Although Rick Wagoner should have been gone years ago, Barack Obama has exceeded presidential authority in firing the CEO of a major corporation. Of course, the justification is that GM is accepting government money, but Congress has not authorized money for an auto bailout.
The money has come from the TARP, which was supposed to used to buy the toxic assets of banks. The Constitution is being shredded. This concentration of power in the hands of the President, a small circle of advisors, and financiers is dangerous.
If Obama can take over sick companies, why can’t he take over healthy companies he doesn’t like? After all, he’s not only criticized the auto companies for building certain kinds of cars, but he’s criticized oil companies for their business decisions. Can Obama now tell oil companies to close down their wells and build windmills?
It is government that destroyed the U.S. carmakers in the first place. Mileage standards have forced the companies to build cars that are unprofitable. The GM management has indeed failed, but government is a bigger failure.
The politicization of the auto industry will be followed by massive corruption. Business decisions will not be based on economics, but on political influence. There already exists a legal process to ensure fairness to creditors and other stakeholders when company gets into trouble — it’s called bankruptcy.
The issue is not the future of the auto industry, it’s Government Gone Wild.