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March 30, 2009

So, Obama has decided that one of the sacrifices “we” will have to make is asking GM CEO Rick Wagoner to step down and to be replaced by the current COO. “It’s only fair”, you say, “after all it is government money that is keeping GM running, so government should be allowed to call the shots.” Ah oui, but where does all this lead to? What makes you think that the Obama administration – which suffers from a scarcity of people with business experience – is in a better position to turn GM into a viable company than are those who are currently running it or, for that matter, anyone else?

But the French Cowboy will argue that it isn’t even government’s goal to put GM on its own two feet. If they wanted to do so, then they would not have destroyed all confidence the private sector could have had in Washington as an ‘honest broker’ through the embarrassing hysterics of the last weeks. Even if the Obama administration were packed with people who have substantial experience from the private sector, their working for the White House means that ultimately they have a political agenda. All those ‘bailout’ companies from AIG to GM are depending with their zombie lives on Congress and the White House. Who would be so naive as to think that Barack ‘Statism’ Obama would let such an opportunity go to waste and not take complete control over them? This is not about making GM competitive again. It is about Washington imposing their agenda on a formerly private institution. The Washington Times notes:

The White House’s auto task force aimed sharp criticisms at Mr. Wagoner’s handling of GM matters, including the company’s reliance on heavy trucks and sports utility vehicles to make a profit and the lack of attractive fuel-efficient models in its lineup.

The White House said Mr. Wagoner’s plan to try to leapfrog Japanese and Korean competitors offering popular gas-electric hybrids with its all-electric Volt model, while promising, is unlikely to succeed any time soon, and the company faces deep losses for years to come without more drastic changes.

Got that? GM is in trouble not because it paid above-market wages to its workers, for instance, or because of its pension programmes the size of which dwarf the productive, car-related section of the company. No, all this has nothing to do with it. The problem is that, instead of going with the moral imperative of the Church of Green and sell subsidised, wind-powered 2.5-seaters to subsidised Californian buyers, GM has produced gas-guzzling trucks and SUV’s that Americans actually like. And, on top of that, Wagoner has had that idea about leapfrogging Asian car models which, fortunately, thanks to their superior, Ivy League understanding of the car market, Obama’s team has immediately identified as the pipe-dream business strategy that it is.

So good thing that Monsieur Wagoner is gone and that Obama’s pseudo-Brain Trust will take matters into their hands. They may have no relevant experience for the task, they may lack the understanding of the market, they may be a bunch of bureaucrats interested only in executing power without holding responsibilities or ambitious and driven by a political agenda, but they sure have a vision for GM, and for all the other companies currently at their mercy, that will turn the fat cats’ businesses into institutions that further the best interest of society!

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