“Capricious”: Obama’s GM Power Grab
By SusanUnPC on April 1, 2009 at 12:25 AM in American Consumers, Arrogance, Auto Industry, Banking Institutions, Economic Stimulus, Economy, General Motors & Chrysler, Obama Administration, Obamatopia Mirage, President Barack Obama
See, this is what worries me most. As Nocturnal Warrior said over and over again tonight on his otherwise light and hilarious show, we have the “Resume President.” And this move was solely because Obama’d been perceived as soft on AIG, so he wanted to be seen as tough, and add “Tough Guy” to his list of achievements.. So he was tough solely for the sake of looking tough. What’s the bummer is that Joey & Suzy Citizen, too busy to read and study the issues, will hear the headline - “Obama Fires GM Chair” - and they’ll be impressed. “That’s showin’ them,” Joey and Suzy think. They don’t KNOW that it’s crassly political, and not in the good interests of GM. Now, check out this from a panel on CNN’s Anderson Cooper 360 Monday night, which gets into the “blowback” from Obama’s power grab:
DAVID GERGEN: I just disagree with the Wagoner decision. And people say, well, you’re — it’s it’s a double standard. You know, you’re treating the banks much better. This is going to send a shudder through the banking community, “If the government can be capricious here, they will be capricious in dealing with us,” and make them even more, I think, reluctant to play.
COOPER: And, Vince, that’s your fear?
VINCE CREW: And that’s it. That’s absolutely it, agreeing with David here.
When the president of the United States can — can fundamentally interject his — his power, his authority, his — his advisers’ ideas into the private sector, we are on that proverbial slippery slope, the — the — this is not the audacity of hope. This is the audacity of power.
And those of us who — who voted for this man had no idea that this was what we were hoping would happen. And those of us who didn’t vote for this man feared that it would.
COOPER: Very briefly, Stephen.
STEPHEN LEEB: OK. He’s doing now what he has to do in order so he doesn’t have to do a lot more later. If he lets GM fail, you will end up seeing the government so much part of everyone’s life, it will make today look like a picnic.
Susan again: “… so he doesn’t have to do a lot more later. …” Well, of course. Obama’s MO is to make a swift, and easy (aka lazy ass) move that shifts responsibility onto others. Maybe the idea was that a shake-up would wake up GM’s management, but it’s also unsettling. Worse, it’s very unsettling to ALL business executives, including any who may contemplate investing in Geithner’s toxic assets plan, which is supposedly a “one-way bet,” as Krugman calls it, that leaves TAXPAYERS holding the bag for every toxic asset purchase that fails to increase in value.
Obama’s move has also unsettled the auto workers, who fear, more than ever, that GM’s last-gasp effort at restructuring is sure to fail and that bankruptcy comes next, in which a judge will demand hard-nosed benefits cutbacks to workers.
Obama’s move has further pissed off the auto companies who haven’t needed or asked for government help: Ford and all the foreign companies who make cars/parts in the U.S. Why give GM an advantage their company won’t get?
Here is the full discussion segment, from the transcript:
As we mentioned, President Obama is taking heat tonight for demanding Rick Wagoner’s resignation. There’s that kind of anger. Then there’s the kind that has nothing to do with presidents or CEOs or beltway politics.
It’s the kind of captured by local station WWMT outside a Chevy dealership in Wayland, Michigan, that had just announced it was closing and that everyone was losing their job. Take a look what happened, employees fighting each other. It’s actually the second fight of the day there. A short time later, one of the men involved came and spoke to the camera.
(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: It doesn’t really matter how hard that you work, because there’s always somebody a little bit above you that has the right to control every decision, every ounce of energy that you put forth effort to. Don’t you have the right to be a little bit mad when somebody says, hey, we’re all done?
(END VIDEO CLIP)
COOPER: “Digging Deeper” now with senior political analyst David Gergen, economist Stephen Leeb, author of “Game Over,” and ethics guru Vince Crew, author of “Everyday Ethics, Everlasting Consequences.”
