I remember a time, not too long ago, when executives at General Motors flew their private jets to Washington, D.C., to beg for a bailout.
It was either get bailed out with government dollars or, they said, fall victim to a terrible bankruptcy ending in liquidation and the loss of hundreds of thousands, if not millions, of jobs.
Like most Americans, I was against the bailout and believed GM should have faced the consequences of its business decisions just like any other company in the United States. If liquidation was that consequence, so be it. The government obliged with the bailout, though, and dumped $40.7 billion into GM and became the company’s majority stakeholder.
I admit the decision thus far has mostly paid off for GM. There was a bankruptcy, but the company emerged with fewer brands, a commitment to fuel-efficient vehicles, and a huge increase in quality. Now, though, it seems CEO Ed Whitacre has forgotten who saved his company’s butt and wants the government out of his business.
According to Edmunds InsideLine, Whitacre wants to shed the “Government Motors” tag because it’s an embarrassment to the people at GM.
Yup, the savior of the American auto industry and the reason millions of people still have jobs has gone from hero to embarrassment in a year flat. Doesn’t basic common sense say that you shouldn’t do something today that will embarrass you tomorrow?
Like it or not, the government is entangled in GM for the long haul.
I’m completely shocked that Whitacre would even have the nerve to publicly issue such a statement, but I guess it goes to show that he’s no different than any previous GM CEO and isn’t the guy to orchestrate a complete turnaround of the company. Trust me, Ed, most of us taxpayers aren’t any happier than you about the government’s ownership of your company, but at least we said no from the beginning.
Rather than being embarrassed by the government’s involvement, wouldn’t it be good PR for GM to profusely thank the government on behalf of all employees, then publicly hand over checks until every penny that was invested gets paid back? There’s a mighty big IPO coming up that might cover part of the bill…
Would you invest in new GM stock? Why or why not?