Government Motors and the Obama Power Grab

Rick Wagoner was axed last week as the CEO of General Motors by our new auto-warranties-guarantor-in-chief. Here is Obama's direct quote from the press conference: "If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warranty will be safe. In fact, it will be safer than it's ever been. Because starting today, the United States government will stand behind your warranty."

Why this troubling intervention, you ask? Well, the administration apparently didn't like GM's latest restructuring plan, so Wagoner got the boot as the sacrificial lamb. The clock is now ticking on GM (60 days) and Chrysler (30 days) to get things turned around or they may be looking at a Ch. 11 bankruptcy. To me, this power grab smacks more of mob extortion than of proper governmental action, even in these turbulent times.

So now, the life support cord for these two auto giants is in the President's hands. And because these companies have already eaten from the taxpayer bailout trough and are hungry for more, the man who has less than 3 months of any meaningful executive experience gets to now dictate how these companies are run and how much their execs get paid. This also means that government bureaucrats, NOT free market forces, will be telling GM and Chrysler to supply the kinds of cars they can only hope consumers will demand. Oh boy.

These are the strings - no, the chains - that come attached with bailout money. Businesses beware! Is it any wonder that Ford (wisely) wants to avoid bailout cash like the plague? Are you surprised that the banks who have already received funds are dying to pay them back? These companies learned the hard way that when you get in bed with the government, you'll never have a good night's sleep. Do you guys feel comfortable with this development? Why or why not? Here are 3 more questions to ponder:

1.) Why didn't the under-performing union boss at UAW lose his cushy job along with Wagoner? If Obama is going to be the HR-director-in-chief, then why not axe both sides of the bargaining table to be fair and consistent?

2.) If you were a rising, talented executive with a promising future, would you be less likely or more likely to go work for a company where politicians can fire you?

3.) Do you honestly believe Obama will let these companies fail now, after investing so much in them and stamping his presidential promise on every car's warranty? I have my doubts. His image would take too big a hit, unemployment would balloon, and the populist outrage would explode - i.e. you bail out the bankers on Wall St. but not us blue collar auto workers on Main St.? The question then becomes: When and where does the bailout slippery slope end?