National Debt Clock

Monday, March 30, 2009

U.S. Forces Out GM CEO Wagoner

First of all, I am torn with this move by the administration. On one hand I am content because the loans that the government would be giving GM come from us, the taxpayers. So, if the company isn't restructuring efficiently, I'm sort of glad to see that there are at least some preconditions that GM must fulfill. If that means replacing their CEO, then go ahead.

On the other hand, we now have the government forcing an employee of a private sector business to set down. Is that really American? If a company becomes uncompetitive through it's own fault, where in the Constitution does it say that I have to pay money to "save" it? Americans deliberately did not buy GM cars because they did not prefer them. Now we are being forced to buy them anyways by having to fork over our tax dollars. And when does it end? How much more money? If the CEO had to step down because GM isn't making necessary gains in restructuring, when do we cut our losses and say enough is enough?

And since when is a political administration experts in the auto industry? We have this:

"The clearest losers appear to be the thousands of bondholders and lenders to both GM and Chrysler. In both cases, administration officials said that the companies were burdened by inordinate amounts of debt that would have to be scrubbed. Chrysler's survival, the administration said, would require "extinguishing the vast majority" of the company's secured debt and all of its unsecured debt and equity"

So now the administration is cancelling debt? These people risked their money to invest in this company and they are now just being wiped out...through a political process that is arbitrary? What ever happened to chapter 11? That's what was set up for situations like this. If the investors lose everything in chapter 11, then so be it, those are the rules. But to have a political administration making decisions such as this is horrible.

So, I guess I'm not torn, this is a bad idea.

No comments:

Post a Comment