Pretend for a moment we’re back in the early-1980s. Unemployment is high, the economy is suffering, and the auto industry needs help. Now, let’s transport the new Obama administration back in time to deal with the issue.
Instead of cutting taxes like Reagan did in 1981, Obama decides to raise taxes. Fine – that’s how many Democrats deal with deficits – I get that. But it gets even more interesting. Instead allowing auto companies to buy out struggling competitors (like Chrysler bought AMCin the early-80s), Obama lends a failing General Motors $16 billion to stay in business, with more on the way. Not content with GM’s unfettered windfall, Obama then confiscates a seat on General Motors’ board.
Had this happened during the Cold War, cries of government seizure would have stopped this bold move by the Executive branch. The New York Times, CBS, and the rest of the media complex would have denounced the seizure as authoritarian and Communist. Congress may have started impeachment hearings. Bottom line, an 80’s-version of an Obama-GM socialization would not have succeeded. But we’re not living in the 1980s. And that’s why they’ll get away with it.
Obama has now virtually-assumed ownership of the nation’s largest auto manufacturer. To brandish his new-found acquisition, President Barack Obama firedGM’s CEO, Rick Wagoner (watch how the official report will be a resignation). From what I can tell, Wagoner is the first-ever CEO ousted from a non-financial, publically-traded company by a sitting US president.
Now virtual-chairman of GM Obama is leaning towards current-Chief Operating Officer Fritz Henderson to replace Wagoner as the new CEO. Commenting on the ouster, John Cassea from New York-consulting firm Cassea Shapiro group said: “Fritz is the obvious choice…he knows where all the bodies are buried.” It’s sounding more like a Godfather movie than a political story every day.
The official Administration stance on the auto industry is set to be announced today. Obama’s Auto task force will unveil plans for GM and other companies dependent on Federal aid. It seems the fate of the nation’s largest auto company from the world’s 2nd largest auto manufacturing economy (Japan is first) is now in the hands of the US government.
No doubt, the acquisition will be spun in the most positive and benign light possible. But watch their lips. Whether the White House speaks of conservatorship or temporary management, facts are facts. Obama is calling the shots for GM now.
This ain’t your Daddy’s USA anymore.