So, G.M. is going into bankruptcy, and the government's going to own a big slice. Yep. Please raise your hand if you're surprised. OK, seeing no hands up, let's move on to what's really interesting here: who exactly is going to be running G.M.
I think the answer lies in the video above. No, not just in the president's remarks, where he says that he won't be making the decisions -- in the people who are in attendance at the remarks. Namely, in his auto task force.
So who are all these people standing with him? Well, from left to right, I spot:
Christina Romer, Chair of the Council of Economic Advisers
Stephen Chu, Secretary of Energy
Hilda Solis, Secretary of Labor
Barack Obama -- what's that guy do?
Gary Locke, Secretary of Commerce
Ray LaHood, Secretary of Transportation and Natty Handkerchiefs
Peter Orszag, OMB Director
Next row:
Austan Goolsbee, member of the Council of Economic Advisers
Larry Summers, director of the National Economic Council
Carol Browner, assistant to the president for Energy and Climate Change
The Mayor from Spin City Jared Bernstein, Economic Adviser to VP Joe Biden
Back row:
Ron Bloom, senior adviser at Treasury
Gene Sperling, counselor to Geithner and member of the CEA
Ed Montgomery, Director of Recovery for Auto Communities and Workers
Steven Rattner, who I believe to be the Car Czar and possibly also the Worst Tie Picker in history
Stephen Chu, Secretary of Energy
Hilda Solis, Secretary of Labor
Barack Obama -- what's that guy do?
Gary Locke, Secretary of Commerce
Ray LaHood, Secretary of Transportation and Natty Handkerchiefs
Peter Orszag, OMB Director
Next row:
Austan Goolsbee, member of the Council of Economic Advisers
Larry Summers, director of the National Economic Council
Carol Browner, assistant to the president for Energy and Climate Change
Back row:
Ron Bloom, senior adviser at Treasury
Gene Sperling, counselor to Geithner and member of the CEA
Ed Montgomery, Director of Recovery for Auto Communities and Workers
Steven Rattner, who I believe to be the Car Czar and possibly also the Worst Tie Picker in history
Not pictured: Tim Geithner, who's in China, and about six other second-tier members of the auto task force, including the 31 year old that the New York Times seems to think is running this show, Brian Deese. I guess there's only so many people you can fit in the Grand Foyer.
Image means a lot in Washington. Obama may be saying, today, that the government is going to keep its nose out of the new G.M., but we're still a few months away from that new entity, and everyone standing behind him will have a say in what it looks like.
So what I'm most interested in here is that two people -- Chu and Browner -- are present from the energy/environment side. The way the administration has tied the success of the automotive industry to the cause of the environment is kind of fascinating. Chrysler is being pushed toward smaller, more eco-friendly models, and now it seems inevitable that G.M. will be pushed that way, too. These people -- this task force -- is built to do exactly that.
In case you're wondering, as I did, who President Bush brought out with him when he announced the auto bailout, here's the answer:
Bush stood alone and couched his discussion of the loans in almost completely business terms. He made no mention of the companies changing to fuel efficient models or of any goal to achieve energy independence, as Obama did in his speech.
I kind of like the new crowd.
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Catherine Forsythe
Writer to the Stars
Emily Holleman
Iron Skillet
Leslie Harpole
old new lefty
Salon.com
Comments
Private business does not need the government to "push" them in any direction. If you can't compete, you fail. If you build a better mouse trap the world beats a path to your door.
GM makes or breaks on its ability to sell cars. If it's not restructured around that goal, the money poured into it—and the jobs being protected by that money—is for naught. A serious gas tax puts the same burden on BMW and Toyota as on whatever the restructured GM is. A restructured GM that is a quarter focused on policy goals has different burdens than MB or Honda and will fail.
GM and its ilk (in league with the oil folks) have been malevolent forces, preventing this country from progressing by buying politicians and convincing them that making more efficient cars will destroy them. Guess what. They were the opposite of right.
Obama and co. are going to harness this thing and make it a positive force to kick us into a new energy economy. As powerful a force as GM has been in preventing progress, it will now (if it works) be the engine of progress.
It's beyond plain market forces.
A bit condescending, nutjob?
TNSTAAFM. The automakers and oil peddlers have sucked at the government teat for 60 years.
You've been paying the price for being stuck on oil in your income taxes for your entire working life. It's called subsidy. And oil war.
Now the poles have been reversed.
I'm not only willing to pay taxes to make GM an electric-fuelcell-biohybrid force, I'll buy a GM car if it doesn't run on dinosaur bones.
Don't forget the national security implications. GM does make a heck of a lot of vehicles for military use; and don't forget the troops who are killed in the supply train delivering gas to run the GM Humvees; How about if they run on hydrogen created on site in Baghdad through solar electrolysis?
