From The Detroit News:
Well, at least now we know who’s running General Motors. The Obama White House, in an extraordinary expansion of the government’s reach, Sunday demanded and got the head of Rick Wagoner, the automaker’s embattled chief executive. In doing so, the president brushed aside GM’s board of directors, selected by shareholders and entrusted with the power to hire and fire executives, and assumed that role for himself.
While GM’s board had been often restless with the transformation of GM under Wagoner’s leadership, it maintained its confidence in his ability to get done a very tough job.
Shareholders can read the handwriting on the wall — this isn’t their company anymore.
That’s the risk you take when you go hat in hand to Washington. It ought to be a red flag for other companies and industries that might be thinking a federal bailout is the answer for surviving the recession.
From The Detroit Free Press:
The risk was there from the start.
The federal money flowing to Detroit to help struggling automakers was always going to come with strings.
But there’s a fine line between holding General Motors Corp. and Chrysler LLC accountable for a pile of taxpayer cash and inappropriate government efforts to actually run the companies.
President Barack Obama’s Auto Task Force may have crossed that line over the weekend, when it asked for GM Chairman Rick Wagoner’s resignation and demanded that Chrysler link up with Fiat in 30 days, or give up on any more government aid.
It’s hard to see how either move is far shy of actually running the businesses. And if that’s the case, if the auto companies’ federal overseers have decided they’ll make managerial as well as financial decisions, this sets an awful precedent, both on general principle and in these particular instances.
Latest posts by Carter Wood (see all)
- Farewell from a Blogger - May 25, 2011
- Activist Ignore Evidence to Back Shakedown Suit Against Chevron - May 25, 2011
- More than a Lawsuit: A Circle of Political Pressure Against Chevron - May 25, 2011