GM, Rick Wagoner, and the bailout
March 29, 2009
business / politics
There is a bit of discussion about the fact that the White House has asked Rick Wagoner to step down as General Motors CEO. Many conservatives are loudly complaining that the government is intruding into business, and doing things it has no business doing.
Seriously? Government has no business in the workings of GM? Do people know how much money GM has begged for, and will probably beg for again, just because it is “too big to fail”? Do people recognize that GM has utterly failed, and that usually when a business fails its CEO is replaced by its owners? Those owners, in GM’s case, would be the government, at this point.
Certainly, the government’s ownership of GM is a complex issue, and it cannot be explained by saying, “No, we should have let it fail,” or “Yes, we should have bailed it out.” The causes of the company’s utter failure, while they are also complex, have been greatly explained by this visualization at Mint.com, a wonderful personal finance site.
A robust understanding of this data, and of other data that is available, indicates that if GM’s management had been able to solve even a few of these issues, it is very likely that it would not be in the abyss in which it currently finds itself. Certainly it wouldn’t be doing well, but it might be no worse off than Ford, at this point.
In that case, I think it is completely reasonable that the White House wouldn’t have asked Wagoner to leave, as he would have been at least a little bit above terrible in his management of the company. But as we currently stand, I think it’s illogical to say that it is not within the government’s right to demand this.
On a more sarcastic but equally informative note, if you didn’t see it in December, have a look at this gem of an image, which was on this post by Andrew Sullivan.