John on March 29, 2009 at 5:59 pm
The car industry is in trouble and has turned to the government for help. The government has the right to set the terms of that help, including asking for the CEO to step down. I accept that, but this move still feels icky to me and here’s why…
This Politico story suggests a couple of reasons why GM’s CEO is getting canned (and Chrysler’s is apparently not):
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 SUVsâ€”at the expense of the hybrids and fuel efficient cars that have become more popular in the last couple of years.
If this is indeed any part of the motivation for firing Rick Wagoner, then I have a real problem with it. It’s one thing for the government to make a simple success vs. failure decision. President Bush essentially fired the CEO of AIG last year when that company received bailout money, but I don’t recall anyone indicating that it was anything other than a simple judgment on his failure to keep the company afloat. When a company is in dire straights, it’s normal for heads to roll.
It’s something else when the President fires the head of one of America’s flagship companies because he’s not toeing a particular liberal line. Somebody with access to the President should be asking him to clarify on this point.
Category: Energy & Economy |