David, what do you make of this? I mean, it has happened before. But we’re kind of in unchartered waters. Firing of CEOs by the government?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: We sure are.
And I think that we’re going to see more of it, Anderson. The — the toughest part of this is that the government had no good choices. President Obama had no good choices. And what they have decided is, we couldn’t get the bondholders to agree to any kind of out-of-court settlement.
We couldn’t get the UAW, the automobile workers. We’re going to force them. We’re going to give them 60 days to do this or we’re going to take them into bankruptcy and do it through a court.
I — all of that is understandable. It’s tough. It means more layoffs are coming. I think the surprise was firing Rick Wagoner, a man who, as CEO, had done a very good job restructuring the company. And a lot of the congressional delegation, Republicans and Democrats, expressed surprise.
And there is this question now of a double standard about, why do you treat the automobile companies in one way and treat the banks in another way? I think that’s going to be very tough politics for the Obama administration.
COOPER: Vince, what about that? I mean, there are lot of — I was just in Detroit two weeks ago. And a lot of the autoworkers there are saying to me, look, there’s a complete double standard. A lot of these CEOs on Wall Street have cost the government a lot of money. They have gotten more bailout money. Their companies are tanking probably even more than some of these auto companies. They’re not being fired.
VINCE CREW, AUTHOR, “EVERYDAY ETHICS, EVERLASTING CONSEQUENCES”: Well, you’re right, Anderson. That’s happening.
And, also, when — when people are looking at these complex situations about the economy, and the economists come out and they say, well, something had to be done, people go, wait a second. In my own personal life, if — if I have a failed business or if I make bad decisions, there are repercussions for that. Why aren’t these guys having repercussions? And when it comes to dismissing a CEO, that’s the job of a company board, not the president of the United States.
COOPER: Steven, is there a double standard here?
STEPHEN LEEB, ECONOMIST: Not really, I don’t think.
I mean, basically, I don’t think the government had much choice. I mean, it’s really AIG fallout, Anderson.
The public, I think, would be furious if we were giving ever more money to a company, and sort of rewarding, in a way, the CEO who at the helm when the company basically went under and required all this money. I mean, it has to be publicly acceptable.
And in answer to letting the company fail, that’s just not an alternative. I mean, how many more home foreclosures would you have if you have a million people out of work? That’s just not doable.
COOPER: I know David wants to disagree with you here, but I — but I have just got to take a short break.
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I`m not sure people understand that now that the Government has promised to honor the warranties, the American taxpayers are on the hook for ALL GM cars sold around the world.
This now means we are subsidizing GM products anywhere they are sold.
As the owner of the biggest Government Motors Company dealership at 1600 Pennsylvania Avenue (O’BAMa Car Dealer)I heard that Obama was handing out his new business cards at the G-20 offering free car mats with each new car purchase and a set of classic DVD movies with the purchase of a hybrid.
LOL!
I also heard that Obama came bearing DVD and CD gifts for world leaders.
For Japan he brought a set of famous World War II Pacific War movies (the ones that show Japanese as monsters).
For France he came with a boxed set of Jerry Lewis DVD movies.
For England he brought a set of Beatles CDs (not realizing that they were not Americans).
and for the Queen of England today he is presenting to her a commemorative set of Freddie Mercury CD’s.
That should go well with his wife’s J. Crew outfit.
http://thehill.com/business–lobby/sen.-levin-considers-defense-exec-pay-cuts-2009-03-31.html
And now they are going after Defense execs salaries. Seig Heil Obama.
There is a certain individual that has a lot of information about the company and feels that he deserves a retention bonus so that he doesn’t leave and take all the business somewhere else.
I told him he needs to go through Obama if he wants a retention bonus.
What about giving an I-Pod, to the G-20? No, he can’t , Obama already, gave it to the Queen of England., very “classy” gift.
Not only he flanked as president , but, also, as a sales person.
Maybe , he will be good as he was, a community organizer for “Project Vote”…fraud?
They should all (GM, banks, etc.) go bankrupt. Government money should be to help the workers with retraining and unemployment and to protect depositors. That’s it.
