Government Motors

U.S. Forces Out GM CEO Wagoner

Excerpt:

The Obama administration used the threat of withholding more bailout money to force out General Motors Corp. Chief Executive Rick Wagoner and administer harsh medicine to Chrysler LLC, marking one of the most dramatic government interventions in private industry since the economic crisis began last year.

The administration's auto team announced the departure of Mr. Wagoner on Sunday. In a summary of its findings, the task force added that it doesn't believe Chrysler is viable as a stand-alone company and suggested that the best chance for success for both GM and Chrysler "may well require utilizing the bankruptcy code in a quick and surgical way."

The move also indicates that the Treasury Department intends to wade more deeply than most observers expected into the affairs of the country's largest and oldest car company.

After more than a month of analysis, the administration's auto task force determined that neither company had put forward viable plans to restructure and survive. The verdict was gloomier for Chrysler. The government said it would provide Chrysler with capital for 30 days to cut a workable arrangement with Fiat SpA, the Italian auto maker that has a tentative alliance with Chrysler.

Comment: If you take the government money they can make you "dance to their tune". I have a Fiat story: Back when I was in seminary school ('78-80) we needed a new car. Our old Plymouth was a gas hog and had well over 100,000 miles on it. We looked at a Fiat 128. Years ago people used to joke that FIAT stood for "Fix It Again Tony".

Update: President Obama's remarks on U.S. car industry

Excerpt:

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 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.

Comment: You probably will need to stand in line at the post office or petition the IRS to get warranty work done! Maybe they can start "means testing" the owners to see if their income is low enough to have work done on their car!