"Obama steadfast on course for autos; Critics fear bumps if US tries to steer Detroit to recovery" by Robert Weisman, Globe Staff | March 31, 2009
President Obama roiled stocks and provoked free-market critics yesterday by rebuffing carmakers' turnaround plans and imposing strict new conditions for rescuing
The president's "tough love" ultimatum came a day after the government, threatening to withhold further bailout money, forced the removal of GM chief executive Rick Wagoner.
It stirred unease among investors looking for signs of recovery, sending the Dow Jones industrial average tumbling 254 points, or 3.3 percent, its steepest one-day point and percentage drop since March 5. Skeptics said the government was stepping up federal intervention in the economy to a degree not seen since the Great Depression, moving beyond financial bailouts into a managerial role to which it is ill-suited.
I was surprised to see skeptics so early in the Globe piece. They must favor an auto bailout then.
"This nationalization of business may prove to be folly," warned Louis E. Lataif, dean of Boston University's School of Management and a former president of Ford Europe, a division of the American automaker now based in Germany. "The notion that anybody in Washington knows how to run the auto industry in Detroit is laughable. And I don't think they know how to run the banks either."
Yeah, they do a great job with everything they touch, don't they?
But others said a stronger government oversight is justified, given the flow of taxpayer money to mismanaged automakers and the public outcry over giant bonuses at government-backed firms like the troubled insurer
AIG gets more mention now than "suiciders."
"They're drawing a line in the sand, telling GM and Chrysler their plans came up short and giving them a timetable for correcting it," said George M. Magliano, auto research director for IHS Global Insight in Lexington. "Anything that might guarantee jobs in the United States is going to be welcomed by the general public."
And how exactly does it do that? See: GM Gives America the Tail Pipe
While citing the importance of the auto industry as "an emblem of the American spirit," Obama yesterday said General Motors Corp. and Chrysler LLC needed to wring more concessions from unions and bondholders before the government would approve more bailout funds....
Why? Don't they have a CONTRACT?
"We cannot continue to excuse poor decisions," Obama said. "And we can not make the survival of our auto industry dependent on an unending flow of tax dollars. These companies - and this industry - must ultimately stand on their own, not as wards of the state."
Then GET OUT of the WAY, dictator!!!
And I guess we CAN CONTINUE to EXCUSE POOR DECISIONS when it comes to OCCUPATIONS and the LIES they are built on, 'eh?
Under one scenario being considered, the Obama administration would use bankruptcy filings to relieve Chrysler and GM of bondholder debt and retiree healthcare costs. Under bankruptcy, firms can escape some obligations while they reorganize.
Then WHAT was the $40 BILLION for if they are just going to GO INTO BANKRUPTCY anyway? YOU BEEN HAD AGAIN, taxpayers!
Business leaders from bankers to auto dealers expressed discomfort at the expanding federal role, which has included the sacking of chief executives at financial companies accepting bailout funds, such as Robert Willumstad at AIG and Daniel Mudd and Richard Syron at the mortgage-finance companies
Some suggested that well-runcompanies were likely to be punished for the sins of big banks and automakers. "My guess is we'll all be held to closer account going forward," said Kevin T. Bottomley, chief executive of Danvers Bank, which has 15 branches in Eastern Massachusetts. "In the long run, government intervention at the level we're seeing - both in the auto industry and in the financial industry - is not healthy."
James G. Boyle, who runs a GMC truck dealership in Hudson and a
And the military isn't that swift, either, guy. Seen all the looting in that outfit?
The government rescue of failing banks and automakers could provoke a backlash among hard-pressed small businesses and taxpayers, suggested Donald Klepper-Smith, chief economist for research firm DataCore Partners in New Haven, Conn.
Could? It ALREADY HAS!!!!!
"It's creating a system of haves and have-nots, those exposed to risk and those protected from risk," Klepper-Smith said. "The average taxpayer doesn't have his job or his 401(k) protected, and he's asking why GM or the banks are being protected. For those who played by the rules and made tough financial decisions, this is creating a sense of resentment."
It sure as hell is!!!
Shareholders have seized on the government's ouster of several chief executives to demand accountability in other financial institutions. Some of
BU's Lataif said companies might refuse federal money in the future because of the strings attached. "The only ones who are going to take it are the ones less likely to pay it back," he said.
And who will be left holding the bag? See that reflection in the mirror, taxpayer.
But others acknowledged that certain companies, particularly financial institutions, have become too big to fail without threatening the broader economy. Businesses have to recognize a government role - even in operations and management - as the price of accepting government money, they said.
"They've sent out an unequivocal message," said Bottomley at Danvers Bank. "If you have the government as a shareholder and they want you to take bold action, then you have to take bold action. They have the keys, so you have to listen to them."
--more--"Where to, Sig Heil?
