March 30, 2009, - 11:15 am

GM’s Forced CEO Resignation: When You Take Govt. $$$, That’s What You Get; Will Obama Design New Yugo Next?

By Debbie Schlussel
The big story heard round the business world–especially here in the “City Formerly Known at Motown”–is the Obama forced-resignation of General Motors CEO Rick Wagoner.
I have mixed feelings about this.
I see it like the federal anti-trust exemption Congress long ago gave Major League Baseball. By accepting special government protections, you’re opening the door for the government to come in and borrow the keys to the car and use the bathroom, anytime it wants. Big Brother is never an ideal house guest. He doesn’t like to leave, he consumes all the food, and leaves a mess in every room he enters. GM took the federal money. That’s the breaks. When you take federal money, you risk government involvement–although in this administration, it seems the government is trying to run corporations, whether or not they’re on the public dole.
How to Fix GM?: Not By Firing Him . . .


But By Firing Them . . .

CEOs are fall guys all of the time in the corporate world, as Rick Wagoner clearly is here. It’s no different here, but for who is making the decision–a non-stock holder who flies around on Air Force One and hangs at Camp David. And that’s the objectionable thing here. I have no tears for Mr. Wagoner, who likely has a nice golden parachute, unlike the many workers whose jobs were lost under his “leadership.”
That said, the new GM leadership won’t deal with the unions or Barack Obama any differently than Wagoner would have under this new set of circumstances of tremendous government oversight. They won’t have a choice, nor would he have had one. But sometimes a change in leadership is necessary just for PR purposes and momentum. Still, it’s extremely troubling for a man who a few years ago was a “community organizer” in sleazy Chicago politics to be hiring and firing CEOs. Also, of note, with the exception of AIG, Barack Obama didn’t demand or get changes in leadership as he continued to pump in gazillions to many of America’s banks and investment houses.
What’s next–will Obama be designing cars and picking our choices of what to drive? It seems to me that when government gets involved in making official state cars, you get Yugos. Will we no longer be able to buy SUVs? None of this is a stretch since Barack Obama has now decided he will run GM, hire and fire, and set policy. Anything and everything is on the table. And that’s scary when you have a green-zealot running a former automotive giant. GM is planning to shed Hummer, which is now a market dud because of uncertainty about gas prices in the future and what they were last year when gas was at nearly $4 a gallon. What if Obama tells GM to make less trucks and SUVs? It’s not beyond possibility.
But while Obama is telling GM which CEO it can and can’t have, where is he on the $1,500 to $2,000 of every GM car that goes to pay for Viagra, Cialis, and other drugs of retired GM employees? I wrote about this problem two years ago, and it continues to fester. What I wrote then remains true today of where GM’s giant loss center is located.

It lost $10.6 billion, last year. MORE THAN HALF of that was its overall health care expenditure of $5.6 billion per year.
And that little blue pill is expensive. You are paying an extra $1,500 per GM car (if you bought one) to pay for the out-of-control spending (and payment of HMO paper-pushers’ salaries).

That’s where the focus should be, not on who will get the golden parachute next and how soon. Yes, it’s true that these people made a contract with GM to get health benefits and a pension, but Viagra, etc. are like cosmetic drugs. They’re not medically necessary and life-sustaining. And they weren’t even in existence when many of these people retired years ago.
Again, the state-run vehicle industry reminds me of two instances–the Yugo and Hitler’s Volkswagen. Sadly, Barack Obama’s moves here have echoes of both. Neither left much to be desired.
Right now, President Obama is speaking about this live, and television broadcasts here in Detroit is pre-empted for it. So far, I’ve heard nothing new from him. It’s the same old, “We need to make sacrifices. What he means is everyone else “but me” needs to make sacrifices. It’s the same old “I feel your pain” crap that we heard from someone else, eight years ago.
Barack Obama won’t save the auto industry. The marketplace will. And until he gets that–which he never will–look for GM not to survive as it is now, no matter how much money is pumped in.

