U.S. Government forces head of GM to resign

[Gone4Good]

Quote:

Originally Posted by samclem so I don't know why those critical of the bailout would necessarily be seen as criticizing our present President (at least on this account).

But one would think that those critical of the bailout would be supportive of recent developments that seem to suggest that bankruptcy is now the most likely outcome. Yet we've heard scant recognition of that from those who claimed to see bankruptcy as the right solution. From this contradiction I can only conclude that some here are genetically incapable from using the words "Obama" and "right" in the same sentence.

For the record, I favored letting the auto's go bankrupt http://www.early-retirement.org/foru...5&postcount=57. I thought that when Bush bailed them out. I think that now that Obama seems to be heading in that direction (more so now that the banks have been stabilized).

So if they file under Obama's watch, can I expect to see samclem start a new thread titled "Obama was Right and Bush was Wong"?

[samclem]

Quote:

Originally Posted by . . . Yrs to Go So if they file under Obama's watch, can I expect to see samclem start a new thread titled "Obama was Right and Bush was Wong"?

No, my thread will be entitled "Once Proud American Industrial Giant Forced into Bankruptcy Less Than One Year into Obama's Reign.
Subheadline: New CEO Pelosi Hails Great Day for the One Remaining US GM Worker, Claims Additional Bailout Money and Protection From Foreign Competition Needed "

Was Obama "wrong", too for wanting Bush to bail out the auto makers?

Is "right" and "wrong" and keeping score what this is about? There are a lot of folks with very thin skin when it comes to criticism of the policy of the executive branch.

By the way, I want very much for President Obama's term in office to be successful. In fact, I want him to be the best President we ever had. I think this is most likely to occur if he changes most of the policy prescriptions on which his campaign was based. Fortunately, he's demonstrated a certain "pragmatic flexibility" that may stand him in good stead, especially if his present policies cause a disturbance among the electorate.

[ERD50]

Quote:

Originally Posted by TromboneAl Wagoner has said the biggest mistake he ever made as chief executive was killing the EV1, GM's revolutionary electric car... I wonder if things would be any different now had they hadn't done that.

If I'm reading that right, the mistake was the PR disaster that he created, not an economic or design or marketing mistake.

I fail to see how it would have helped them to try to sell electric cars outside of the CARB mandate. And if it would have, why didn't any other innovative company like Honda, Toyota, or Daimler jump into this market if it was so great?

Seems like all it would have done is sunk them faster. And unless gas goes above $4, or batteries get much cheaper in the next few years, I don't think the Volt will do much for them either.

-ERD50

[youbet]

Quote:

Originally Posted by samclem Is "right" and "wrong" and keeping score what this is about?

Not sure if you meant that as a rhetorical question or not..... But, obviously, yes that is what this is about.

[samclem]

An update in the ongoing saga!

From the WSJ:

Quote:

Steven Rattner, the leader of the Obama administration's auto task force, was one of the investment-firm executives involved with payments now under scrutiny in a state and federal investigation into an alleged kickback scheme at New York state's pension fund, according to a person familiar with the matter. A "senior executive" of Mr. Rattner's firm, Quadrangle Group, met with a politically connected consultant about a finder's fee, then the firm agreed to pay what became a $1.1 million fee after receiving an investment from the state pension fund, according to a Securities and Exchange Commission complaint against two former New York political officials and others. The person identified in the complaint as a "senior executive" is Mr. Rattner, who co-founded Quadrangle, according to the person familiar with the matter

Don't you just know that former GM CEO Rick Wagoner is all broken up about this. He's probably already sent poor Mr Rattner some flowers.

[USK Coastie]

Rattner is working for less than $500k/yr right? That is the new max compensation allowed by BHO for any CEO who's firm has received a federal bailout.

[freebird5825]

Oh, this is gonna be a real paper-seller...go get 'em, Mr. Cuomo
ATTORNEY GENERAL CUOMO ANNOUNCES SWEEPING INDICTMENT IN PAY-TO-PLAY KICKBACK SCHEME AT THE NEW YORK STATE COMPTROLLER’S OFFICE

He's been a very busy boy lately
http://www.oag.state.ny.us/media_cen...ia_center.html
A lot of the Wall St mess will be prosecuted via coordination between the offices of the NY AG and SEC NY Regional Office.

SEC press releases can be found here.
http://www.sec.gov/news/press.shtml
Just for fun, look at the headlines across years. Interesting contrast...

Stay tuned...

[samclem]

And in a related note: According to a letter from Chrysler CEO Nardelli, if FIAT goes through with the deal with Chrysler, then a new Chrysler CEO and board of directors will be appointed. Fiat will appoint some of them and the US Government will appoint some of them.

