"We think we can have a successful U.S. auto industry," President Obama said on CBS's "Face the Nation" on Sunday. "But it's got to be one that's realistically designed to weather this storm and to emerge… much more lean, mean and competitive than it currently is."
Barack Obama, the man who never held an executive position, has now decided that he has the right and the know-how to redesign the U.S. auto industry.
He has decided to seize General Motors. Obama has usurped the power of GM's stockholders.
I fear this incredible intervention of government into America's private sector won't be an isolated case. It's a harbinger.
From the Washington Post:
The Obama administration has forced the longtime head of General Motors to resign and said yesterday that it would withhold additional federal aid to the auto industry unless the ailing companies undertake changes they so far have been unwilling or unable to make.
The administration effectively rejected as untenable the business plans that GM and Chrysler had submitted to restructure their companies, saying that neither had fulfilled the terms of the federal loans the companies received in December.
The president is expected to announce today that both companies may still win additional federal aid but under stricter terms.
Chrysler, which the administration believes cannot survive as a stand-alone company, must reach an agreement to partner with the Italian automaker, Fiat, in the next 30 days to become eligible for as much as $6 billion in additional federal loans.
GM, which has shed thousands of workers since the downturn began, must devise a leaner business plan that likely will cut the company workforce and product lines even more than officials had contemplated. It has 60 days to come up with a new approach.
Moreover, GM must move forward without its chairman and chief executive G. Richard Wagoner Jr., who met with administration officials on Friday and has agreed to step down.
The White House's insistence that Wagoner step down is an extraordinary intervention of the federal government into the management of a private company. A senior administration official said Wagoner's resignation was required because the company needs a "clean sheet."
What gives this senior administration official the right to determine that GM should dump Wagoner?
That's not a decision for Obama and his administration to make.
Obama is acting like a dictator, and not a benevolent one.
From the Wall Street Journal:
In addition to pushing out Mr. Wagoner, the administration's auto task force said GM is in the process of replacing the majority of its directors. Kent Kresa, a longtime director, will serve as interim chairman. Mr. Wagoner will be replaced as CEO by Chief Operating Officer Frederick "Fritz" Henderson.
Wagoner isn't the only one being forced out of his job by the government. The majority of GM's directors are being forced to hit the road.
There's no limit to what the government will do. It has seized GM.
...To assure consumers reluctant to buy GM or Chrysler cars, the government plans to take the unusual step of guaranteeing all warrantees on new cars from either company. These guarantees would lapse back to the companies once they return to health.
The government is now in the business of handling new car warranties?
Good grief. That doesn't assure me in any way.
I don't trust this administration.
...Mr. Wagoner was asked to step down on Friday by Steven Rattner, the investment banker picked last month by the administration to lead the Treasury Department's auto-industry task force. Mr. Rattner broke the news to Mr. Wagoner in person at his office at Treasury, according to an administration official. Afterward, Mr. Rattner met one-on-one with Mr. Henderson, who will fill in as GM's CEO.
"On Friday I was in Washington for a meeting with administration officials," Mr. Wagoner said in a statement released by GM. "In the course of that meeting, they requested that I 'step aside' as CEO of GM, and so I have."
Read Wagoner's complete statement here.
This statement on officer and board announcements is chilling.
GM is announcing the following changes in the corporate officers and the board of directors:
Rick Wagoner is stepping down as chairman and CEO, effective immediately. Wagoner, 56, was named president and CEO in 2000, and assumed the role of chairman in 2003.
Fritz Henderson, GM president and chief operating officer, will serve as CEO. Henderson, 50, was named to his current position in 2008. He was previously vice chairman and chief financial officer.
Kent Kresa, chairman emeritus, Northrop Grumman Corporation, has been named interim non-executive chairman of the board of directors. Kresa became a GM director in 2003
GM is awaiting further announcements by the President and the Task Force on Automotive Reconstruction, and we will have additional comments at that time.
GM Board of Directors statement, attributable to Kent Kresa, Chairman
“The Board has recognized for some time that the Company’s restructuring will likely cause a significant change in the stockholders of the Company and create the need for new directors with additional skills and experience. The Board intends to work to nominate a slate of directors for the next annual meeting that will include a majority of new directors taking into account the addition of new directors, retirement, and decisions by individual directors not to stand for re-election, although the specific individuals who will be nominated or choose not to run or leave the board are not yet known.”
"GM is awaiting further announcements by the President and the Task Force on Automotive Reconstruction, and we will have additional comments at that time."
Translation: GM is at the mercy of Obama and his task force.
This government takeover is frightening. I feel our freedom slipping away. I fear that the invasion of GM is just the beginning.
When Obama was elected, I had plenty of doubts and concerns. But I never thought after about two months of Obama being in office, he would be using his power to fire a private sector CEO.
He has gone too far already and he has plans to keep going.
I don't trust Obama.
The uncertainty of how much damage his policies will directly do to my family and our future is really stressful. It's taking a terrible toll.
Joe Scarborough - Mystified
3 minutes ago