Government forcing GM board out?

posted at 8:49 am on April 1, 2009 by Ed Morrissey

Earlier this week, Barack Obama said that he was sure that the federal government wouldn’t run GM, but two news stories make that statement look, well, expired indeed.  The Washington Post reports on a more substantial intervention at GM that portends a galloping shift towards corporatism:

The Obama administration will play a key role in reshaping General Motors’ board of directors over the next six months, potentially giving it even greater control in the management of the storied American manufacturer.

The president’s auto task force plans to consult with the company as it replaces a majority of its board, a White House official said. The board today largely consists of the current and former chiefs of major U.S. corporations such as Coca-Cola, Ernst & Young, Pfizer and Eastman Kodak. It is not known which of the 12 board members will leave.

The president said Monday that “the United States government has no interest in running GM.” But in practice it is already exerting tremendous influence over it, a situation that has triggered fierce debate over how much power the government should wield over the companies that it aids.

Kent Kresa, 71, GM’s new chairman, said yesterday that company officials will seek to replace a majority on the board by August, as the automaker moves to restructure operations.

And in what looks like an April Fool’s joke at Car & Driver, NASCAR fans may find their options more limited, thanks to a presidential intervention that will force both GM and Chrysler out of competition.  It’s too costly to have Government Motors involved in a sport that attracts millions of fans, you see:

In a move sure to spark outrage, the White House announced today that GM and Chrysler must cease participation in NASCAR at the end of the 2009 season if they hope to receive any additional financial aid from the government. Companies around the globe—Honda and Audi, to name two—have drawn down racing operations, and NASCAR itself has already felt the pinch in the form of reduced team spending. A complete withdrawal from America’s premier racing series is expected to save more than $250 million between GM and Chrysler, a substantial amount considering the drastic measures being implemented elsewhere.

“Automakers used to operate on the principle of ‘win on Sunday, sell on Monday,’ but the Auto Task Force’s research just doesn’t validate that as true,” said the statement from President Obama. While fans have decried the Car of Tomorrow for heavily limiting what little personalization the cookie-cutter series had previously allowed to participating manufacturers, and drivers have slammed its brick-like aerodynamics and unpredictable handling, even the governmental oversight committee sees that the full-scale regulation of the cars leaves the manufacturers very little space for research and development. “NASCAR is a racing series that regulates down to the smallest detail of the cars, where a car badged a Chevrolet or Dodge differs only marginally from a Ford or a Toyota. There’s no technological development to speak of.”

The statement goes on further to say the same demand will be made of Ford if it asks for government assistance. “In order to receive this money, corporations must demonstrate they will spend it wisely. Racing has been said to improve on-road technology, but frankly, NASCAR almost flaunts its standing among the lowest-tech forms of motorsport. NASCAR is not proven to drive advancements that transfer from the racetrack to the road, and this nation’s way forward does not hinge on decades-old technology. We need new, and we need innovation.”

To be honest, I’m not sure whether this is an April Fool’s joke by Car & Driver or not.  It certainly sounds like one, but then again, so did the notion that the President could fire GM’s CEO.  I’ve looked around for a news report independent of C&D and have yet to find one.

Let’s just say for the moment that this is on the level, as hard as that is to imagine.  It may not be a bad business move, for some of the reasons C&D mentions.  NASCAR costs a lot of money, and the tightly regulated environment doesn’t make for great R&D.  However, NASCAR is really a form of advertising, not research.  Does this mean that Obama will start approving and rejecting other forms of advertising?  Will TV ads be deemed too expensive?  No more Super Bowl spots for GM and Chrysler?

Yeah, it’s probably a gag, but in fact Obama could make that demand and get it.  Think AIG bonus outrage … and imagine what will happen when a similar amount of taxpayer money gets spent on NASCAR.

Back to the board reshuffle.  Kresa was the man who fired Rick Wagoner as CEO without checking with the rest of the board.  It’s pretty clear that the other members have more or less become window dressing.  Kresa stopped taking direction from them and has been obedient to his new master in the Oval Office.  With that made clear this week, how much will replacing the board change things at GM?

Again, one can make perfectly good business arguments for replacing the board, just as with a decision to pull out of NASCAR.  The current board hasn’t succeeded in turning around GM.  Replacing them will bring in fresh voices and fresh perspectives.  But the impetus for those moves should be from the company’s stockholders, not from the federal government — because the federal government should not have taken a stake in a private company in the first place.

How many CEOs will wind up on this board?  How many labor activists will take the place of the current board members?  I’d say less of the former and more of the latter.

