The unexpected departure of General Motors CEO Ed Whitacre (right) last week was reportedly due to tensions over the timing of a public offering, which the Obama administration wants to take place before the November Congressional elections so that it can declare some kind of “success” for the still-unpopular auto bailout.
A premature IPO must be a really bad idea if it’s too much for Whitacre, who has not exactly demonstrated principled leadership. There’s the problem of taking the GM job in the first place. What kind of capitalist would be a party, or more precisely an accessory after the fact, to the violation of private property rights represented by the crushing of GM bondholders? While CEO, Whitacre did not disappoint his masters in the White House, even appearing in a TV commercial in April in which he falsely claimed that GM had paid back the US government in full and five years ahead of time.
More evidence that the GM IPO is being hurried for political purposes is found in the IPO registration filing yesterday. The company cannot assure the accuracy of its financial information because of weaknesses in its internal controls. How can GM offer and price shares if it cannot even attest to its own financials?
The Securities and Exchange Commission (SEC) is 
Who knew? Ally Bank is running all those TV ads belittling the “fine print” used by other banks. But as the Wall Street Journal 
of General Motors and Chrysler this week has to qualify as one of the most radical moves in the history of American industry. Not only would the Obama administration effectively place these companies under Treasury Department receivership, it would give the United Auto Workers (UAW) a huge financial stake in their operations. Indeed, that would seem to be the point: The administration and organized labor embody the Democratic Party Left. What strengthens one strengthens the other.
Even the United Auto Workers knows that sometimes it's necessary to bite the bullet to come out ahead in the long term. On Monday, February 23, the UAW and the Ford Motor Co. announced they had hammered out the details of a new agreement to preserve retiree health care benefits without jeopardizing the company's existence. The pact would have Ford to pay the union up to half its liabilities in the form of company stock. Given precipitous declines in auto industry stock prices over the last year, it's a sensible way to avoid disaster.
Peter Flaherty, President of the National Legal and Policy Center (NLPC), today criticized proposals to bailout GM, Chrysler and Ford, arguing that the plans are actually intended to bailout the United Auto Workers (UAW). Flaherty said:
