiny Tim cannot RULE this country by fiat.
Who knew we’d ever be calling up our members of Congress and demanding they craft legislation?
But, unless we do, we might as well think of PBO as Hugo Chavez and/or Fidel Castro with his brother Tiny Tim Raoul Castro.
THIS BLOG’s header says it all:
Isn’t it amusing. The left kicked and screamed about Bush/Cheney’s “unitary executive” for years! Will they hold PBO to the same standards?
FYI: Guess which Democratic primary candidate told the Boston Globe that one of the first things to take care of was to rescind Bush’s unitary executive signings. Can’t guess?
…….
…..
….
…
..
.
Hillary Clinton.
PBO has expanded Bush’s power.
See NoQuarterUSA’s previous stories on the unitary executive signing statements issued by Bush — and now being employed by a small cabel in the White House and Treasury department.
on sale for only $16.95.
also comes with a special spatula.)
(List Price: $27.95 - Your Price: $15.47)
“The story of poker is that of risk-loving America ... a crazy ride in unparalleled detail, driven by wit, wisdom, true love, and sizzling style. As analyst, historian, devotee, and no mean player, James McManus is poker’s most eloquent advocate.”
By Sarah Palin (Release date: November 17. 2009)
It’s beyond socialism. It’s communism. Where do they get off firing the head of a corporation? Yes, they gave them bailout money. So what. Either don’t give them the money, let them fail and sort it out, or give them the money and leave them alone. I’m just waiting for Obama to come into my bedroom and tell me it’s “lights out” time.
Some of these large corporations need to get together and threaten to leave the country if he won`t stay out of the way.
Oh, rest assured, that’s coming. What do you think the “smart grid” is for, if not to decide when and how much electricity you need? Don’t worry, he knows best. You’re not sweating, you’re glowing….really. You don’t need air conditioning once you get used to it. And candlelight sets a certain mood, don’t you think?
I really wonder if the American public understands what is going on here. First you have GM(Government Motors), then you will have Government Banks, Government Housing Authority, Government Schools, Government Utilities and so on.
This is the end of coming to America and living the dream, where free enterprise reigns. For years you scoffed at Chavez, Castro and all others, but here you are slowly going along the same path, and you the people are sitting and just looking on.
Voluntary service will come like a thief in the night, and all will have to serve the state. A strange way of life is slowly creeping into America, its funny that the world outside can see this, but Americans remain oblivious to what is going on around them.
Unbelievable…another fine example of welcome to hope and change you can believe in Communism.
Woah. This is such a nonsense. Either you go the interventionist way before you give the money out, or you trust them enough with your money to let them succeed or fail. This kind of interventionist after the money is gone is just glory and power grab for the watchers.
But I wonder if the timing just before the G20 has something to do with it. Follow the money!!! Was GM financially involved with other foreign automakers? Was the firing the result of pressures from foreign governements or a warning shot to foreign governements?
Anyway those companies should have been allowed to fail and be reorganized in Bankruptcy courts. Smaller ventures would have taken over the assets and we would be well on our way to a newer Detroit, more productive and up-to-date. The combustion motor is dying. Let it be. Any automaker should be preparing its funeral while working on the cars of tomorrow, cleaner, more efficient.
I read a report that GM is going to be forced into a partnership with Italy’s Fiat.
Methinks Obama is trying to throw a bone to Europe so he doesn’t get creamed at G20, as well as distract from the obvious fact that the Financial sector is not being asked for any concessions at all.
It’s chrysler that is in bed with Fiat now.
Fiat has done OK with Allis-Chalmers, Case, etc. Even though their consumer cars are crap (Fix It Again, Tony), they do other things well.
Chrysler is like an ugly daughter: if you don’t want to keep feeding her until you die, you might consider sending her off to Welding School. Welders wear those masks, doncha know.
Daimler essential PAID Cerberus to take that loser off their hands.
Well, I want to know why Diamler’s ‘technology sharing’ plan with Chrysler…..resulted in detuning that technology?
My transmission is a Mercedes part and they paid to have the programmer fly over to America and kneecap it. Can’t have those American cars beating the Germans on their Autobahn….I guess.
So I wonder. Is this yet another European kneecapping….forcing Fiat on Chrysler?
Wagoner is a sacrificial lamb - that’s pretty clear. The greater problem to my mind is that the auto industry has been failing for quite some time, the bailout totals may top $1.3 trillion, and there is nothing concrete that allows taxpayers to know where we stop with all of this.
Well, that is WHY David Gregory failed in his “Fourth Estate” moral imperative today to relentlessly quiz Geithner about the “toxic assets plan” that Geithner unveiled on Monday, and which a number of top economics have condemned as a “one-way bet” that will cost ORDINARY TAXPAYERS another $1 TRILLION, at the very least.
It was disgusting. He passively quoted Krugman but failed utterly to challenge Geithner, who’s improved in his ability to faux-answer questions — being just bright enough to pick up the routine for handling the press.
Russert would have penetrated deeper, I hope. One never knew if he would or not. He was a softball or hardball player, depending. But I think his Irish Catholic blood-hunt sporting side might have smelled the nascent vulnerability in Geithner, and gone for it.
Did they happen to say just who will decide who he’s replaced with? I got the feeling it’s someone they want in there.
Sorry, Susan, but the Russert with “a nose for blood in the water” would not apply here because if he were alive, he would do NOTHING to undermind, embarrass or humiliate “The One”. David Gregory did not need a quick course from Axelrod on media management to protect BO, he already had that ingrained in him from none other than Tim Russert.
I watched the entire MSNBC funeral weekend for Russert for one reason and one reason only - to pick up anything I could as to why MSNBC had become the Obama network. Turns out Russert was in charge of political programing period. When BO was interviewed on his sudden passing he said, “Tim was a friend……” They met at the 2004 Dem Nat’l Convention following O’s speech. Tim, like Pelosi and Dean decided very soon afterwards that he was “The One”. The only goal Russert had was to make sure Obama was the nominee and then POTUS.
So, let me tell you, Russert would be doing nothing. Yes, Karma is a bitch!
The reason MSNBC and NBC covered for, and lied for the Fraud was money. Money for GE and the media all received money to shill for the Fraud. All this “selection” was about was the White House being bought by some really venal folks with a lot of cash.
Whether MSNBC/NBC/GE were paid money or not does not explain the entire cast of characters with no exceptions collectively shirking their journalistic duties and doggedly trying to day after day knock Hillary Clinton out of the race but going out of their way to put BO in a favorable light in every single instance.
Had it simply been money, that would have broken down somewhere along the chain. It didn’t. These people were personally invested in this treasonous effort. Russert’s death simply intensified their effort to get it done for him.
Why would it break down along the chain? GE was going bankrupt and Obama told them he would bail them out if he got elected. And he did. No big surprise there. I do think that people like Matthews and Olbermann were just plain bizarre and freaky, and calling them “journalists” was a joke.
By the way, another example of the power Soros, Obama and all of them have over GE/NBC/MSNBC…the fact that NBC was ordered to “scrub” the Soros episode of Saturday Night Live, and literally within 24 hours every single copy of it on the net was scrubbed. These people didn’t play fair, and the money behind the fraud was staggering. Some of it is of course just died in the wool Clinton/Woman hate. But I know for a fact a large sum of money was funding this.
That is naive, IMO.
GE stands to profit big from Obama’s green energy grid plan. GE can build the windmills, but cannot get the electricity from the windmills to the consumer, and doesn’t want to pay to do so.
Obama wants to let GE build the turbines (big profit) and have the taxpayer pay for the grid. The taxpayer, of course, gets none of the eventual PROFIT from this grid we will build - GE gets it. Its a win-win for GE, and likely was in the works and the sweet deal promised to GE long before the primaries.
I didn’t say I was sure. I just hoped. Because he did have a nose.
And if Russert had discovered the GM story, you can take it “to the bank” that Russert would have NEVER missed the opportunity to break such a big story. Even if he hadn’t pressed Geithner hard, he’d have had a better shot at discovering this news.
Then again, you think about all the connected journalists in D.C., and none of them knew or they each would have trampled their three-year-old granddaughter to get to the phone and tell the producers they had breaking news and to send a limo and hair dresser and makeup artist immediately!
Susan, once more on Tim Russert (and I promise to be done with him). Russert was not “Mr. Meet the Press”, highest standards journalism in his final years after he was given all of the political programming responsibilities. He, like other media outlets had apparently made the decision to not just report the news but be more involved in the outcome.
Until March of 2008, I watched MSNBC almost exclusively - then for my own sanity and those around me, I had to stop! Russert was on “Morning Joe” every morning. He was on “HardBall” and “Countdown”. He was on Andrea Mitchell and Nora O’Donald’s programs daily. He always had that big smile and very positive. While he didn’t say much negative about Hillary and the others, he said nothing about them. He only talked about and gave BO accolades.
Like Chris Matthews he had a 20-21 year old son that was very wrapped up in the 2008 election and no doubt very proud his Dad had such a huge role. Just hours before Tim’s death, it was reported on MSNBC that the son had called his Dad and asked, “Where are ‘we’ with electoral votes.” Perhaps I am reading into it more than I should, but I would bet money that the son was not asking about Hillary’s electoral vote potential or McCain’s.
Along with hiring and working closely with Andrea Mitchell and Nora O’Donald, Russert also hired Chuck Todd, the political director for NBC, MSNBC. Chuck followed Tim’s lead with daily, hourly appearances plus wrote the FIRST READ Blog, updating it all day long but with numbers to back up his always glowing reports for BO. Once the young AA anchor woman, Tamera said to Todd, my Mom and family live for your reports. To his credit, he said, “that’s scarey.”
When Tim died and during the weekend memorial, Chuck Todd and the election night guy with NBC who has called the winners in every election for years had a conversation about how Russert had predicted the 2000 electoral tie and he was again predicting a tie of 269 to 269 for 2008. Todd said to the election night guy, “now you remember this because we are counting on you to make this happen” - whatever that meant.
Bill O’Reilly said more than a year ago that NBC/MSNBC/GE were simply trying to be the liberal left network competing with right-leaning FoxNews. Even though their ratings have plummeted, they remain on the air. Who knows? Yes, money was burned through like it was $1 bills instead of $million checks for the Obama campaign. We would probably go march in the streets and throw granades if we knew everything that went on. For whatever reason, Tim Russert had one goal in mind for 2008 - nominate and elect BO!
If their only incentive was money, why are they STILL doing it, post election?
Susan, you’re not being fair to Gregory. He did pry outta Geitner that he had only, ever been a public servant and nevah, nevah had worked on Wall Street. (He just worked with Wall Street, not on it). He mentioned the stupid bonus money long enough to allow Geitner time to apologize to the bigs for threatening to tax that bonus money and that he too was outraged for minute when he realized that we realized he made that deal last September. Then lets not forget how honored he is to be on Obama’s team just like Gregory and that he could happily announce today that he was getting some help in Treasury. No mention that the help from coming straight from AIG’s board room. All this in the first 5 minutes when I had to change the channel to keep my breakfast down. Then I almost really lost it when he started the exact same talking points at beginning of FACE THE NATION. Yuk.
I apologize, and I hang my head. You are correct, sir! Thank you for setting me straight.
And WTF — no panel — I hate that. I like the panels / they are highly amusing to clue us in on the ruling class’s thinking. (I used live for seeing George Will look down his nose at Donna Brazile on ABC’s This Week, but my DISH satellite co. is battling with the Seattle ABC affiliate which wants 82% price hike, so no ABC since, lo, December 2008.
Geithner’s obviously had a few tap dancing lessons recently, but he’s a long was from doing any Nicholas Brothers routines.
I don’t think Wagoner will need to clip the Sunday grocery coupons or ride the bus down to the unemployment office, nor will he need to think about down-sizing to a double-wide.
Or flying Coach.
Whatever the cash value of his Platinum Parachute, be advised that they can scapegoat ME for 1/2 of that amount, any day of the week.
My understanding is that Wagoner is not leaving the company — at Obama’s request — for just the reason that he would get a big golden parachute if he did. Wagoner is going to take some “other” position supposedly. I believe that was in the Washington Post’s article but might have been online at CBS or ABC.
Sorry, I don’t share most of America’s belief right now that contracts should not be honored. Are the contract terms that give millions to failed CEOs outrageous? OF COURSE.
It’s fair to be mad at the laywers who connived to get those terms and the companies who agreed to them. BUT it’s unfair and unconstitutional to declare the contract null and void without benefit of a judicial ruling or stockholder vote.
ANYONE who has worked for a company run by more than 12 white men in neckties and suits in this country since 1973 has seen his Contract used as toilet paper by Management AT LEAST once.
Unless, of course, his union had some cajones and wasn’t busy selling the membership out for Cadillacs and whores.
Did you notice the Bloomberg paragraph towards the end? He’d been forced to take $1/yr as salary and to give up many perks. Still, if he pinched pennies in years past, he might be able to eke by.
The AIG debacle wasn’t going to happen to him twice, right? So this is the salvo. Do it right or hit the road. Oh. And we’ll be checking your pockets on the way out.
It is interesting that Nardelli, CEO of Chrysler, and former CEO of Home Depot who left with hundreds of millions in his compensation package, and former GE guy, was a Bush pioneer. Yes, a former Bush pioneer like Ken Lay gets to keep his job at Chrysler, but Wagoner, a real GM person gets the ax. Not that Wagoner is so great, but having 0bummer make the decision to keep the Bushie and fire Wagoner is unnerving, to say the least.
No, folks, not Communism - Fascism.
From Wikipedia:
“Fascism is a radical, authoritarian nationalist ideology that aims to create a single-party state with a government led by a dictator who seeks national unity and development by requiring individuals to subordinate self-interest to the collective interest of the nation or race.”
Sounds eerily familiar, doesn’t it?
It sounds like time to move to Costa Rica kids.
Now, THAT will be a real Learning/Character-Building Experience for ya!
Been there, Done that, back here 30 years ago.
Hey!! What happened to the post on the Catholics angry at Obama?? I was just starting to read it and….poof! gone…
I saw that also, maybe she took it down for some editing?
Is this a trap of some kind? There are other conditions on other companies and the administration is buying the right to dismiss CEOs with the bailout money. I don’t have a lot of sympathy for GM since they dug their own hole, but maybe they should just “say no” to bailouts. BTW Susan, does Mr Wagoner get to keep his “golden Parachute”? Mr Geithner wouldn’t answer when asked about the size and scope of expanded powers of the Treasury or what size companies could be for exercising those powers. It could conceivably include every business in the country.
For the first time in my life I am petrified for my country.
At first I was cautiously watching, then a lil nervous, then scared…..now holy shit I about got whip-lash when I heard this on the news tonight.
This is extremely bad for GM and the U.S. economy. If Obama will do this to GM, they will do it to any of the bailout recipients (i.e. all the banks). Don’t be surprised if there is a major selloff on Wall Street directly as a result of this. Let’s hope the person Obama appoints to replace Wagoner remembered to pay their taxes.
Seriously, the GM board has no choice but to file for bankruptcy or resign tomorrow, this is their fiduciary duty as directors. One of the main responsibilities of a board of directors is to hire and fire the CEO. They are no longer able to do this, therefore, the company is being effectively controlled by the main lender.
The only course of action the board can take to protect the other creditors, the employees and the shareholders is to file bankruptcy. To do otherwise would leave all the other stakeholders at the mercy of whatever plan the lender wants to offer — which might not be in the best interests of the company. Bankruptcy offers the board and other stakeholders a better potential deal and more leverage against the government, who is now controlling the company.
In a bankruptcy, the court could determine that the company was being controlled by a lender and subordinate the debt, behind the other creditors such as the auto workers pension plans, etc. This has quite a number of unintended consequences Obama apparently didn’t consider.
You’re under the impression that Obummer will maintain separation of the executive power from the judicial branch.
Perhaps he even has plans to “override” the federal court system. In that extreme event, people, we HAVE to take notice and rise up! (Clearly, Obummer has already bypassed the legislative branch.) Who is the man/men/women/people behind Obummer who are the true brains of this operation, as clearly he has none.
Before we feel sorry for Wagoner let’s remember that GM has managed to ruin just about every brand of car they had and should have gone Chapter 11 a long time ago.
Frankly Wagoner should have resigned when this bailout situation first took place.
However, this is apparently a grandstanding situation for Obama. Also, the apparent replacement is more of the same.
The issue isn’t what we think of the head of GM. This is wrong. Just plain dead wrong. Obama and Geithner need to get the hell out of our corporate world. What they are doing to our country is criminal. I guarantee that this stops soon and they are all out of there.
You better believe it is “grandstanding” to try to make 0 look like a powerful, creative, gutsy leader. Oh, please, it is so disgusting. I’m sure this decision was made and 0 was informed just before Wagoner, to get his approval. I’m sure he liked it!
But, let me get this straight - Wagoner was “fired” to get the message across there would be a ’strict set of sacrifices’ before GM and others receive further bailout billions but in the same sentence is referring to restructuring under the federal bankruptcy code?? Why should they receive more money AND go into bankruptcy at the same time?
Because Geithner and Obama are buffoons and have no idea WTF they are doing? I asked that same question.
Why isn’t there a restructure of AIG, Citi and everyone else that got a bailout?
To paraphrase MeChelle…for the first time in my adult life I can say I am truly ashamed of my country….Never, ever has something this onerous happened in corporate American. Between this, Geithner saying he is open to collapsing the dollar, etc. WTF are we going to do?
Just checked the WSJ piece and it looks like most of the board is out the door. However, here’s the result of what I was saying above…
The clearest losers appear to be the thousands of bondholders and lenders to both GM and Chrysler. In both cases, administration officials said that the companies were burdened by inordinate amounts of debt that would have to be scrubbed. Chrysler’s survival, the administration said, would require “extinguishing the vast majority” of the company’s secured debt and all of its unsecured debt and equity.
There could be a serious breach of fiduciary duty by the board.
Well, then wouldn’t it have been better to just file Chapter 11 than to try this bailout thing? Or would that still have protected the debt? I’m not the best with the money stuff. All I know is that my internal crystal ball tells me that this is just the beginning of a major power grab by those freaks.
You’re spot on. That board shirked their duties — they should have filed Chapter 11 and protected the other stakeholders, including us taxpayers.
Time for the shareholders to sue the crap out of them.
The thing is that I would’ve loved it if Obama had done the same thing to Wall Street. But he’s a coward and a crook so he just handed out billions of our tax dollars but is going to act tough by punishing the auto industry. What he is doing is disgusting. The auto industry shouldn’t be nationalized. The banks should. Please, please, please vote this man out of office in 2012. We might have a shot at a real Democrat in 2016.
I wouldn’t love it if he did this to ANY company. This is not the American way. Capitalism requires that failure be allowed to happen — that’s how it works. We needed to allow the companies that got themselves into trouble to fail, pull the band-aid off, accept the pain at the time, pick up the pieces and move on.
We’re in a world of hurt here, and participating in the hatred of business is ridiculous. Last time I checked, most of us support ourselves with paychecks from businesses (except for the Kennedy family, right?). They are not the enemy — despite what Washington is trying to make you believe. Don’t allow the media to mold your thinking — you will play right into their plan that. It’s so much easier for the One to execute his plan if he has the public seething at the “greedy rich”. Most of these people that you are being taught to hate are regular people like you and I, who go to work every day, do what they’re supposed to, treat others fairly, etc.
The real evil is in the people who engineered this disaster because it suited their own need for money, power, etc. Look at George Soros gloating over what a good crisis this has been for him. Look at Christopher Dodd, who accepted some $150,000+ from AIG folks in exchange for weak oversight. Look at Barney Frank, who helped hide the truth at Fannie and Freddie. They’re all pointing in different directions to keep you from looking at THEM.
Business is not meant to be human, it’s not meant to be compassionate or caring. A business is meant to make money within the limits of the law. The government’s job is to place the limits, for the benefit of all involved. When the government places itself into the position of social engineering (i.e. home ownership for low income people or any of the other crappy, socially motivated laws), we end up in trouble. They never seem to be able to guess what the unintended consequences are.
I’m mad as hell, but not at business. Our government needs to get out of the way.
Tony Soprano/Obama. This administration operates like the mob. It’s really tragic to witness.
ROFLMAO…the mob…Okay from now on it’s Don OZero. Well, at least I can get a giggle out of it.
No, this administration operates like a HERD.
A MOB has a leader.
So does a herd. Usually the dominant female. Heh.
http://thebulletin.us/articles/2009/03/13/herb_denenberg/doc49b840333ee87374341303.txt
Not to be OT…Obama, A Fraud You Can Believe In
Great article and in a Philly paper, there are only a couple comments but they agree with Herb (who by the way was the local news guy that coverred consumer complaints for years)
He was probably a stumbling block for the administration to nationalize the company, so the cut him loose.
None of the bailouts should have occurred. NONE of them. Chapter 11 restructuring is well established and more than adequately designed to unwind any failed business in an orderly way. This filth were witnessing is treason. You cannot maintain allegiance to the Constitution AND violate it. I really hate these bastards.
More than 100 car/truck companies have failed in the USA since 1900. What’s 2 or 3 more?
I have a Question, but since i stopped relating to democrats after what they pulled in the primaries they elected THAT ONE into office. What is the obsession with getting back a rich people, liberals seem to have. And as far as i can tell this is what lead to us electing this fool. I can understand people wanting businessmen to be honest in their dealings, but in wanting to stick it to the Rich we have ended up with individuals who not only want to control them, but to control us as well. From what i can tell Germans had always nursed a hatred for Jews, Russia, and any individuals that were less than perfect long before Hitler came on the scene. Hilter just used those hatreds to drag them along and get them to do things that was against their best interest. Personally i think the time has come for people who seriously have a problem with this to put petty differencees aside, and defeat these fools before they gain way to much power. Screw 2012 in 2010 we need to get obama’s enablers out of office. Which means we need to vote against democrats in the Senate and House Races. America is the last place you can find both economic and personal freedoms. And once we loose it here where else can you go? It’s time to put the petty differencese aside and push back against these fools, because when they finish with the bankers, wallstreet and the car makers the next people they are going to come after is us.
kgirl…liberals live to destroy personal wealth. Period. It’s derangement. I see it here all day long too. People whining about sticking it to the rich. Well, then who pays salaries, runs companies, who are the doctors, lawyers, etc.? Why go to school, work hard, if you have to hand it to people who shouldn’t have their hands in your pockets? It’s an obsession with the left, which is what Rush got a huge standing ovation about at his CPAC speech. The left will only be happy if we all live in abject poverty together, while Nancy flies around the world in her Jumbo Jet. What people fail to realize is that even in Soviet Russia there was an elite who sat around eating caviar all day long while the people starved. That, my friend, is what the left wants. They are jealous of success and live to destroy it. It makes me vomit. Our forefathers are all rolling over in their graves watching this crap.
Okay, I can’t stand what Obama is doing but you need to go back to Ann Coulter’s site if you are going to start defending the crooks on Wall Street and the lazy masses who deserve to die in squalor. Please. Obama is doing exactly what you want him to do - protecting the rich and allowing the people on Main Street to suffer - so I guess Obama is your guy.
Disenfranchised, I would respond but I don’t understand your post. So, you think you should choose what people’s salaries are? Why? If you aren’t doing the work then what business is it of yours? It doesn’t stop you from earning a living. That’s what the problem with the leftie envy of wealth has logic-wise…just because someone else makes money doesn’t stop you from doing so. That’s why we’re America. We’re entitled to “life, liberty and the pursuit of happiness.”
“What people fail to realize is that even in Soviet Russia there was an elite who sat around eating caviar all day long while the people starved. That, my friend, is what the left wants.”
This is exactly correct.
And now in Russia there is a further stratification of society. While before there was very little food to be had, now there is plenty- but its so expensive the working folk can’t afford it. This is how bad it is: my friend is a rock star from the 70’s who plays in Russia occasionally. The last time she was there (last year), she said she was struck by how much luxury stuff is available now, as compared to the past- but the prices were astronomical. The joke was that she felt she didn’t have enough money for this stuff, either. Needless to say, she’s a multi-millionaire. How sad is that? I’m beginning to wonder if this is where we are headed.
Obama & his treasury lackey are both incompetent, political hacks who have no experience, judgment or capacity to understand, much less fix, our dire situation. “Everyone is equal, only some are more equal than others.
Forget about the firing. Why in the world did the USA give them the money (taxpayer money) in the first place?
If you are going to seek control and fire, don’t give them f**** money.
Or, if you are going to let them “restructure under the federal bankruptcy code” no need to infuse money.
He fired him, the stock market will fall tomorrow ahead of the G20 and Russia and China and Soros will get what they want. The one world monetary system!
That won’t happen. Obama will be impeached before that will happen. What I predict is that the USD will collapse against the Asian currencies in about 24 months after which there will be no choice but to start manufacturing stuff over here again. Its kinda funny that we will do a full 180 on out sourcing.
Outsourcing only works when you have something that you can sale to the people that the work has been outsourced to.
Who’s going to impeach him? All those superdelegates who are the reason he’s sitting (long enough to take pictures anyway) in the Oval Office? All those spineless members of Congress who wouldn’t impeach Bush?
Just watch the banks who can hand back the tarp funds they got as quickly as possible. Who in their right mind would hold on to any money the government gives you. After all it comes with strings that are attached after you take the money.
ONE dollar of Federal money means FIVE dollars of Federal control/interference.
No one is asking the Marketing Question:
Will the new GM car lines be called LADA or TRABANT?
This is an old post, but it feels appropriate. http://iowahawk.typepad.com/iowahawk/2008/11/lemon.html
I like this one:
Crash Test Dummy
GM CEO Resigns at Obama’s Behest
(FROM: Politico)
So, the American president is now essentially terminating a private sector chief executive? Hello? Doesn’t this raise a red flag for anybody? Anybody?
I don’t care that Wagoner probably should go. I don’t care that General Motors is in the need of radical changes from within, or that such changes can really only come from failure. I don’t even care about the argument that personnel adjustments should come in companies which take taxpayer money. Simply put, I care that the very top chief executive in a seminal American industry was constructively discharged by the president of the United States.
Hear that sound? That was the sound of the founders of this nation, imperfect men who founded America on the foundation that hers would be a limited government, as they rolled in their graves.
I am very courious how Wall Street will react to this news.
Two hours before the open, futures are broadly down.
“I don’t care that Wagoner probably should go. I don’t care that General Motors is in the need of radical changes from within, or that such changes can really only come from failure. I don’t even care about the argument that personnel adjustments should come in companies which take taxpayer money.”
about says it all… you are simply blinded by Hate for The One. Give into the Hate… let it consume you…
Is it just possible that something might be wrong when a sinking corporation retains a CEO who has presided over 4 years of steadily worsening losses that have finally come to total $82 billion? Who makes those decisions, and why?
GM had a $37 billion loss in 2007. How do we account for the fact that Wagoner’s compensation rose 64% that year, to $15.7 million?
Maybe I just don’t understand free market capitalism. I always thought that rewards were supposed to be related to accomplishments, and that this was what made the system work so well.
It’s not that he was fired it’s who fired him.
Yeah. Now Obama isn’t channeling Lincoln, JFK, FDR, MLK…..he’s thinks he’s Donald Trump “YOU’RE FIRED!”
The Apprentice Whitehouse Style…….
OMG I’m laughing so hard…I said that to my mom last night…So the Fraud thinks he’s Donald Trump now? ROFLMAO.
Who else was going to invite him to buzz off? Apparently not the board of directors, who supposedly look out for the best interests of the company and its share holders. As billions in losses piled up and as the value of shares plunged, they responded by more than doubling the guy’s pay.
While I’m all for free market capitalism and the private management of private business, maybe a line needs to be drawn when it comes to hijacking. That happened with AIG and the Wall Street banks, and it looks like the same deal at GM. There’s an obvious pattern of high-level management becoming enormously enriched while the companies they manage are simultaneously reduced to total ruin. Is that supposed to be part of free market capitalism?
There are always cleverly contrived, pre-existing escape plans in place. Wagoner, for example, will be denied severance pay under the provisions of the previous bailout. But he’s got a contractual retirement plan with GM that will pay him another $20 million on his way out the door.