Everything else is money going into the pockets of greedy speculators.
Absolutely!
He’s got the Power Do Dah do Dah
He’s got the POWER Yes He Do
All the Do Dah Day..
wonder…would You could call what Chairman Babrack is doing a “HOSTILE TAKEOVER”..?
Fool the Fools all day Long..Oh Yes he DO…
Add Your own lyrics..we could get something going..
Don’t forget, BO is also going to force Fiat to merge with Chrysler within 30 days. What happens if Fiat decides to back out of the merger. I’m sure they are not wanting a part of the BO auto industry. Am I not understanding what is going on in that area?
Been wondering that myself Rebel. They could persuade Fiat by forcing Chrysler low offer, but how will that help either company? Wouldn’t that lower the value of Fiat?
Did FIAT contribute to his campaign?
Should the government just let GM go under and put it’s 200,000+ employees immediately out of work, along with all those employed by GM’s supporting industries? The taxpayers would pick up the tab for their unemployment comp; there’s no other industry out there to hire them. We would also have to figure out what to do about the pensions and health care of some 100,000 current GM retirees. Then there are the all of the stock holders, who would find their shares worthless…
Should you stop trolling? For God’s sakes get your grubby paws out of my pocket. And, ignoramus, this is your money too. You’re the kind of Bot that put us in this position of watching our country be destroyed. How does someone so idiotic as you live with yourself? It’s really getting hard to read your Anti-America, pro-Fraud rhetoric all day. WTF?
These same companies, that the taxpayer has to pay for, cry about “saving the poor worker”. Then they lay off thousands and short long time workers on their retirement anyway.
The same companies lay off workers while giving multi-million dollar bonuses to the executives that oversaw the “losses” they claim make laying off the workers necessary. I did a little math after reading one of those articles, one where the company had laid off 3,500 people, and the bonuses they handed out could have kept those 3,500 people working another year at least. THAT is disgusting.
Should you STFU troll? Christ, how many times a day do you lick the Fraud’s feet?
Stating the predicament isn’t licking anybody’s foot, kiddo. It’s just stating the situation.
Should the administration simply turn it’s back and let the pieces fall where they may?
Here’s what would happen: 300,000 regular people would be immediately screwed; no jobs, no pensions, no prospects. A major component of the American auto industry would be sold off at firesale prices and wouldn’t be back. Unwarranted GM products would be sold off the lots the same way, as dealerships across the country went bankrupt. Meanwhile, CEOs would bug out, taking millions each along with them.
Who picks up the tab, if they go into bankruptcy but the courts try have the industry come out the other side still running? I guess that must not be such an attractive prospect, since Obama hold that out as a threat if they don’t come up with a reasonable plan in 60 days.
Cyanide…everything you say is nonsense. Sorry. I’m too busy trying to save my country from people like you to even address that kind of stupid ass post.
Who’s going to pick up the tab once our country is bankrupt? Which is where we’re headed. 9 trillion in 10 years. The majority of Americans are already struggling just to survive. How much more can they give?
Well gee, if we keep borrowing money from countries like China, Russia and Japan we can pay for all of this.
How many trillions are we in debt now? Who pays for that? Oh that’s, right our children, grandchildren, and great-grandchildren. But who cares about them because the great Obama wants to spend, spend, spend.
I’m gonna try that. Let’s see, I’m broke but I will spend more money I don’t have and had to borrow and can’t afford to pay back to get out of debt. Brilliant!
“turn it’s back …”
Go back to high school. Take remedial English composition.
*S* Yep, the typos certainly slip buy me on occasion.
gosh, you constantly exhibit any grasp of basic logic in your attempts to defend Barry. If they file chapter 11 they don’t just “go under”. They are forced to restructure and many companies emerge stronger because of it. They would be able to renegotiate all contracts, including labor, and that would be a good thing. The over riding point is if the government feels the need to give money to industry (which is stupid, again let them file chapter 11 like everyone else) that doesnt necessitate the intervention of government in the everyday decisions of the company.
