The Government Isn’t Running GM?

It looks like the government is forcing Rick Waggoner out and playing a big role in the Fiat deal with Chrysler.

So is the administration playing the role of Board Chairman with GM and investment banker with Chrysler?

I certainly do not have the answers here, not by any stretch, but hasn’t Fritz Henderson been part of the senior leadership at GM during all of this and I seem to remember Fiat making very unreliable cars.

I must be missing something.

19 Comments

  1. Can you imagine the backlash if the gov’t somehow funded a big profit for Cerberos? heh.

    Reply
  2. As much as I disdain government run business, it seems as though someone needs to be holding our indentured automakers(which we now seem to own via the loans. . . like it or not) feet to the fire. It seems like up to this point, they just haven’t “got it” so to speak. Tweaking a failing company is not the same as drastically altering the way one does business. Paying lots of salary and benefits to workers, and retirees, to make a product that noone wants much of right now, nor in the foreseeable future, is continuing congruent with continuing to fail. We have the best bankruptcy laws in the world, designed to allow a company to renegotiate contracts with labor, creditors, suppliers, etc. Survival of the mothership is critical here, and until these companies can completely remake themselves, they’re doomed to failure, along with their employees, investors, creditors, and suppliers.

    Reply
  3. I spent 15 years restoring European sportscars as a hobby. Mostly MG, Triumph, Austin Healey, Morgan, etc.
    As quirky as the British Sportscars were, NO ONE in our club wanted to own a Fiat. Poor engineering, insipid design, terrible performance. Should fit in quite nicely with GM.

    Reply
  4. Roger,
    I just saw your video from Saturday and wanted to respond. FYI, my comments regarding Yardeni and Roubini were simply meant to question the validity of any of these economic forecasters and hopefully were not construed as questioning your strategy. It amazes me how you can have two highly intelligent individuals like Yardeni and Roubini and yet have two vastly different outlooks. This than leads me to the question of how anyone can successfully market time?
    Keep up the good work.
    Susan

    Reply
  5. As to how Obama should (may) play the unions look to Thatcher and the coal miners. Before the government closed the under performing pits in the 80s (which lead to bitter industrial action), they planned ahead by stock-piling coal, converted some power stations to burn oil, and recruited fleets of road hauliers to transport coal in case sympathetic railwaymen went on strike to support the miners.

    What eventually came out of this was a much smaller, but profitable, coal industry. Whole towns were left jobless, where 3 or more generations of families had worked in that industry. Many of those towns were left looking hopeless but came back eventually (up to 15 years later) – with plenty of help and subsidies from later governments.

    Those people now have a better quality of life than Londoners due to cheaper housing, less traffic and cleaner air, albeit with a lower income.

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  6. GM built Hummers and brought back the Mustang while Toyota and Honda actually innovated with new auto technology.

    The deserve to go bankrupt, there are new US auto companies trying to break through the union bottleneck and start innovation again.

    Mostly electric cars.

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  7. Roger,
    I have an alfa romeo year 2000made by fiat. We are in 2009 and never ever needed a tuneup. Only change motor oil, filters(air and Fuel) once a year and put in a cleaner for injectors. After 9 years it still runs like new. I can’t wait to buy a Ferrari. Well I learned that the same engine used in my car it is used by Mercedis-Benz for their diesel versions. So americans have been purchasing fiat diesel engines only with the mercedis sticker.
    Best,
    Jeff from Milan Italy

    Reply
  8. I think the Fiat engines are only used in Mitsubishi and Fuso branded trucks from Daimler truck group. I could be wrong.

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  9. SD, is it your b-day tomorrow? happy happy

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  10. anon@1:34,

    The Mustang is, and has always been built by Ford, NOT GM. Making such an elementary mistake casts doubt on anything else you say that may follow.

    There’s no doubt that the “Little 3” have made mistakes, over the years, but I find myself disturbed that the current administration seems to be adopting MUCH tougher standards to the corporate management of the auto makers, than to the heads of the megabanks, which were MUCH more directly responsible for placing us where we are now, economically speaking. The fact that Geitner and Summers hold the positions they do would have NOTHING to do with sort of disaparity, though, would it? (snark off).

    Sorry for the rant, but am ticked off…

    Reply
  11. The failure of the US auto industry, like so many other recent domestic failures, is a failure of imagination… while autos are a necessity and a commodity, very few make their purchases on that basis… automobiles are about dreams, expressed through design… and while the execs and boards can work around the edges improving some of the build quality, the fact that most auto designers go to school in Pasadena only to leave for Europe or Asia tells you all you need to know about where the innovation will be and where it will not be…

    The US auto industry has been dead from the neck up for some time now, kept alive via the life support of the SUV, cheap US gas prices and zero percent financing and leasing… but as we see, the bill eventually comes due… until the US car industry makes dreaming through design a top priority, it doesnt have a chance…

    Ajw

    Reply
  12. GM Hummer, now that was a great product idea.

    America needs to go 100% electric.

    Obama needs the courage to support real innovation, not the corrupt financial services industry.

    Reply
  13. Ha ha, some auto industry guy crying on the internet because they are not getting bailed out while walls street is.

    Perhaps you should not have voted for the likes of Bush, Cheney, Clinton, Bush, Regan, Dodd, Frank, .. on and on…

    Reply
  14. The American consumer is equally complicit in the demise of the Big 3. Detroit was merely making the gas guzzlers that the American consumer demanded. Fortunately, with the recent decline in gasoline prices, I was able to sell our Ford Escape (20 mpg)and am now driving a Hyundai Elantra (34 mpg and rated #1 in it’s class by Consumer Reports).

    Reply
  15. Oblama just pulled a Reagan. ( think air traffic controllers)Let’s see if it works.

    Reply
  16. Hyundai will buy out part of GMs dealer network to distribute thier cars in the USA.

    Hyundai makes great cars, fantastic interior quality, great engines, ..

    Silicon Valley is the only hope for the American car industry.

    Silicon Valley is the only place left in America with any basic brain power and properly educated working class to innovate.

    Reply
  17. have you looked at the fiat 500? they are going to own the pocket rocket market with the instant distribution channel of chrysler.

    detroit is a failure of management, pure and simple.

    Reply
  18. Roger, agreed – this is pretty disturbing stuff. Um, last time I checked, the gummint wasn’t all that great at managing money, but what the heck? Maybe if they throw a few more billion at GM, we the people will own the company and we’ll all get free cars! Come to think of it, they might not be worth the money.

    Reply

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The Government Isn’t Running GM?

It looks like the government is forcing Rick Waggoner out and playing a big role in the Fiat deal with Chrysler.

So is the administration playing the role of Board Chairman with GM and investment banker with Chrysler?

I certainly do not have the answers here, not by any stretch, but hasn’t Fritz Henderson been part of the senior leadership at GM during all of this and I seem to remember Fiat making very unreliable cars.

I must be missing something.

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