How is the government supposed to respond to the wreckage these people are leaving in their wake? Should Wagoner have been allowed to remain in charge, when a couple of million jobs are at risk?
And now the guy in charge over at GM has been with the company 25 years. How is that change? Maybe he’s just more willing to do whatever Obama wants.
Hmmmm…..would you like one of the panel to run the company? Maybe we could find someone with no experience in industry, automotive, or running a business in general. Oh wait, that’s our president — maybe HE could run the company! Oh. He already is?
That’s really funny.
[...] [Updates] Rick Wagoner: Slaughtered As a Triumphant Obama Holds Rick’s Head High : NO QUARTER [...]
LOL! I like the term “Hopenchange”, and shall forthwith steal it.
Make no mistake. This is about reducing legacy costs for retirees. Just wait until your company is in the same position. An added bonus for them is…..Us old farts can`t get health care and croak….less pay out for social security.
If you don`t think this could happen, just remember, it was not long ago that trolls were laughing at us for saying socialism.
Speaking of trolls- they seem to be strangely silent lately…
AIG engaged in criminal scam? Is this the reason for Cuomo subpoenas?
Must read:
http://zerohedge.blogspot.com/2009/03/exclusive-aig-was-responsible-for-banks.html
And what did AIG and who ever AIG funnelled money to sacrifice?
This story has hit the financial blogs today. It’s definitely worth a read.
http://www.nakedcapitalism.com/2009/03/guest-post-banks-were-profitable-in.html
Also:
http://market-ticker.denninger.net/
The Country’s in the Best of Hands.
Aw, thanks for that!
I have done two Stubby Kaye roles (”Nicely-Nicely Johnson,” “Marryin’ Sam”) on the stage. My late father, a local pol, also did “Marryin’ Sam” a few years later.
Every time Shrubbie would f**k up, insult our intelligence or negate the Constitution, Dad would call on the phone and we’d do, “The Country’s in the Very Best of Hands,” as a Tenor-Baritone duet and laugh our asses off like a couple of schoolgirls on their First High.
Thanks for the link. Now I can get Yoko to see/hear the whole song, so she knows what I’m singing every time Odipshit comes on the screen.
And, since I’m out of work, I am available to play “Big Daddy” Pollitt, in case they’re doing Cat on a Hot Tin Roof in a theater near you!
“I smell MENDACITY!”
So, are all the union bosses who heralded BO worried yet?
When will we see the axe taken to AIG and all the others…oh no, they have the protection of Dodd and Franks!
Free enterprise is now dead in this country, and investors should and will pay attention.
The government will now control returns from any business they choose!
dodd, Frank but mostly Obama. Obama was the 2nd leading person to get contributions behind Dodd and HE managed to get in a few years more than others who where in the Senate Decades got from the financial people.
The O extracting sacrifices indeed. That’s a joke. Where did I read what and who all he’s taking to Europe? It BEGINS with 500 staff.
BTW, I thought it was Nardelli, fresh from running Home Depot stock into the ground, who set GM up for failure. And the Boards who approved these failing businesses - why can’t we have their heads on pikestaffs? Oops, figurateively speaking, of course…
We need to stand up and stop this - This guy (BO) is out to ruin our country. Wake up everyone!
Yes, there has been lots of fraud, waste, and poor management by the automakers, just as there has been in the financial sector. But this is scary. This is the plan/pattern that has emerged:
1) Give a huge taxpayer bailout with no strings attached, no forethought, no insistence on an orderly bankruptcy, etc.
DO NOT, whatever you do, hammer out any deals or concessions or conditions BEFORE dispersing the funds.
DO NOT do anything practical like allowing a company to fail, unwinding assets and allowing the free market to take it’s toll, while cushioning the general economic blow with judicious taxpayer funds if need be, linked to them being broken up and returned to a smaller competitive status. Just dump a bunch of the people’s money on them in one fell swoop.
2) Gin up public anger at the companies themselves
3) Use that anger to come in and grab control of industries and markets in a draconian way, that never would have passed public muster had it been suggested on the front end, rather than the back end.
Voila! Hopenchangen!
So Obama is indicating that the GM CEO is in over his head but fails to recognize that about himself?
No one can speak truth to this power…or he’ll get you. It’s a very scary state we’re in.
Will it be that they are now producing cars nobody wants and with 0bama takeover they will produce his cars nobody wants?
One size does not fit all!
I’m 5′9, hubby 6′3, daughter 6′, son-in-law 6′7, and our two grand-daughters are catching up.
We refuse to be crammed into a “kiddie car”, and will damn well walk first!
I’m very happy with my Chrysler van, and we have always had Ford trucks.
America can make a passing grade, if the fascists stay out of the way!
I hear Hugo Chavez does these kinds of things too.
