Keith Crain, publisher and editorial director of our sister newspaper Automotive News, wrote a very strong column in last week's issue about the U.S. government takeover of General Motors Corp.
Crain starts by saying he is surprised and disappointed that corporate America has been painfully silent as the government usurps more and more authority at General Motors.
He notes the White House and Treasury Department fired CEO Rick Wagoner and appointed an interim CEO and an interim chairman. The government decided that the United Auto Workers will have a large block of GM stock, and it dictated terms of the payment to bondholders.
All this from folks who have never run a manufacturing company, Crain wrote. They are mostly politicians and regulators with a smattering of Wall Street financial types. This scenario should never have happened. There has hardly been a peep from anyone that perhaps this is a formula for disaster.
The White House types might argue that they can't do a lot worse with GM than the previous management, including Wagoner. But the fact is, they can do worse and they probably will.
What part of the car business will thrive under Washington's tutelage manufacturing? Product development and design? Marketing? I don't think so.
As Crain argues, it is ridiculous for the government to dictate GM's business plan: If the White House is going to decide on future models for GM, we probably can write off the rest of GM now. There is a huge chasm between what the government would dictate GM should manufacture and what the public would like to buy.
Why hasn't there been more of an outcry against the White House takeover of Government Motors?