March 30, 2009

The Government Takes Over GM, Complete With a Five-Year Plan

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 4:30 pm

(Somewhat whitewashed background of “five-year plans” is here for those who don’t know the history.)

From Marc Ambinder at the Atlantic, who hasn’t grasped that 2014 minus 2009 equals five:

Legacy costs remain unresolved; the government estimates that GM would need to sell 900,000 more cars per year through 2014 in order to meet its obligation.

Elsewhere, the administration has called on GM to fundamentally change its culture. Better brains need to be brought in. Labor/management practices have to change.

All of this is fine. The government is telling GM to be like Toyota. But what if the industry’s infection is just too widespread? No amount of patient self-care… “clean those wounds better!  Eat your vitamins! Get exercise!” and no amount of antibiotics (the billions government’s pouring in) can arrest the death spiral. Was it totally unrealistic to expect GM to find a way to satisfy the government’s demand for positive cash flow by 2014?

Supporting the validity of the historical comparison: “Obama didn’t ask Congress about ousting Wagoner” –

Obama told the members of Congress that Wagoner needed to resign so that the administration could show the public it was making an effort at a fresh start with helping the auto industry, according to Levin.

That’s a totally substance-free reason — in effect, a purge for the sake of a purge.

But really, why go through the trouble and inconvience of consulting with the Politburo (and, it would appear, GM’s Board of Directors) when Dear Leader can just exercise the power preemptively, and unilaterally?

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2 Comments

  1. “Elsewhere, the administration has called on GM to fundamentally change its culture. Better brains need to be brought in. Labor/management practices have to change.”

    Oh, man, now that is funny! The inept Obama administration lecturing others on needing better brains, practices and changing its culture! Obama needs to do that to his own house before criticizing others. Obama and his cronies need to look in the mirror, all those criticisms could apply directly to themselves!

    Comment by z — March 30, 2009 @ 11:31 pm

  2. #1, you’re right, it is indescribably pathetic.

    Comment by TBlumer — March 30, 2009 @ 11:40 pm

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