13 Responses

Don’t forget during the campaign Obum stated that it wasn’t fair and morally bankrupt that Americans could drive SUV’s and eat all the food they wanted while other nations were living in poverty. He stated quite firmly and distinctly, that he would put a stop to this American lifestyle of excess. No more SUV’s and less food.
As you stated above, he now has the power to stop GM from making SUV’s. With the Farm bill that congress is going to pass, it will give the government the power to dictate what farmers are allowed to grow on their land, when they can grow it, and how they grow it. That’s an important measure here in North Dakota, we produce the most wheat out of any of the other plain states along with suger beats, flax seed, and a host of other basic food standards. Now the government can come here and tell these farmers they won’t be allowed to grow wheat this year or in the future. What does that do you ask? It raises the price of food across the board.
This bill also has wording in it that the government can come to your home and tell you as a private citizen what you can and can not grow in your own personal garden. No lie, but the sheeple are not aware of these things going on behind the curtain.

wolf2012 on March 30, 2009 at 12:03 pm

Government has proven time after time that they aren’t capable of running a business. All they do is make matters worse or by regulating the company. Prices subsequently go up. Obama is a huge threat to the American way of living. Our forefathers would be freaking out if they were alive today. I think as each day passes. Americans are waking up to Obama and his plans. And they don’t like it. Why I am predicting that Obama within the next 6-10 months will have a very low approval rating. And that Obama is sinking his ship to get re-elected in 2012. I honestly believe that due to Obama’s actions he will be a one term president. The problems is he can do a lot of damage in the next 4 years. Don’t forget that Roosevelt tried a lot of socialized programs and when Truman was elected…he knocked those programs off the block. We as Americans need to becareful and diligent. We need to voice our concerns and speak out in numbers. To show the current administration that we won’t allow Obama to do these plans and definitely won’t tolerate them either. Going to be a long wait, but we must all hang in there.

Tenn Scholar on March 30, 2009 at 1:16 pm

The father of one of my in-law’s is a retired
GM employee…he’s almost 90 years old. That’s a lot of $$ towards health care. And I bought a GM vehicle two years ago, albeit pre-owned. I’m sure even in this case GM took me to cover their ballooning union expenses.

swq on March 30, 2009 at 1:41 pm

I grew up North of Detroit: I have mixed feelings about this as well. IMO, BO should have no say in who runs a company. I can’t think of one program the government (under any administration) has successfully run and it is certainly not qualified to be dolling out advice on how to run business. In addition, if BO is adamant about removing the CEO, he should remove top union management as well to clear the slate and provide for a new and refocused attempt to “save GM.” Oh and Debbie, $1,500 to $2,000 to pay for the Viagra for a bunch of limp uhummm…..never mind, but I agree! Cheers…

ob3 on March 30, 2009 at 2:11 pm

Barry Soetoro is a tyrant who is bad as Adolf Hitler. This maniac is trying to nationalize private industry and force communism down our throats.
Where does Congress get its authority to do anything it is doing with this economy. They are nothing but thieves masqurading as elected Representatives.
Every single one of the SOB’s that signed the stimulus package should be charged with Treason and violation of the US Constitution. They are in violation of the priciples this country was founded on.
I have zero respect for our new Muslim President and even less for the Congress that is following his lead.
They all need to be thrown out and charged with Treason.

ScottyDog on March 30, 2009 at 2:33 pm

Words cannot describe my concern as each day passes with yet another large flake chipped off the constitution. With TJ and his team of arrogant, ignorant weasels involved at GM and Chrysler, suspect my lifelong love of GM products will have to be transferred to Ford [which I also admire but do not lust].
And, it needs to be said that the comments on the Viagra ads related to unexplained loss of hearing are not a joke. All those naughty old boys indulging themselves could suffer total hearing loss in one or both ears. Doctors don’t know why and have no way to repair the damage. Ask my Dad then look in the mirror. It’s not worth it.

iowavette on March 30, 2009 at 4:08 pm

What country are we living in? This is the land that used to contain the USA–now we have truly become the Amerikans! This ain’t your grandfather’s Oldsmo-country any mo!

