'Now we know who's running GM'

by Frank James

The Detroit News editorial board swings conservative, so it's not surprising that it finds a lot not to like about President Barack Obama's firing of GM CEO Rick Wagoner.

Its take is worth reading regardless of political ideology, however. The way the DN describes General Motors, it sounds something like Fannie Mae, a government sponsored entity with a government overseer. The DN also views Wagoner as playing the undeserved role of Obama's fall guy.

An excerpt:

Well, at least now we know who's running General Motors. The Obama White House, in an extraordinary expansion of the government's reach, Sunday demanded and got the head of Rick Wagoner, the automaker's embattled chief executive. In doing so, the president brushed aside GM's board of directors, selected by shareholders and entrusted with the power to hire and fire executives, and assumed that role for himself.

While GM's board had been often restless with the transformation of GM under Wagoner's leadership, it maintained its confidence in his ability to get done a very tough job.

Shareholders can read the handwriting on the wall -- this isn't their company anymore.

That's the risk you take when you go hat in hand to Washington. It ought to be a red flag for other companies and industries that might be thinking a federal bailout is the answer for surviving the recession

Shareholders are definitely not feeling good about what the Obama Administration action means for them; a federally controlled bankruptcy would wipe them out. GM's share price was down more than 20 percent last I checked, leading the auto sector which was broadly selling off.

As the DN suggests, firing Wagoner was the easy part. Another excerpt:

The trick now is to find someone to run the automaker. Good luck with the headhunting.

How many top-notch corporate executives will jump at the chance to lead a company that is sinking like a rock? Who will be willing to share the corporate suite with federal bureaucrats? And by the way, the job pays a buck a year, and if you need to fly, it better be coach.

Running a tobacco company has to have more appeal.

Wagoner wasn't perfect. He was too slow in beginning the makeover of General Motors -- though for the record, he got it underway well before the industry needed a federal rescue.

He wasn't aggressive enough about cost cutting, perhaps, and was reluctant to declare the death match with the United Auto Workers union that some in Congress demand.

But he knew about building cars and trucks, and had put a plan in place to do so profitably once again...

Now it falls to the Obama Administration to dictate GM's future at the same time it's trying to clean up bank balance sheets to reboot the credit business and fight the war in rethink the war in Afghanistan. Talk about multitasking.

Some of us are losing track of all the things we thought we'd never live to see which we lived to see. The federal government essentially operating GM is just the latest.