What Do You Think of Obama’s Auto Plans?

March 30th, 2009

obama

I can’t wait to hear what tgriffith and jgoods think of today’s heaping helping of auto news, but since they’re both on vacation, I’m going to ask what you think. First, as you’ve probably heard, GM CEO Rick Wagoner stepped down yesterday, apparently having been asked to do so by the Obama administration’s auto task force on Friday, and Fritz Henderson, former COO, will take over. And here are some highlights of a speech Obama delivered this morning:

  • President Obama’s auto task force rejected the restructuring plans GM and Chrysler submitted to get more bailout money.
  • The government will cover GM’s operating expenses for 60 days while the automaker drafts a much more aggressive restructuring plan, and Chrysler will get 30 days to fine-tune its plan to partner with Fiat.
  • Obama noted that bankruptcy was still a possibility for both companies, but that the government very much wants them to stay in business and will now back both companies’ warranties.
  • Obama announced a tax incentive for new-car buyers and that he wants to implement a cash-for-clunkers program to encourage the owners of older cars to replace them with newer, more fuel efficient cars.
  • Obama appointed a Director of Recovery for Auto Communities and Workers, who will provide support to and pursue opportunities for those who’ve been most impacted by the auto industry’s difficulties.

Needless to say, all this news has generated a lot of reaction. Some think Obama went too far by forcing the exit of Wagoner, particularly since Wall Street has offered much less in the way of compromise and collaboration in return for its bailout money. Some think the government bailout of both industries may be the beginning of a march toward socialism. Many are simply alarmed by the amount of money Obama plans to spend saving GM and Chrysler. And some take a simpler, more practical view, pointing out that now may be the best – and perhaps the last – time to buy a new American-made car with a powerful V8 under the hood.

Do you think GM and Chrysler need to be saved? Do you think Obama and the steps he announced today can help save them?

-Steve Halloran

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  1. marsneedsh2o
    | #1

    Obama’s plan is not good for capitalism as we know it.

  2. Randy
    | #2

    This country hasn’t practiced true capitalism in a long time, thank goodness, but the continuing erosion of the middle class and the return to the sweatshop days of your great-great grandparents looks like it. They worked themselves to death in their fifties– 12 hour days, 6 days a week. No wonder Christianity did so well– It was the only way to get a day off. If you look at American workplace trends, we are going backwards very quickly.

    Back to GM, Wagoner departing is great, and Lutz needs to be gone TODAY as well. Why this company-wrecker is still getting paid by GM to be an “advisor” until the end of the year is a mystery. Lutz has a lot to do with GM’s problems, and the best advice he can give to GM planners is “Do the opposite of what I recommend.”

    A prepackaged bankruptcy is what GM really needs. To quickly shed the overburden of dealers and the billions in obligations it’s workers, the company will need the bankruptcy process. Wiping out common stock shareholders will be another feature. GM will come out of it lean, mean, and thoroughly hated by hundreds of thousands of it’s own workers, retirees, former common stock holders, suppliers and their employees, and most of the rice burner buyers on both coasts. Sounds like a great recipe for success, cooked up by the Federal Government, which would be bankrupt and jailed in toto if it had to follow the same laws it sets down for everyone else.

    Ah, I feel better now. Rant over and out.

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