He owns 60% of the company -- certainly he should have the right to approve more than 0% of its corporate strategy. Even if Obama has promised a hand-off approach, he's still likely to use his free hands to point GM toward certain values, like shifting away from trucks toward fuel-efficent cars. The 1990s and early 2000s was a world in which oil was inexhaustible and cheap and its gluttonous consuption was somewhat of a national right. So this happened (see below) and the nation's foremost car company stopped being a car company with trucks and became a truck company that also made some cars.
This graph shows truck production eclipsing cars just before the turn
of the century, and GM remains historically trucky-heavy
to this day. I can't say how dramatically GM's leadership wants to change that, but Obama has made clear what he wants from
a restructured GM: a company that can compete in a future where oil is
not like air, and fuel-efficient cars dominate the market. Like him, I
just don't see how the road to long-term profit is paved with Cadillac
Escalades.As Atlantic contributor Ryan Avent points out today, rising oil prices are back in the news, as if to torment the memory of the Hummer as its humbled brand. Ryan writes: "We can never again count on consistently cheap oil, and so what can we do to protect ourselves economically?" Jennifer Granholm, in step with the president, blogs today in the Huffington Post that the only future for the decrepit Michigan manufucturing scene is green. I don't believe in micromanaging, but I do believe in macromanaging, and a car company without a realistic vision of future -- whether understood by the GM board or pressed by Washington to internalize it -- is not a car company worth saving.
"Obama owns GM"? I thought we, the sucker taxpayers, owned that worthless bankrupt company.... What should "we" do with it?
I was under the impression that GM got out of cars because they couldn't compete with imports. Now you are expecting them to come from behind and beat the imports at their own game. And make money doing it, so they can repay us taxpayers the $50 billion we loaned them...
If I wanted a high mileage compact car, I'd buy one from Japan, not wait for GM to get its act together. If U.S. emissions rules allowed it, I'd buy a high-mileage diesel import.
There are probably worse investments that spending $100 billion to save a company that employs so many people in the US. Like spending 1 trillion to take ownership of a failed developing country and trying to turn it into a modern secular democracy. However, I fear Obama and co. may have bitten off more than they can chew hear. How will GM make quality mid and small sized cars that are competitive on a quality level with honda and toyota dealing with huge health care costs and a UAW contract that is still remarkably unchanged from the one that they had before. And at the same time, the big money makers, the big vehicles, how will they sell as much as before with tightened credit and likely increasing oil prices.
Debating the badness of the Iraq War II vs. the GM bailout is like debating whether it is worse to blow your your rent money on drugs or alcohol. Don't do either.
67% of the public is against the GM bailout.
Is there any doubt that Obama hijacked the GM bankruptcy process to help the politically connected UAW? Government directing business is not the American way and is almost certainly going to turn out badly for the country. Estimates are that it is going to cost anywhere from $.5M to $2M per job saved (that is, if this process actually ends up saving jobs in the long run).
Extremely partisan Democrats like Robert Reich and Michael Moore are condemning the bailout as misguided.
back in the 70s and 80s many cars were station wagons, with CAFE standards those became impossible, so the mini-van and the SUV (subject to different CAFE standards) were born. These would be classified as light trucks. It is a nice graph but it provides very little context.