You save money. And blood.
Penny wise, pound foolish.
Time to smarten up, folks.
Our population is stagnant...not growing...and in the next twenty years or so as the baby-boomers pass on, we will be losing one of the largest segments of our population. This is the class that has control of the money right now. We would be better served if the government would ask companies to go to a 4 day work week. It would slow the economy down for everyone and if there was an industry that needed to grow, they could put more people to work.
I want the government out of my life, I don't want to be bedded with them. I already feel smothered by all of the czars and presidential decrees.
I know the President needs some power, but I think the administration is sucking way too much away from the people at this point. I am not condoning what Bush did either. I feel he was sucked into this "government can cure all" mentality as well. I feel like a helpless outside observer watching our country go down in flames, just as Rome burned to the ground. Oh we the people will survive, but we won't come out looking like anything we are familiar with.
It's about time that the government stepped in, saved some jobs, forced some partying, high school educated fools to get more training, smacked the crooked, greedy unions down a notch, and cleaned up the train wreck.
When I can trade in my darned good KIA, which at 8 years old, retains more resale value than any GM pile of crap, for a more energy efficient vehicle that won't fall apart in five years, or kill me with bad passenger safety, I'll go green.
http://www.nytimes.com/2009/06/01/business/01deese.html?_r=1&em
"It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism. But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry."
Interesting story & I hope he's not in over his head.
Rated
"Let them fail." I'm so tired of that. It's not just the automakers that suffer (which seems to be okay with most Republicans, because autoworkers and union members are Democrats, right?).
But the vast majority of domestic dealers are Republican, and they're very much in favor of the bailout.
Gee, I wonder why?
As far as government gravy trains go, the auto industry has been bankrolled by anti-market forces for years. So why the sudden demand that they work by "market" rules now?
It's not as simple as "build a better mousetrap." The EV-1 was a better mousetrap. It's also "believe in the mission behind your better mousetrap even when cheap crappy mousetraps make you more money in the short run."
That, rwnutjob, is the essence of current corporate thinking, by the way: make money as fast as possible, look for the highest short-term gains, and never think about consequences beyond your own bank account.
When you consider that in the past, our government actually enabled companies like GM to act foolishly by offering tax breaks! to purchasers of Hummers... how can anyone say that we don't need a bit of yin to mitigate waaaaay too much yang?
I do love your analyses, Saturn!
i don't mean to be flippant but i'm very much in the wait and see how this turns out mode. one things is for sure; it's a damn sight better than what the last guy did, which nothing.
While I agree that we should let the free market reign, and if they fail, they fail, we have to keep in mind the situation in December of last year. Without government support, both GM and Chrysler would have filed Chapter 11. With the credit markets completely frozen, they would have never received debtor-in-possession financing. So they would have ended up in liquidation. Taking down the company, the suppliers, the dealers, and the small businesses in the towns surrounding those plants.
We had no choice, in my humble opinion, but to provide assistance.
So now to the go forward picture.....these are seriously broken companies. They build cars people won't buy and have turned entire generations off of their products. They are hamstrung by outrageous pension and retiree medical liabilities caused by our lack of national health care. We have given consumers tax incentives to buy the biggest of the vehicles they make.
They have to be remade. The new owners (us/unions/Canada/Fiat, et al) are demanding something different. I have seen many a company taken over and the new owner almost always demands something new. I see this as no different. I hope we (the royal we: us/unions/Canada/Fiat, et al) set them on the right course then get the taxpayers out of it.....because in the end, I don't want to own a car company. In the short run, I think it is fine.
co2 is not something you can see. Your air may not look so bad, but the planet is dying. Citizens will keep buying bigger houses and larger cars . . . until somebody tells them "no." Businesses will keep on happily supplying these things that will kill us until somebody tells them "no."
So bring on the government! (In the form of smart, science-friendly wonks.) Will they be perfect? No. But somebody has got to make better decisions than consumers and the companies who feed our appetites for More and Bigger.
The market alone cannot cure what ails us.
The auto business is simple- product is King. They must have compelling products again. All the environmental talk is useless unless they sell cars. You want environmentally sound cars? Fine- make it, sex it up, and sell it. With the emphasis on SEX IT UP. Nobody wants a neutered government mobile.
So as you can see we are in good hands. LOL! Who ARE these people? This is the best line of his description: He emerged as "one of the most influential voices" in the Obama Administration relative to the auto industry, and specifically the Chrysler and GM workouts. Really? Why? Maybe he drives a Chrysler.
Since I own GM now I would like to have someone in charge who actually knows a thing or two about the industry. I need to call the Chairman of the Board: Obama.