The president fired the CEO and you dont see the problem with that? You think that fits in the job description of the potus, do you?
This person is either a really dumbazz troll, or someone who should have been taken off life support a long time ago, due to lack of oxygen to the brain. I can’t believe any American citizen (moron) would defend this crap. It’s so hateful I just don’t get it.
I was stating an opinion–which wasn’t a flaming pro-Obama statement, btw. Nor was there anything even remotely hateful about it directed at anyone.
Consider the hateful and angry tone your own response.
So you’re a “concern troll?” Still ridiculous.
I very much dislike the level of government involvement. On the other hand, when a corporation asks the government for billions of dollars of the taxpayers’ money, they have to expect that the government will have something to say about how effectively they utilize it. Especially when they’re back with their hands out a second time.
I fault the Obama administration for not having taken a much stronger stand with the financial industry CEOs. They took justifiable heat for being asleep at the switch. Now they’ve learned something. It’s hard for me to sympathize with Waggoner. The guy still made off with 23 million bucks as he exited. His performance didn’t warrant that level of reward. That’s not free market capitalism. It’s something else entirely.
Cyanide…you’re missing the point. You can do the concern trolling all you want. The rest of us know how dangerous the Fraud is and we are scared to death. You keep on collecting the little paychecks from the Fraud. Honestly, no one here pays attention to your drivel. Other than to puke, The Fraud’s a joke. You voted to destroy my country. I feel sorry for you, I really do. It seems that you really just don’t read or get it. But my sympathy is waning while your FREAK of a boss sells America down the river. Grow the fuck up troll.
I was carrying an M-16 in Vietnam about the time your parents were probably born, kiddo. You have much to learn.
Which side were you on?
You know, you folks can really be jackasses sometimes.
I truly hope you never have a similar experience. Although I suppose it might open your eyes.
I would normally apologize (fat chance), but from a cumulative reading of your posts, I picture you sitting right next to Jane Fonda on the gun turret pretending to shoot down American Pilots. I’m sure your hero 0bama would have done the same. It REALLY IS the portrait you paint of yourself here at NQ.
The sad thing here at NQ is the tendency so many have to attack visitors perceived as being “the enemy”, rather than to thoughtfully address the opinions they express. Personal insults aren’t intelligent discussion. They only get in the way of it. They also reveal a lot more about the person hurling them than about their intended target.
The sad thing is that people like you voted to destroy our country, and you’re not polite enough to apologize for your major F-Up. Pitiful.
Yeah, whatever. In the future, I’ll try to be more respectful of our hosts here at NQ by not responding to the personal insults and baiting. For drifting off the topic by having done so, I sincerely apologize.
You never did give an answer as to which side you were on.
“You have much to learn”
Are you kidding, you can’t even make a well reasoned argument. You are an ideological, partisan apologist and ignore truth and fact to make everything work out for point of view. If you really did serve in Vietnam it’s sad because it is YOU who still has a lot to learn and you’ve been on the the earth plenty long enough to have learn it and still haven’t. So there probably isnt much hope.
Now you’re spamming the thread. That is not okay.
So you support immediate drug testing and house searches of welfare recipients because taxpayers “have to expect that the government will have something to say about how effectively they utilize it.”
cynic,
again, you dont address the level of stupidity in your argument,”what would you have them do let it fail, 300,000 jobs would be lost instantly” do you not see the stupidity in those statements or are you just intentionally being deceptive?
Chapter 11 keeps the company going, nobody loses their job instantly. what would you have them do?, have them file for chap 11. if you honestly hate government intervention you would see that. You’re a ridiculous apologist that lacks any ability to reason logically.
Unfortunately, cynic, GM is headed for bankruptcy regardless of what we do. They’ve been working on a failed model for years. All the American taxpayer is doing now is trying to recusitate a corpse. Even the new CEO is saying Chapter 11 is where this is going, where contracts will be renegotiated, restructuring will happen, workers and bondholders will take sizeable losses but maybe, just maybe GM can pull out of the tailspin.