That's a hoot. It used to be that Italian companies were the ones with CEOs and boards appointed by the government. Now the US government is following the Italian model. That's a formula for success--not.

[Zathras]

Well, to be fair, the rubber stamp boards that many companies have, have led to rather disasterous results.
Now, I don't know that the quality of the board will be any better, but the current ones haven't done well.

[HFWR]

Quote:

Originally Posted by samclem An update in the ongoing saga! From the WSJ: Don't you just know that former GM CEO Rick Wagoner is all broken up about this. He's probably already sent poor Mr Rattner some flowers.

Is anyone surprised that a powerful executive, politician, etc. has skeletons in his/her closet?

Quote:

Originally Posted by Zathras Well, to be fair, the rubber stamp boards that many companies have, have led to rather disasterous results. Now, I don't know that the quality of the board will be any better, but the current ones haven't done well.

My thoughts as well, which shouldn't be construed as being supportive of gummint intervention...

[ERD50]

Quote:

Originally Posted by Zathras Well, to be fair, the rubber stamp boards that many companies have, have led to rather disasterous results. Now, I don't know that the quality of the board will be any better, but the current ones haven't done well.

Those same CEO/BOD made money building and selling cars in the rest of the world.

Same board, same CEO. So what's the difference? (rhetorical question/answer - UAW and the US Govt).


-ERD50

[Zathras]

Actually ERD that is a great question. Just what is the control/management structure for GM overseas?
Obviously the market is different, and I am guessing the unions are different (but still present??). The regulations are different in some/most areas?

[armor99]

In order for just about any company to make money, they must be free to make their own decisions about what to do in their business. Why did the foreign imports do so much better than american cars for years? Because they built a product that more people wanted to buy. Had detroit changed direction years ago, they might have been more competitive.

The govt solution seems to be the idea that they should be able to control what it is that businesses produce. There are to be govt mandates of what sort of car they are "allowed" to manufacture. So the idea is.... they only sell X types of cars, and the govt controls that all the cars are "good for us". Meaning more fuel efficient, smaller, etc. Obviously if they are only making certain cars, most have to drive, and we can pick from those.

For me... this has shades of the famous "Taco Bell" of the future in the movie Demolition Man. Where ONLY healthy foods can be served due to govt regulation. Do you really want to live in a world where only govt sanctioned choices are available? What if my personal persuit of happiness means a Saturated Fat Big Mac now and again? What if my passion is cars and I am successfull enough to purchase one that has high performance but gets 10 mpg? I think it is very important to remember that everyone in America has rights. Not just the majority of people. I am not responsible for poor decisions that others make, and I will resist for as long as I can being forced to become my "brothers keeper". The idea of anyone else.. govt or otherwise becomming my "keeper" I find abhorant in the extreme...

[Zathras]

Quote:

The govt solution seems to be the idea that they should be able to control what it is that businesses produces.

I disagree. I have not seen the government tie any of the bailout money to what cars can be built.
Completely seperate from the bailout, the government does have standards for safety and pollution that vehicles must meet, but not tied to the bail-out money.
What the government HAS said is that the companies must show a plan to viability. I believe that is to be expected since GM and Chrysler went to the government asking for money.
No one is telling the companies that they have to stop building Cameros.
As for Taco Bell's menu, I am sorry that you find fictional movies so terrifying

[samclem]

Quote:

Originally Posted by Zathras I disagree. I have not seen the government tie any of the bailout money to what cars can be built.

They have repeatedly said this is an objective, and will continue to do so.
Emphasis added:

WSJ:

Quote:

To forestall a voter backlash, Obama aides and Ms. Pelosi separately made clear they intend to impose significant conditions on federal aid. Auto makers would have to offer the government equity stakes or warrants, one Obama adviser said, and would have to accept the same rules on executive compensation that financial-service companies have swallowed with the Wall Street rescue. Auto makers receiving aid would also have to agree to strict rules aimed at building "green and clean" automobiles, one Obama adviser said.

[armor99]

Quote:

Originally Posted by Zathras I disagree. I have not seen the government tie any of the bailout money to what cars can be built. Completely seperate from the bailout, the government does have standards for safety and pollution that vehicles must meet, but not tied to the bail-out money. What the government HAS said is that the companies must show a plan to viability. I believe that is to be expected since GM and Chrysler went to the government asking for money. No one is telling the companies that they have to stop building Cameros. As for Taco Bell's menu, I am sorry that you find fictional movies so terrifying

In the games of chess, poker, and even engineering to a certain extent, are all about seeing 3-4 moves ahead, and not just the choice we are currently confronted with.