BB on March 30, 2009 at 5:38 pm

so is barry going to design the new “peoples car” like hitler, who designed the vw beetle?
barry also wants to extend his control over companies that didn’t take a bailout. So who is next?

ender on March 30, 2009 at 10:06 pm

The problems connected with retirees on pensions isn’t about Viagra. Nobody is going to say much if the pension plans stop paying for Viagra. The pension thing isn’t about cutting costs by not paying for Viagra, what it’s about is the corporations and the government telling that guy’s 90 year old grandfather and the rest of the old people on pensions that they are not going to get a social security check, a pension check or paid health insurance any more and that they can get thier lazy asses out of thier wheel chairs, grab thier oxygen bottles and carry thier lazy asses to work. Walmart’s hiring. And no more plush nursing homes. With all the abandoned homes, factories and warehouses, there is plenty of living space. Plus, the current homeless aren’t taking up ALL the space under our Michigan bridges, dumpsters and apartment building hallways. I’m sure they will share. The old people should have planned ahead for this sixty years ago and saved all thier money. Of course if they had put it in the market instead of stuffing it in thier mattresses, well, how much did your 401K lose in the last six months?
By the way, it’s none of Obama’s business who the head honcho of GM is.

rtaylor174 on March 31, 2009 at 1:20 am

Granted, the power of the unions is unconscionable, as are the massive giveaways to retirees (which probably will not diminish very much, and the taxpayers will foot the bill for them, with the socialists in Washington moving to extend these benefits to the rest of the ‘downtrodden’ and illegal aliens).
However, the fundamental problem is that GM and Chrysler, for the most part, just don’t make very good cars that people want to buy. There are consequences to this, and for the inefficiency of their production process, which, granted, is exascerbated by the unions. No Government gimmicks will change this, and the only way jobs will be saved is by the Government essentially putting most of the employees on de facto welfare.
Obama sees this as an opportunity to advance his socialist agenda. Granted, in principle, when the taxpayers become shareholders, they have a right to make decisions about the company, but as you pointed out, Government-run enterprises have shown in Communist countries, their utter inefficiency and bureaucratic ineptitude and waste. Add to this the still-present lobbying by GM and Chrysler and you have a real mess.
It always winds up that way — Government takes over the most inefficicient companies, and private industry runs the most efficient (e.g. the ‘old’ and ‘new’ GM).
The ultimate danger is the massive redistribution of income away from the rank-and-file taxpayers that is happening across the board, with virtually no protests from Republicans. Any Republican who really made an issue of this, and did more than raise scattered protests of rejecting some small portion of the bailout, would zoom to the 2012 nomination.
Welfare statism has received its biggest boost since the 30s. Along with the 30s and the 60s, the final years of this decade have witnessed a gargantuan leap towards a statist economy and a socialist welfare system.

c f on March 31, 2009 at 11:45 am

The other thing the Government will do when it takes over its car companies is to make it tough for legitimate competitors. It will use PC techniques such as prevention of global warming, diversity, and socialist personnel benefits to harass the competitors of the newly taken over companies, and use protectionism against foreign-made autos.

c f on March 31, 2009 at 12:03 pm

I know that Obama has no experience in the private sector to help him make business decisions, but has he ever even changed a tire?

Hilltopbabe on March 31, 2009 at 2:09 pm

Oh, I forgot the biggest PC gimmick of them all — ‘energy-efficient vehicles’. Just wait; that will be the stepping stone for even more Government intrusion against GM/Chrysler’s competitors, and massive continued interference and handouts to GM/Chrysler.

c f on March 31, 2009 at 4:22 pm

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