Throwing money at these systemic problems simply isn’t doing the job or making life easier for anyone. It’s simply prolonging the agony and delaying any “real” turn around, which is what we all want in the end.
Alas, it may turn out that you’re right. I actually do understand how extreme some of the administration’s desperate measures are becoming. I’ve agreed with many of them–or rationalized them, you’d probably say–because I have far darker visions about what their ultimate failure could mean.
I tend to see the waters rising on every side, and the Obama administration frantically trying to sandbag a dozen different weak spots in the levee all at once. The worry is that failure at any one critical point could cascade into sudden collapse of the entire structure. My dark visions don’t revolve around an orderly reset of the American economy, but around a collapse into total social chaos. Maybe that explains why I tend to be more supportive of the sandbag brigade.
Steve Leeb did not answer the question Is there a double standard.?
Why doesn’t Obama just let these companies sink. Auto companies have come and gone, there’s someone else around the bend that can built autos that Americans WANT to buy.
Obama needs to take the promised bailout money and give it to the taxpayers to get the economy rolling.
You pay off the taxpayers debt with taxpayers money.
The taxpayers SHOULD come first.
Here’s an article about a company that is ready to mass produce hybrid vehicles that will get 100mpg, look good, and have the oomph people want.
http://www.ncbr.com/article.asp?id=98637
You hear about this all the time and then you find out that they want 100K for each car. Plus bio diesel is not that easy to get a hold of.
It would be a 4 seater in the 38,000 to 58,000 range. They are going to have one ready for the Denver Auto Show, today, April 1st and can produce 10,000 a year to start with.
That is my point nobody will buy one of those cars if the government does not step up and give some real incentives to buy one. But that will never happen.
Is that the “three wheel car”? Honestly, isn’t the fact that it’s a hybrid enough? Why must these guys insist on designing something radical? Nobody wants a George Jetson car right now. They want an affordable car that gets good fuel efficiency. The best “value” will win. Value being cost to operate… cost per mile… how much are the payments? etc.
Don’t even need to go that far. Just force GM/ Ford to take that patent for the (fill in the blank) that they’ve had in the safe since my cousin’s brother’s barber’s chiropractor’s mailman invented it in (fill in the date) that lets the cars get 100 mpg on a gallon of water/grape juice/cat urine (pick one).
That’s why The Big Three/Big Oil/John De Lorean (pick one) had Kennedy shot.
http://www.youtube.com/watch?v=ztFDqcu8oJ4
Here are even better one. Air Cars that fuel up on Air and are less than 20 grand. I’d love to have one of these. Willing to bet they won’t be here anytime soon?
http://www.mdi.lu/english/
That’s is not are and they’re scheduled for release this year in Europe. There are also Air Cars being developed in Australia, but I don’t know the date of their release.
i have said from the beginning.IF all that tarp and stimulus money had been given to.We the people..
we would have paid of those loans for houses cars ect,the banks would have got their money we would be out of debt.
starting new business keeping old ones perking along,end of recession.so there thats just my 2 cents worth.
The reprecautions of this boneheaded decision will further sink the Ship of Fools called the Obama Administration. They should have forced the board quietly to fire the CEO not just fire the CEO. There will be calls now to do the same to the banks and with in 10 days they will have no choice but go ahead and start eliminating the management at certain banks. Which of course will cause the collapse of Citi and BoA and perhaps even more banks.
I hope that even the Democrats will come to their senses and realize what a huge mistake they made backing this guy and impeach him ASAP.
BO probably just managed to eliminate and other million jobs that will affect probably 5 to 6 million people (spouses & children & relatives).
Then I read that they want to shelve the Volt, saying that the hybrid plugin was a huge mistake. That is the only car that made sense at GM. They should have given a 20,000 grant for anyone that bought one. Even if they only subsidized the first 100,000 vehicles that would have only cost 40 Billion. These days that seems to be chump change and would have created a brand new industry with a viable and well tested product.
A ship of fools I say.
