General Motors: A Failure Of Leadership All Around
Wall Street took a big dump yesterday after three weeks of gains and the culprit, depending upon whose ax you’re helping grind, is General Motors or the White House.
“If the government would stop doing the private sector’s work, I think we might be a little better off,” whined one analyst who took unkindly to the tough love President Obama dished out to GM and Chrysler, as well, “But at this point it might be too late.”
The analyst has it exactly backwards.
If GM had showed more interest in producing a viable recovery plan than chugalugging billions of dollars in taxpayer dough this day of reckoning would not have arrived — or at least not with such a bang.
Where the analyst might have something is the “too late” thing.
Having proved itself not too big to fail, GM is now probably looking at bankruptcy, but methinks Obama is hedging that bet — and putting the lie to the notion that he wants the government to run the automaker — by putting its hands to the fire now to reduce the chances that it will be forced to take over later.
Obama and his advisers certainly understand that the government’s record when it comes to nationalization is mixed. (Its efforts to run railroads have been notable failures.) And that they must be able to better explain why the ouster of GM CEO Rick Wagoner and his board was a pre-condition for more government bailout money but the managers of failing banks and other financial institutions that have received many times more money than automakers have been virtually unscathed.
Wagoner had begun to turn GM around with some decent new products after 15 years years of lousy “leadership” while the automotive world was stealing a march on him, but these products are far too little, far too lacking in innovation and far too late, while Wagoner himself continued to be accountability averse and his board tone deaf regarding the hash he had made of things.
Meanwhile, the recovery plan that Wagoner fashioned was laughably inadequate.
He believed that GM could remain far larger than was realistic in today’s hyper competitive global market. His recovery plan did not cut deeply enough and assumed the best at every turn, including hanging on to its already diminished market share and even growing while projecting losses for years to come.
What we have here is a failure of leadership all around starting with Wagoner and his board of directors to the enablers in Congress led by a Michigan delegation that looked the other way for years, to the Bush administration and congressional Democrats, who proved to be better at panicking and throwing our money at the mess than than getting tough.
President Obama gets a pass, but only for the time being.
Shaun Mullen is a former The Moderate Voice columnist. Over a long career with newspapers, this award-winning editor and reporter covered the Vietnam War, O.J. Simpson trials, Clinton impeachment circus and coming of Osama bin Laden, among many other big stories. He blogs at Kiko’s House.
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4 Responses to “General Motors: A Failure Of Leadership All Around”
There are some things that are fundamentally wrong with GM. The world is in a massive recession. People are not buying cars. But the biggest problem with GM is what the GOP has warned everyone about for the last 2 years. We need more oil because we damn sure arent going to start producing battery cars tomorrow at GM that are worth a dayum unless we want to bankrupt the RV industry, the boating industry, the snowmobile industry, the trailer industry, those who need cattle and horse trailers. Parts industry and on and on and on it goes.
And the second biggest problem with GM is the Union. Not that Unions are bad but that in GM's case they have promised to pay every person who ever works for GM for the rest of their lives and the rest of their kids lives. Its ludicrous. They have so much debt right now because of this communist style workers manifesto called a collective bargaining agreement that the only real solution for GM is bankruptcy.
Im so tired of hearing the left screaming that GM and Ford and Chrysler are the worst run companies ever because they are failing in a big way when gasoline suddenly doubles in a few months. These companies have a whole stable of cars that get 30 mpg. They have to. Its the law. If they are so bad the company should fail. Its how capitalism works. Why is the government bailing them out?
Last year the number one and number two best selling vehicle in America was the SUV and the pickup truck. The big three made lots of trucks and suvs because Thats what Americans were buying. IF……….GM is such a bad company….let them go belly up. If GM bites the dust then the rest of the industry will be much stronger for it because the industry will no longer have the largest or perhaps second largest competitor in the world to deal with and they will all sell more cars.
As for the military style life benefits package the company offered to all its employees they will just have to either bite the bullet or the government can assume this risk and continue to make good on those retired and those fixing to retire. That 20 year old kid whose been working their for 2 years is out of luck.
Unless we want to go the way of communism and let the government run everything its very important that people be in control of their own retirement funds……NOT SOCIAL SECURITY……..these could be put in safe, well managed and heavily overseen funds that are then pulled out 5 years before the person is to retire and the money is sold to the US government and in return we receive government bonds. Thus Americans are buying their own countries debt and once again the debt that we owe is debt that we owe ourselves.
I have always advocated that every person to ever work pays 2 percent of his weekly salary into a fund that is then matched by the employer. This money is invested into government bonds that pay a standard percentage rate and this is the debt that the USA is allowed to use. No more selling our debt to foreign investors or overseas nations.
This happens your entire working life. It starts with your first job at age 16 and ends when you retire.
With the additional funds that are freed up by not having to pay repressive health benefits for the employed the companies are then free to expand their work force. A 5 percent tax is then placed on both Corporations and companies and individuals who then use this money to obtain insurance that has no limits, no deductible and no pre existing conditions. This insurance then travels with you your entire life. It is overseen by a private firm, paid for by both the individuals, companies, corporations and the government and it keeps our existing medical infrastructure in place all the while putting in place oversight that keeps the fraud and waste to a minimum.
Those who refuse to work or cannot work are then covered under Medicare. Medicare part a, b and d. Under all these plans there are copays such as 5 bucks for medicines and 5 bucks for doctors visits etc. To help offset the costs.
I could go on and on but the point of all this is to insure that our current medical establishment which is very good and innovative continues to produce the best doctors and nurses while at the same time guaranteeing that Americans ALL have coverage and that the cost of said coverage is spread equally out by the individual, the employeer and the government in the form of taxes and payroll deductions.
Ultimately the individual pays 7 percent of his income for health care and retirement. The corporations pay the same 7 percent and the government pays the same 7 percent. Effectively paying 21 percent of your income for these two items. A fair scheme that keeps in place capitalism and yet puts America on track for economic expansion by unpenalizing business so that they can hire MORE employees and our economy can expand.
I believe that it's called Social Security…
What a left wing nut house this place is. This is where you come to hear the communist manifesto preached to us.
So be it………buh bye………I think Ill go hang out with people who have a brain instead of a smart ass reply to every proposal ever made.