I am looking 3-4 moves right now, and I do not like the direction this is going. My king is running out of moves, and the govt has it's castles, knights, and pawns all bearing down on me. To make my chess analogy even stronger, when the govt controls the board, and the laws of the game on which it is played, what chance do I have?

People need to be reminded of who exactly is working for whom? I have a copy of the declaration of indepandance and the constitution, and I see no mention of a govt's right to take over any private business at any time. The rallying cry of "In the publics best interest", does not hold any water for me.

Seeing ahead that 3-4 moves again, the govt can inoke that again at any time of their choosing, and that does bother me. So you are right... there is no such govt mandate that "they have to stop building Cameros". But the rules and laws have been stacked in such a way, as to make it impossible even if they wanted to.

[Zathras]

Quote:

Originally Posted by samclems quote of WSJ Auto makers receiving aid would also have to agree to strict rules aimed at building "green and clean" automobiles, one Obama adviser said.

Did the advisor also say they were going to prevent the auto makers from building any other cars?
I don't mind the government telling the auto companies that they need to build a vehicle that leads the world in technology, or greenness, or whatever. What I find abhorent is the the company NEEDED to be told this in the first place.

Quote:

Originally Posted by armor99 Seeing ahead that 3-4 moves again, the govt can inoke that again at any time of their choosing, and that does bother me. So you are right... there is no such govt mandate that "they have to stop building Cameros". But the rules and laws have been stacked in such a way, as to make it impossible even if they wanted to.

There is a difference between your imaginations of what their end goal is and what they are actually doing.
Sure, it is possible they are one in the same, but I don't see it as likely.
Saturn, one of GM's most fuel efficient lines is being sold/scrapped and the government is not saying anything about that being a bad idea. Hummer is also going away.
GM lost it's image as a leader and focused too much on big vehicles. They couldn't make money on small vehicles, not because of government regulation, but because of their own bowing into demands of the UAW.
If you ask me, the government has no place bailing out the auto companies and should just keep it's nose out of it.
But since the auto companies came ASKING for the government to step in, I don't think they have any right to complain with the reasonable steps the government is taking to protect taxpayers investments.

[samclem]

Quote:

Originally Posted by Zathras They couldn't make money on small vehicles, not because of government regulation, but because of their own bowing into demands of the UAW.

Not exactly. They couldn't make money on small vehicles in large part because of government regulations put in place by the government to appease the UAW.

"The Two Fleet Rule" (Pew)
"GM Bankruptcy? Tell Me Another"

And, their small cars were crappy--but possibly at least in part because the only way they could come close to the price of the imports (given the mandate to use higher-cost union labor--see above) was to cut the cost and quality of everything else that went into the cars.

There's plenty of blame to go around. But government played a huge part in scuttling the big three, and to think government intervention (especially dictating what they should build irrespective of consumer desires) will improve their situation seems to go against the evidence.

[Zathras]

Quote:

Originally Posted by samclem Not exactly. They couldn't make money on small vehicles in large part because of government regulations put in place by the government to appease the UAW. "The Two Fleet Rule" (Pew) "GM Bankruptcy? Tell Me Another"

Interesting, but the first link discusses the two fleet rule and states at one point...

Quote:

The United Auto Workers (UAW) and domestic automakers, on the other hand, claim that dropping the two-fleet rule would cost U.S. jobs.

Later it mentions:

Quote:

On June 21, 2007, the U.S. Senate passed a comprehensive energy bill by a vote of 65-27.

Which included eliminating the two fleet rule, exactly what the UAW didn't want.

Listen, I agree that the government should not have stepped in here. But they did at the request of the companies.

And as part of the bailout, there is again, no requirements that they build or don't build any particular type of vehicle.
If you want to argue OTHER regulations make these demands, that is fine. There are a number of rugulations which are questionable. But none tied the bailout that I have seen, nor exclusive to GM and Chrysler.

[samclem]

Quote:

Originally Posted by Zathras Which included eliminating the two fllet rule, exactly what the UAW didn't want.

Sorry, but not quite right. The two fleet rule was inserted back into the legislation before final passage (apparently after the Pew article was written). Among those who crafted this re-insertion of the onerous provision were Rep John Dingle and a Senator named Barrack Obama. This was done at the behest of the UAW. They got what they wanted then and will continue to get what they want under this administration--too much is owed to them.

The two fleet rule was eliminated for trucks in 1996. Guess what--US auto makers compete well against foreign makes in the truck market.

But, I think fundamentally we agree--government shouldn't be in the car biz, and the sooner they get out the better for US industry and taxpayers.