2 Billion not 40 billion
if aig gave billions to tens of billions to other banks. who will then give large bonuses to their ceo’s. can obama now fire those execs. i wonder if those perks will ever see the light of day and disclose what banks got passed money and what bonus that led to.
Like any other member of the media, David Gergen has the right to protest the actions of any President who, claiming national emergency, usurps the usual role of Congress to enact legislation affecting commerce. However, having supported THIS President over his opposition during the Democratic primary, notwithstanding HRC had demonstrated expertise in several areas critical to the robust functioning of our economy, in which he showed none (remember he insisted he would raise the capital gains tax despite Charlie Gibson’s tutorial, ‘But Sir, in the past when this has been done, revenues DECREASE’; his protestation now that BO has ’stepped over the line’ grate like nails on a chalkboard. Much too little, way too late.
jbjd: Right you are. Gergen was cheerleading BO on during the campaigns and election. You really begin to wonder if anyone in the upper echelons of our society has any sense. We know they don’t have any ethics.
For Cynic, what industry and banking must realize is that failure isn’t the only option when it comes to bankruptcy. Actually, bankruptcy is a tool and comes in many forms. The banking, investment and insurance industries in trouble definitely should be forced to take that route. Its the only way that we are ever gonna see what is really on their books and pulling them and us down. Then , we can direct any money necessary to what we deem fit. As it is now, the money directed to them is going down a black hole. We learned after the fact that alot of money went overseas. If they had to restructure through a court, we’d know everything before we threw money at them. Then, we’d know if our investment is worth it before it was squandered.
Thank you for logically pointing out the more prudent option for this failing behemoth, and for addressing your comments to Cynic. I am not bothered by the (reasoned) incursion of BO supporters to this blog. After all, by surrounding oneself with like-thinkers, one is likely not to ‘get’ the whole story. Hopefully, anyone reading this site goes away more educated as to the facts (omitted from the MSM); and, given the facility of BO supporters to electronic forms of communication, having learned the story behind the story, will disseminate these truths throughout the internet.
“Those of us who voted for him didn’t expect this…” What rot!
There is a good analysis by James Lewis today on why Obama fired Rick Wagoner:
All I would add to this is the distinct possibility that the most immediate reason is that since Wagoner was a former Duke University basketball player, Obama may have unleashed his resentment that Duke’s loss to Villanove over the weekend screwed Obama’s NCAA Brackets - which is a real priority for him.
John Lewis is spot on with his commentary about Obama, but I resent his comment about our Secretary of State, who has done a very credible job so far. I can see no reason why he threw Hillary into his commentary, otherwise his comments about Obama are spot on.
Agree. No idea why he even referenced SoS since this has nothing to do with foreign policy at all.
James Lewis is an unrepentant deranged religious conservative nutcase. This could have been the template copy about anyone right of the fringe and why we give people like this the time of day I’m not really sure.
Sorry that should be LEFT…haha. Still early here.
You must be another “unrepentant deranged” Obama idol worshipper.
Says a lot about Obama when a “an unrepentant deranged religious conservative nutcase” winds up making so much sense to me, a moderate, relatively sane liberal.
And this moron was the best pillar of society the democrats could find to run. We are so screwed !!!
Yes, if Obama is the best of the Democratic Party, then I want no part of that party for the rest of my life.
Choose your next mode of transportation carefully.
http://www.youtube.com/watch?v=CEfscN9Ppuc&feature=related
Yep, some of these new cars are just being made to sale to investors. Kinda like new fishing lures… made to catch fisherman first and fish second if at all.
” politicalidentitycrisis” me tooo for the rest of my life.
The first Barack Government Motors Congressionally approved automobile for sale:
http://pajamasmedia.com/blog/government-motors-gm-unveils-its-first-model/
like him it.s all shiny and nothing under the hood..
LOL.
Further up in this post I commented about how dumb Obama is in giving gifts and said about the Queen of England that he would give her:
“a commemorative set of Freddie Mercury CD’s”
. . . only to discover late today that he actually gave her an IPOD.
How much you want to bet had it stocked with Freddie Mercury hits?