Look, I've been against the auto industry bailout since the beginning.
These companies DO NOT deserve tax payer money. These bailouts are nothing but attempts at nationalization which ooze socialism.
Politicians have benefited from Unions for decades. Placating union bosses has been a windfall campaign finance tactic for a number of members of Capitol Hill. And that is the real motivation behind trying to "save" Detroit.
Indeed, the economy has seen better times but Honda, Nissan and Toyota are not panhandling on the steps of the Capitol. Somehow, they are managing to build, sell and profit from selling cars in America.
The biggest reason these automakers are in trouble is simple: It costs the Big 3 an average of $30/Labor Hour (or 60%) MORE to produce a car than competitors like Nissan, Honda and Toyota who build cars in United States plants as well. At 40 hours per week, the average UAW member makes over $150,000 annually in benefits and compensation. Does anyone else think that's a bit much to screw some tires on a car?
What about the so-called "job banks" where laid-off UAW members can collect 95% of their income by doing nothing more than watch TV and drink coffee. The Big 3 will not discuss the exact details of these job banks, citing they are not public information.
How many businesses in this country would succeed by paying 60% more than a competitor to produce a product? How many would succeed by paying people who don't produce a single asset?
Certainly, Rick Wagoner has not performed well as the head of GM, but what gives the President the right to ask a private company executive to step down?
If GM's board of directors made this decision, I would have no problem with it. The Obama Administration is yet again over-flexing its political muscle with respect to private industry.
If Congress and The White House want to put stipulations and regulations on companies receiving Federal aid, fine. But no where in the Constitution does it grant the Executive Branch this kind of control and coercion over private industry.
Tim Geithner unveiled a plan last week, designed to give Treasury Department the ability to take over financial institutions at the Secretary's choosing.
All of this continues the Obama Administration's war on Wall Street. It's a power grab to redistribute wealth, penalize the successful and establish a communistic "equality" among Americans.
Regulation = control and power.
Team "O" wants to destroy free market capitalism. There is ample proof of Obama's war on investors. Welcome to The United Socialist States of America (USSA).
POLITICO reports:
The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.
The White House confirmed Wagoner was leaving at the government's behest after The Associated Press reported his immediate departure, without giving a reason.
On Monday, President Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler.
Pure showmanship- and good luck finding a quality exec that wants to take on that
ReplyDeleteweighty job with the control-freak Obama looking over his shoulder... while he works for
a buck a year and has 90% of his bonus taxed away.
Next they'll be telling GM that have to make all-electric cars that nobody is willing to pay $40K for.
Wagoner should of told him "we'll go BK, then"- the sooner someone stands up to this
power-mad narcissist bully, the better for this country-
Maybe it is because Wagoner sucks? Basically, he is the guy who bet the ranch on SUV's and that didn't work out so well.
ReplyDeleteThough to be less snarky, I'm not sure why he get the ax when I think the guys running Bank of America and Citi deserve it more.
I could frankly care less if he stays or goes. Yeah, he sucks. I think that's pretty obvious.
ReplyDeleteBut it's not Obama's right to "fire" him.
Obviously, this is political manuveuring from Team "O" as they prepare to give Detroit more money this week.
The bailouts are becoming increasingly unpopular, yet Obama can't afford to lose the union support which would result from unprecendted unemployment should GM fail.
First it seems that what the government is trying to do is to arrange an orderly pre-packaged bankruptcy of sorts where the existing creditors including management,the unions, the bondholders, dealers, creditors, etc take haircuts so that GM comes out a healthier company. I think the consensus view is that a smaller more efficient GM is possible and better this outcome than it going out of business. HOwever to bridge GM from here to there will require backstop financing (DIP financing however the need here dwarfs what the market can provide due to GM - more accurately GMAC's its finance subsidiary - size) that in theory a more efficient GM can repay. I've not seen all the details on the plan, supposedly it will be coming in the next few days so it is all speculation right now. There will be some sort of bankruptcy but the view will be that it will be quick, the cuts taken, and move out ASAP...with the company not being owned by the taxpayer but probably mostly owned by the bondholders and the UAW who will be taking the biggest haircuts.
ReplyDeleteOn your original point about removing execs, this is not the first time a company that, for all intents and purposes, is still in operation due solely to government backing has had its CEO removed. AIG, Fannie Mae and Freddie Mac had significant numbers of execs removed at Paulson's requst. I'd agree with you wholeheartedly if Obama asked that the CEO of say Google be removed, but if you are so desperate that you need government funds then you can't complain when they ask for your removal.
My first snarky comment aside I actually don't think Wagoner did a terrible job with the hand he was dealt. However until the proverbial brown stuff hit the fan, as it has in the current economic environment, there were strong incentives for all to kick the can downthe road. I can see the argument against wagoner as sins of ommission...he should have done more but the bank CEO's were much more sins of commission in terms of creating the problem.
From the start, Barack Obama told us who he was... a community organizer and he was for change!
ReplyDeleteIn her speech to the democrat national convention on Aug 26, 2008, Michelle Obama told us exactly what Barack Obama intended to do as a community organizer when he became President of the United States! "Barack stood up that day, and spoke words that have stayed with me ever since. He talked about "The world as it is" and "The world as it should be."
"We decided to stop doubting and to start dreaming. How this time, in this great country where a girl from the South Side of Chicago can go to college and law school, and the son of a single mother from Hawaii can go all the way to the White House we committed ourselves to building the world as it should be."
Community organizer "... TO BUILDING THE WORLD AS IT SHOULD BE"... To work for change. Just what exactly do these mean? To find the meaning of these, we must see where they come from. The term 'community organizer' was coined by Saul Alinsky and references to "The world as it is" and "The world as it should be." come from his book "Rules for Radicals" which he published in 1971. The change that Alinsky wrote about was the revolution to end capitalism. Obama is taking the write in re-building America into what THE WORLD AS IS SHOULD BE.