Sean Penn must be tickled pink.
“HOPENCHANGEN?”
Okay, that’s going to get an award for best one of the day. I can’t believe how hard I’m laughing. Hahahahhahahaha….Sieg Heil Fraudbama!
If he can fire a CEO of an auto company how do these CEOs of the big financial institutions stay in their jobs? Oh, dumb me. They bought him the presidency and he has to reward them now. I fear for our country more every day. I am so scared for my dear, sweet grandchildren. Something has to be done to stop this administration. It’s been only 3 months and look at how much damage had been done already!!
It’s not a matter of Obama being right or left. That talk leads nowhere. It’s who IS he working for?
Obama isn’t right OR left. He’s so far off the charts towards Facism that it doesn’t count anymore. That’s why we all have to stop the party talk and get over ourselves.
Yes. He is an absolute power-hungry fascist, beholden to some very deep pockets, many of them not even American.
He has played the well-meaning Left like a fiddle, the FOOLS.
Wait until he throws Pig Pelosi under the bus (again). And Soros. Ouch.
He is Il Duce, or as my Navy-vet hubby calls him, Il Douche.
Go Sassy!
Why on earth does anyone think everyone has to drive some small car? If you can pay for the gas, go for what is comfortable. And anyway, the entire Cadillac line is gorgeous, and when I am ready for a car, hopefully they will still be allowed to produce them under Leader Obama. I have never heard of the president firing a CEO of a PRIVATE company! Unbelievable!
You are what’s wrong with America.
Psst…my full-loaded, V-8 Hemi gets 29mpg. While the Honda Accord, the stripped down version no less, boasts about it’s fuel economy at 31mpg on their commercials.
Maybe….just…maybe…you can grasp freedom of choice.
I would rather have my Hemi give me almost the same gas mileage than that ‘economical’ Honda.
My car looks better, performs better, can store more items in the back. It is all around more functional than that Honda….but you suggest that is what wrong with America?
Snap out of it…lol
Oh and just for good measure…..I haven’t seen any 40 year old Hondas increase their value like a 40 year old Chevy does.
Hondas don’t increase their value as they age, but they lose value much less quickly than other brands. I’ve had several Hondas that I drove to 250,000 miles, and I was able to sell them for a lot more than I could have another car of comparable age. People know that Hondas last a long time - because they do…
Why did you sell your cars? Did you get tired of it…fall for another curvier automobile? Did the color get boring?
We actually saw that in a dealership. A girl who bought a new car under new terms for a new color. Her ‘old car’ was a year old…and the same exact model…lol.
Anyway, if you are the type of person who tires of cars I am sure resale value is of importance. We don’t buy our cars with resale in mind. Mostly because not having a car payment is just so much fun.
It’s GM’s fault for taking the money and begging at the alter of DC. Lesson learned to other corporations: this is what will happen to you.
BEWARE!
I don’t understand what’s going on. Is Obama directly in charge of GM now? Why does every headline say Obama did this, decided that, fired someone, will or won’t let GM do this or that? Does having a government majority percentage in a company mean Obama now runs it/them directly? This makes no sense. He’s never run anything, and now he’s directly in charge of GM? Who’s advising him? I feel like I’ve lost my mind and my way. I’m so depressed.
It gets wrose.
Do you know who is on this so-called Auto Task Force?
There are about 20 members and except for two, NONE have ever run a company. They are all career government advisors, cabinet secretaries, and academic economists.
The only two “corporate” people are Ron Bloom and Steve Rattner. Rattner is a billionaire investment banker ( and heavy contributor to Obama) and Bloom is United Steel Workers Union advisor.
There is not a single person out of these 20 that has a shred of automotive industry experience and, as I said, like Obama nearly all have never run company or a department of a company.
Anyone who has had business relationships in Eastern Europe will recognize this model because it was last used in the U.S.S.R. where companies were run by managers selected by government bureaucrats based on their political loyalty.
BO said this morning that he will not run GM.Well, everything he says so far has been a lie except to Joe the Plumber about “redistributing the wealth.” Oh and even then heforgot to mention that he’s redistributing into the accounts of the very few at the top–you know like Castro has hundreds of millions while his people starve. No doubt now that his agenda from the beginning is total government control of all banks, industries, etc. Better get to your local tea parties.
[...] Step Down At Obama Admin. Request (Photos)…Rick Wagoner Has Gone « Regaining the Center…[Mon. a.m. Updates] Rick Wagoner: Slaughtered As a Triumphant Obama Holds Rick’s Head High : N…Michigan Messenger » Granholm on GM’s Wagoner: ‘He’s a good man’ but a ‘sacrificial [...]
I think what we’re looking at here is a weak executive and a strong congress, for good or ill. It looks to me as if this POTUS is going to be on the campaign trail forever: he’s got this one trick and generally it works.
What do other posters/commenters think?