Would you buy a used car from this man — Barack Obama, that is?
Well, you may just have to if you buy a certified pre-owned one from General Motors. The president’s forced resignation of GM’s Richard Wagoner has given a whole new meaning to the question. Some members of the beleaguered company’s board of directors face the same fate. And those who replace them apparently would have to be approved by the White House.
That’s the price of government salvation for the one-time king of the road that has only a few weeks to restructure itself out of the dilemma to the satisfaction of its federal creditors or face bankruptcy, a move it has sought to avoid but seems more and more likely every day. It reminds one of the man who fell off the 10-story building and as he passed every floor was heard to say, "So far so good."
Whatever one’s feeling about the latest chapter in the GM saga that appears destined to end in a collision with the ground, the government control, while probably necessary under the current circumstances, is an inevitability that is more than just nervous-making for those who believe in free enterprise. Is European socialism just around the corner? Has American style capitalism begun to crumble, apparently to the delight of our "friends" overseas, wherever they may be?
An old friend greeted the news of Wagoner’s firing by wondering what "Engine Charlie" Wilson, the legendary president of GM, would have told a president who ordered him off the premises. But then Wilson never had to ask the government to bail him out. Sadly, Wagoner had not done a bad job despite the public relations people who told him that he should travel to Washington for a handout in a private jet. By the time he drove to the second meeting in one of his company’s hybrid cars, it was too late to change the image.
Wagoner, who had worked his way up the corporate ladder, actually had been able to win important concessions from the unions, including putting the enormous health care costs into a union run trust. It is true that he built SUVs and pickups when it might have been better to concentrate on economy cars. But if he had, the unwieldy concern he ran might have been underwater sooner. After all he was building what the market wanted — make that demanded — until the oil bandits jacked the prices to astronomical levels and the economy caved in and credit, the life’s blood of the auto industry, dried up, dropping sales by 40 percent.
As in all things, timing is crucial and Wagoner just happened to be there at the wrong time. The question now is whether there ever again will be a right time for GM and under what conditions. Chrysler, the White House has determined, is not capable of standing alone and has less than 30 days to complete a merger with Fiat.
The experts have a jaundiced view of that succeeding for long even if it is completed in time. The last time Chrysler tried it with Daimler, it was a bust. The cultures are just too different. I was there when three major New York newspapers tried a joint operation in the late ’60s. It was a six-month failure.
Some of us predicted early on that national prestige would suffer dramatically if America’s car builders disappeared. We are not far from that disaster with only Ford managing somehow to keep its tires inflated. The jobs provided by foreign-owned competitors here never will equal what Detroit offered. Who’s to blame for this debacle? The answer is nearly everybody, including the consumers.
But one can’t help being concerned that the president of the United States and not the shareholders has decided who should run a company, a power not in his constitutional job description. The precedent is downright scary even if it does seem necessary.
(E-mail Dan K. Thomasson, former editor of the Scripps Howard News Service, at thomassondan(at)aol.com.)