Monday, March 30, 2009
Obama to GM CEO: You're fired
In a move that surprised the industry and will surely rock the stock market today, President Obama asked GM CEO Rick Wagoner to resign. The President has also given Chrysler a 60 day deadline to prove it is worthy of bailout money.
I have a really mixed sort of emotion about this whole thing, as I'm writing this I'm not even sure how the end of this post will look.
On the one hand I LOVE the accountability that Obama is trying to push hard for, especially when giving out tax dollars; as opposed to say... the proposed Conservative slush fund to "quickly disperse the money without going through the usual parliamentary spending checks" , which did not have the safeguards in place to protect Canadian tax dollars. I also love that the President seems to be paying attention to what companies are doing and the economy.
On the flip side, I don't like that when he appears on TV for presidential addresses the stock market almost inevitably goes down the next day. I also very much dislike the idea that a President of the US can force the president of a publicly traded company to resign. Can he urge the board to make radical changes? Certainly. Could he make suggestions to said board? Of course, the bailout money is his to dole out.
But GM is not a federally owned company, like say VIA Rail is here in Canada. That for me is where my moral dilemma lies. I understand that he's trying to look out for his people, making sure their money is well spent, making sure that past trends are reversed; and I agree with all of that. I just have a hard time believing what I'm seeing in the country that is probably the purest form of capitalism known to man, you wouldn't even see something like this in Canada and we LOVE public programs such as Healthcare, Medicare, EI, Welfare, Child Tax Credits and "Free Education". The only time CEOs here were forced to step down was after the sponsorship scandal where government funds had been misspent and misdirected.
GM under its current management probably doesn't deserve billions of tax dollars and yes, the CEO should have resigned, along with most of the board. But that's just my view, as a potential shareholder. Maybe the President is also a shareholder... In any case, as steward to the trillions of American Tax Dollars and after the bailout goes, he'll be the only shareholder that matters.