Yesterday, Kim blogged about GM's announcement of the immediate resignation of its CEO, Rick Wagoner. Apparently this was at the behest of the Obama White House, as part of a plan to "restructure" the faltering automaker. GM has already taken $9.4 billion in government loans, and now claims it needs $16.9 billion more.
In reporting this story, The Politico observes,
Obama and his aides may have honed in on Wagoner for two reasons. First, his company is asking for the most in total federal aid: $26 billion, a figure administration officials fear could grow even larger. Second, the GM chief was tied more directly to the ill-fated decisions that that brought much of the American auto industry to the brink of collapse. Wagoner joined GM in 1977, has had a senior role in GM management since 1992, and became CEO of the company in 2000. He is considered responsible for increasing GM's focus on trucks and SUVs--at the expense of the hybrids and fuel efficient cars that have become more popular in the last couple of years.
Huh? Americans only bought hybrids and glorified go-carts last year because of the severe spike in fuel prices. When fuel dropped back to 2001 price levels, Americans quit buying hybrids. Right now the Big 3 lose thousands of dollars on every hybrid they produce, while historically trucks and SUV's have been the auto industry's biggest moneymakers. If the Politico's explanation for Rick Wagoner's "failure" as an automotive CEO is meant to foreshadow the Obama Administration's plan to "restructure" GM -- forcing it to produce Smart Car knock-offs and hybrids -- then GM is doomed.
After visibly defenestrating GM CEO RIck Wagoner, and moving to replace the board of directors, won't Obama now 'own' the GM problem? If the company shuts down in the near future, costing tens of thousands of blue collar jobs, it will be under executives implicitly or explicitly chosen by Obama. It will be Obama's failure, not simply GM's failure, no? A public sector failure, not just a business failure.
Maybe they should rename the company "BM" -- "Barack Motors." Come to think of it, "BM" seems to describe the whole situation pretty well.