President Barack Obama asks G.M. CEO Rick Wagoner to resign

Posted onAuthorPatrick1 Comment

Full disclosure: My Father is a Retired G.M. Employee and a member of the United Auto Workers.

I have known about this for a while. I’ve just been waiting for as much info as I could get, before doing a post on it.

Originally Via the Politico:

The Obama administration asked Rick Wagoner, the chairman and CEO of General Motors, to step down and he agreed, a White House official said.

On Monday, President Barack Obama is to unveil his plans for the auto industry, including a response to a request for additional funds by GM and Chrysler. The plan is based on recommendations from the Presidential Task Force on the Auto Industry, headed by the Treasury Department.

The White House confirmed Wagoner was leaving at the government’s behest after The Associated Press reported his immediate departure, without giving a reason.

General Motors issued a vague statement Sunday night that did not officially confirm Wagoner’s departure.

“We are anticipating an announcement soon from the Administration regarding the restructuring of the U.S. auto industry. We continue to work closely with members of the Task Force and it would not be appropriate for us to speculate on the content of any announcement,” the company said.

The surprise announcement about the classically iconic American corporation is perhaps the most vivid sign yet of the tectonic change in the relationship between business and government in this era of subsidies and bailouts.

Reaction from the Conservative Blogsophere has been predictable negative. Also I have observed via the local media, that some auto workers are not happy about the President asking a C.E.O. to resign.

I have an opinion on this. It is simply this. I want to wait and see what happens. I do not want to pass judgment upon this until I see what is going to happen. This could be a bad thing and then again, it could be a very good thing. I shall, like many from this God-Forsaken part of the Country are playing the wait and see game.

Reaction to this from the Editorial board of the The Detroit Free Press is not a good one:

The risk was there from the start.

The federal money flowing to Detroit to help struggling automakers was always going to come with strings.

But there’s a fine line between holding General Motors Corp. and Chrysler LLC accountable for a pile of taxpayer cash and inappropriate government efforts to actually run the companies.

President Barack Obama’s Auto Task Force may have crossed that line over the weekend when it reportedly asked for GM Chairman Rick Wagoner’s resignation as part of a plan to get more aid to the struggling automaker.

It’s hard to see how canning the chief executive is far shy of actually running the company. And if that’s the case, if GM’s federal overseers are stepping up their efforts to actually manage GM through its restructuring, this sets an awful precedent, both on general principle and in this particular instance.

The principle at stake says government shouldn’t manage private businesses. GM has a board of directors that, no matter its many mistakes, is accountable for the company’s fate. The government should ensure the board doesn’t squander taxpayer funds, but that doesn’t include selecting the company’s leadership.

It didn’t for banks, mortgage companies or insurance outfits like AIG. Why should GM be treated differently?

Something tells me that there is going to be a huge blow back from this and it might just cost Obama a reelection, should be try and run in 2012.

Additional Coverage:

Blogs:

One Reply to “President Barack Obama asks G.M. CEO Rick Wagoner to resign”

  1. Pingback: The era of economic Hopenchange has officially begun | Right Voices

Comments are closed.