Obama Now Owns GM? Not Quite—and Not Quite a Bad Thing
By Robert Schlesinger, Thomas Jefferson Street blog
A number of bloggers have suggested that now Obama "owns" the auto industry—if it fails, blame will now accrue to him. This is neither necessarily true nor necessarily a bad thing.
Mickey Kaus was, I think, the first (emphasis his):
After visibly defenstrating [sic] G.M. CEO Rick Wagoner, and moving to replace the board of directors, won't Obama now "own" the G.M. problem? If the company shuts down in the near future, costing tens of thousands of blue collar jobs, it will be under executives implicitly or explicitly chosen by Obama. It will be Obama's failure, not simply G.M.'s failure, no? A public sector failure, not just a business failure. Doesn't that make it harder, not easier, for the administration to walk away and force the company into bankruptcy (if, for example, the company's plans for "viability" continue to fall short after the new 60-day deadline)?
The ownership question is debatable: GM left to its own devices would certainly fail. I don't think anyone debates that. So Obama cannot fairly be blamed for GM going under—it's not like the auto industry was chugging along nicely and that awful Obama suddenly stuck government into it just for kicks (though given some of the breathless commentary on the right, you might think that that's exactly what happened).
That said, if GM goes down, he would be left holding the bag on having wasted huge amounts of public money on a hopeless (and unpopular) cause. He'd own that for sure. But that's not a reason not to do it. If GM goes down, Obama can say he tried and people can judge whether it was worth the effort and whether his effort was well-conceived—that's responsibility, and it's better than letting GM fail for fear that if you tried to do something you may not succeed.
On Facebook? You can keep up with Thomas Jefferson Street blog postings through Facebook's Networked Blogs.
- Read more by Robert Schlesinger.
- Read more from the Thomas Jefferson Street blog.
- Read more about the Obama administration.
Tags: General Motors | Barack Obama | government intervention | Obama administration
Tools: 
Share
|
| Comments (12) | Print
Reader Comments
No Good
There are a couple problems with this. The first is the fact that if GM does go under I dont believe Obama will own up to it, I'm sure he will just pass the blame to one of his many hench men. Second and more important by GM would have fail anyway, true. However with the government taking control it will be sure to fail as well. The government has never produced a profit off of any business they tried to intereven with etc. postal, transportation by train, transportation by boat,... soon automotive.
MBA Textbook Failures
Well now wait a minute, Linda. Careful about knocking the good ol' South, especially since your state is a good textbook study of political corruption :P
GM as a textbook management failure - absolutely. But don't forget the other two-letter acronym, GE. Jeff Immelt is the poster boy of corporate mismangement and international law-breaking by selling high technology to terrorist countries. Both of these American icons deserve to fail, and we should let them. Others will take their place, and the leader will be an American company, because failure begets ingenuity; and that one resource we have in ample supply.
Detroit should worry....
Detroit should be very worried about bankruptcy. A new buyer probably Indian or Chinese could come calling and since they are countries which despise unionized labor, will relocate their dilapidated and outdated plants to Southern states. They can park their shiny new plants across the street from Toyota, Honda, BMW, Mercedes and look their competition right in the eye. Southern states will give away the land for free and provide a 10 year exemption on business taxes following Alabama's example to increase their chance of landing good paying jobs. Think this won't happen? Don't kid yourself. Tata Motors of India has been on a buying spree the past few years - LandRover, Aston-Martin, Jaguar, etc. But GM deserves it - too many years of disastrous business decisions and mismanagement. I'm in my second year of MBA school and we are studying GM as a textbook example of failed management.
advertisement
