I, like many others who have even a small bit of knowledge about the Automobile Industry are both puzzled and troubled by the Obama administration's de facto 'Firing' of GM President Rick Waggoner. This action is unfortunately typical of an administration who appoints a board to oversee the Auto industry that has NO-ONE WITH AUTO INDUSTRY EXPERIENCE! Mr. Wagoner has over the last eight years been implementing the very restructuring of his company that talking heads and those inside the Obama administration have been calling for. GM's recovery was well on it's way, and we would not even be in this situation, had it not been for the Financial industry's mishandling of both the credit crisis, and it's aftermath.
GM, Ford and Chrysler were primarily impacted not by their lack of restructuring (which has been extensive and ongoing for years), but by the Wall Street's inability to provide credit to even credit-worthy Auto buyers. Coupled with restrictions on normal lending for operating capital, this created a 'perfect storm' of outside Financial Industry influences that brought the Automakers to their knees. All
too often it is apparent that the Administration has been voicing uninformed opinions about both Auto Industry restructuring (not even realizing it is ALREADY being and has been implemented!) as well as it's woeful lack of understanding of the very nature of this crisis.
This situation is exemplar of the insular D.C./Wall Street insider mentality that got us into this mess in the first place. Ask any Auto Industry veteran, and they will tell you that GM itself experienced the same problem as in the
1980's- a Wall Street mentality that only looked as far as the bottom line and the next fiscal quarter, refusing to try to understand the industry, markets and full dynamics of the problems being faced. The problem only began to be resolved when true automotive industry veterans took the reigns from the bean-counters, and implemented workable real-life solutions to the complex problems they faced.
Comments by those in Washington continually show the lack of depth of understanding by them not only of the Automobile Industry itself, but of Market dynamics and real-life economics as well! Allowing Banks, Investment Firms and Insurance Giants to not only operate 'Business as Usual', but to flaunt their insolence and incompetence in the face of the taxpayers who aare continuing to Bail Them Out (Not seek loans, like Detroit) is unconscionable. Of course, judging from the number of Wall Street insiders running things in the Obama Administration, as well as the lavish
'campaign donations' made to key members of Congress by Wall Street firms, it is entirely understandable (but wholly indefensible) why Wall Street gets the Kid Glove treatment, while Main Street gets the Iron Fist in a Glove full of Vaseline! Having Rick Waggoner, (who has and is implementing the very restructuring being called for) as a sacrificial
offering to political expediency only serves to exemplifly the reality-disconnect in Washington and Wall Street. Not only is there one set of rules for the Auto companies and another for Wall Street, there are now apparently NO RULES for Wall Street, except the ones they make for themselves!
GM has cut almost 70% of it's employees over the last eight years, has reduced it's Union Hourly starting wage by 50% ($28/hour to $14/hour) and has implemented cost and operating efficiencies in every aspect of it's businesses.
It has implemented early retirement programs, buyouts for salaried and hourly workers, and even screwed over it's salaried retirees by reducing or eliminating 'guaranteed' benefits! If that isn't restructuring, I don't know what is.
Of course, the fish rots from the head down. Obama recently said that a 'Model T got better mileage than an SUV'. That sobriquet has been boiler plate for environmentalist whackos for years, and is as TOTALLY FALSE as it was the day some tree-hugging know-nothing made it up out of thin air! But as Hitler's propaganda Minister Goebbels once said 'Tell a lie
loud enough and long enough and the public will believe it". The Obama administration on the one hand says it wants US automakers to be profitable and sustainable businesses, but out of the other side of it's mouth tells them they have to stop making their best-selling vehicles- Trucks, SUV's and crossovers!
They also are trying to implement business-killing and scientifically questionable mileage rules that will cost the Automakers Billions of Dollars, at the same time they are telling the industry to cut costs! This total lack of understanding of basic business principles (and basic economics) makes me wonder just how (in)capable the hands are into which we have placed our economic future.