Rick Wagoner, the latest in a long series of Obama-bus casualties:
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.
Seriously. How does Team O makes these decisions? Rick Wagoner gets the axe but Tim Geithner stays on?
So what comes next, after the inevitable enormous loan? How about another crisis which we ought not let go to waste? The federally aided and abetted, drawn out failure of the American auto industry is the perfect opportunity to create a new federal agency, new federal regulations, and need for massive federal funding.
In recognition of the damage that the declining U.S. auto industry is having on many of the nation’s communities, Obama will announce tomorrow that he is creating a new initiative to revive them. It will be led by Ed Montgomery, a dean at the University of Maryland and a former deputy labor secretary.
The administration is also seeking to address the fear that the news of the companies’ woes will scare away car buyers. Obama plans to announce today that the administration is creating a program to guarantee the warranties of new vehicles issued by participating manufacturers.
Exactly how much more money the government will lend to the automakers is unknown.
What is known, however, is that the administration expects to dictate all terms going forward, including the size of the American automotive industry of the future.
…Ultimately, however, what led to Wagoner’s ouster may be that his proposal to restructure GM did not pass muster with the Obama administration.
“They’re not there yet,” Obama said yesterday.
Their plan has “got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean, mean, and competitive than it currently is,” he said
He may have been alluding to the fact that the companies have yet to win required concessions from their creditors. …But Obama may also have been alluding to a disagreement over how much smaller GM General Motors and Chrysler should shrink.
One of the key points of contention between the companies and the Obama administration is just how large the U.S. auto market will be in the future. General Motors has offered a more optimistic scenario and shaped its business plan accordingly.
Members of the president’s autos task force have questioned those projections, however, and some industry analysts argue that the companies may need to downsize their operations even more than planned.
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