Big news from Washington and Detroit over the weekend. The Detroit News reported on Sunday.
General Motors Corp. Chairman and Chief Executive Officer Rick Wagoner is stepping down after being asked by the Obama administration to relinquish his position at the helm of the largest American automaker, people familiar with the situation said Sunday.
Wagoner is going to walk away with a $20 Million retirement though. I’m just waiting to see if Congress will try to impose a 90% tax on it like they did the AIG bonuses.
Not only that the Obama administration instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as a condition for receiving more government aid. Then President Obama in his remarks today said that the U.S. Government will guarantee all GM warranties.
It is my hope that the steps I am announcing today will go a long way towards answering many of the questions people may have about the future of GM and Chrysler. But just in case there are still nagging doubts, let me say it as plainly as I can — if you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warrantee (sic) will be safe.
In fact, it will be safer than it’s ever been. Because starting today, the United States government will stand behind your warrantee. (emphasis mine)
The nine scariest words in the English language have now been amended. And hey wow, the taxpayers get to guarantee their own warranties. Thanks. I’m just curious when the teleprompter President Obama says “let me be clear” that it negates the actions he’s taking that seem contrary to the rhetoric we hear come from his mouth?
Let me be clear: the United States government has no interest or intention of running GM. What we are interested in is giving GM an opportunity to finally make those much-needed changes that will let them emerge from this crisis a stronger and more competitive company.
Well that just makes me feel all better. Now I understand that when you ask for government money that you shouldn’t not expect government involvement. They say they don’t want to run GM and Chrysler, but doesn’t essentially firing a CEO, directing a merger, and basically directing their restructure basically mean they are running GM?
Hail the auto repairman-in-chief!
What do you think about this?
Update: Mel mentioned in the comments that “they have torn up the Constitution in DC.” To follow up that… blogging Diva extraordinaire, Tabitha Hale, the Pink Elephant Pundit asks… how is this not socialism?
Will all of you who are so convinced this administration is NOT heading toward socialism please explain to me how this isn’t socialism? Anyone? Because I’m pretty positive that this is the government controlling production, buying up the private sector, etc. Which is the definition of socialism.
Yes Tabitha that ship has sailed.
2nd Update: The obvious result of this move by the Obama administration.
LOL, thanks Rick, it’s nice to find something funny about this.
Shane Vander Hart
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an Obama promise to backup your car's warrantee. bah wah ha ha ha… um he promises
A new world, not necessarily a brave one. Can't imagine how long it will take to get an oil change now.
they have torn up the Constitution in DC
is that obama's misspelling of warranty?
IMO all a CEO needs to do is make a profit and not take money from govt loan sharks.. seems simple to me.. it is in their power to make it happen.. it is the way that a free market works.
It would have been better for them to file bankruptcy.
Well, Obama also prefaced his signing of the porkulus bill by saying he was not in favor of growing government…Guess he's got his fingers crossed behind his back.
So don't hold our breath is what you're saying?
No that would be Reuters who did the transcript, unless they pre-released the speech to the press.
Just as soon as you fill out about 10 forms in triplicate.
Pretty much.
Well, we told them so.
It may still happen.
I'm with Kansas Bob, GM doesn't have to take the money. Ditto for Chrysler. Of course, if they go into bankrupcty, then the US will still left holding the bag with underfunded pensions and the former workers will be seriously hosed (not that we're not headed there anyway). I'm sure the exec's pensions are protected and fully funded in any case.
What's wrong with socialism?
Kidding right? Trying to think back to when it actually worked and helped an economy… thinking, thinking, nope can't come up with anything.