Thursday, April 2, 2009

Why the heck not?

A lot of media types are reacting negatively to the forcing out of GM CEO Rick Wagoner (he's comforted only by the $20 million retirement package). The argument, similar to that of the folks who argued the AIG bonuses weren't so bad, is that government shouldn't interfere this dramatically with the operations of a private company, and the CEO is just a fall guy for bigger problems; he alone doesn't make much of a difference anyway.

For the first objection, I would counter that GM (and AIG and...) is no longer a private corporation. If you can't survive without public money, you end up with obligations and accountability to the public at large. The day Wagoner hopped on the private jet to come to Washington with his hand out is the day he should have started to look around the office to see what he wanted to take home.

The second objection is, if anything, even more idiotic. GM has lost $82 billion over the past four years. Had they earned that much, Wagoner would be rolling in money and on the cover of every major news magazine. His leadership would be seen as significant.

At base, though, my feeling is this: why not get rid of him? If various pundits can ask the opposite, why bother getting him out, I can certainly ask the opposite. Had he any way to save GM, he presumably would have shown it well before now. Since the whole thing has become a crap shoot anyway, let's get another shooter in there.

1 comment:

Anonymous said...

Your last paragraph is hilarious :-)

Frankly, whoever foots the bills should call the shot.

The GM situation is no different for companies who have violated their covenants or financial obligations that the banks or bondholders will pressure the board to instill their own interim management team before they determine whether or not to continue the lifeline.

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