Morning Bell: Government Motors is Not the Answer

Conn Carroll / June 01, 2009

At midday today, President Barack Obama will announce details of his administration’s $30.1 billion plan to restructure General Motors. Despite claiming that the administration “will not interfere with or exert control over day-to-day company operations” it is instructive that this announcement is being made by the President, from the White House, and not by the company’s CEO from either the company’s Detroit headquarters  or  the New York bankruptcy court. Since March of this year when the White House rejected GM’s restructuring plan, their interventionist actions have spoken much louder than their hands-off rhetoric.

Just days after the White House informed GM that they were unhappy with the company’s first restructuring plan, President Obama fired GM CEO Richard Wagoner. The payoff from Obama’s hand picked replacement, current CEO Fritz Henderson, quickly became apparent when Henderson stood next to Obama in the Rose Garden and announced his support for the Obama administration’s new fuel efficiency standards: “GM is fully committed to this new approach.” The surreal event underscored the myriad of inherent new conflicts as the Obama administration now becomes GM’s regulator, tax collector, customer, lender, and owner. The Obama administration’s heavy handed management of GM did not end there: (more…)