Welcome to Government Motors.

Update: I’ve edited this post after noting that neither NASCAR.com nor ESPN have reports on the supposed Obama order.  It looks like a joke by C&D, and my initial skepticism was correct..


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Neil Cavuto on Imus in the Morning, this morning, we should be following the Swedish Model:)

Neil Cavuto SAABing to Imus.

http://youhavetobethistalltogoonthisride.blogspot.com/2009/04/neil-cavuto-saabing-to-imus.html

Dr Evil on April 1, 2009 at 9:58 AM

you might want to look up Olberman and (D) Senator Kucinich’s hunt for Dick Cheney’s assassination team

April Fool, indeed. Kucinich is a Representative, not a Senator. One clown (Franken) in the Senate is enough, if he manages to steal the seat.

But we shouldn’t put Sarah Palin’s photo up there. The joke is not on her.

Steve Z on April 1, 2009 at 9:59 AM

Obama’s best friend Kawammi, the disgraced Major of detroit is fresh out of jail and likes cadalacs. He doesn’t need relo dollars. What about Ayers for a spiritual advisor for the board?

seven on April 1, 2009 at 10:01 AM

Ed,

Should’ve put a pic of Jeff Foxworthy there…or something from the movie “CARS”…or “Larry The Cable Guy”. If that is true, which I don’t think it is, the other extra way to tick off the troops is to mess with the USAF fly-bys.

I dare Him to mess with the Harley dudes; as in no more bike rallies, then Jay Leno is gonna be his worst nightmare! Mr. Fonda always comes to Erie in the annual rally. I expect lots of them @ the Erie Tea Party (if you live as far back as Buffalo NY, or Mentor OH and in surrounding areas please come!!!

Ed, BTW you promised more baby pics from your family, when that thread will be created??

ProudPalinFan on April 1, 2009 at 10:02 AM

Which part of restructuring do cons not understand?

Did you listen to the President?

getalife on April 1, 2009 at 9:57 AM

We are listening to the President,and watching him do the exact opposite of what he says he is going to do on a regular basis.

If liberals like yourself did not have your heads inserted so firmly up Obama’s a$$,we would not have to explain that to you.

Baxter Greene on April 1, 2009 at 10:02 AM

Well, since they want to intervene in everything, and if they were to intervene into NASCAR I’d at least wish they would get that damn car of tommorrow off of the short tracks, its ruining Bristol.

LevStrauss on April 1, 2009 at 9:57 AM

OH I GOT IT!!! BRISTOL! Damn I am slow!

ProudPalinFan on April 1, 2009 at 10:03 AM

April Fool, indeed. Kucinich is a Representative, not a Senator.
Steve Z on April 1, 2009 at 9:59 AM

Hard to keep up with all the clowns sometimes,Thanks for the heads up.

Baxter Greene on April 1, 2009 at 10:06 AM

The fact about the board getting replaced was reported when Mr. Wagoner resigned but the media blow over that fact. I knew that would not last once the facts of how and who would replace them started to become know.

JeffinSac on April 1, 2009 at 10:06 AM

NASCAR almost flaunts its standing among the lowest-tech forms of motorsport

Yep, in car real time video camera, and real time telemetry from almost every component of the race car is as low tech as one can get without reverting to hourse and buggy whips. (sound it out, itsa pun, not a typo)

Skandia Recluse on April 1, 2009 at 10:10 AM

oh and by the way. I will buy a ford not a GM nor a chrysler. they are dead to me. If ford takes money from uncle sam I will by a forgeign car. I am done with this bailout crap.

unseen on April 1, 2009 at 9:02 AM

I bought a Dodge Charger last year and got a Friday car – one put together so fast on Friday, when the workers were in an all fire hurry to get out the door for a beer, that it’s a big ‘ol piece of $h!t.
Last week, after some blonde twit decided to make a right turn from the left lane and ran my daughter into a tree totaling out her car, my husband and I went car shopping for a new car so we could give his 9 year old car to our daughter. Ford got our business. It was an easy choice. They didn’t take the bailout money, it’s American made, and they had the best deals on great cars. It didn’t hurt that they also made the car buying process the easiest ever. My husband drive a beautiful Torch Red Mustang and I’ll be watching the mail for the speeding tickets.
Top all that with spending silly Earth hour at the dealership for a Mustang car show…some real classics sitting under a bunch of bright lights. ’65 – 2010 and Model T’s…it was a great night, something like 200 cars.

mauioriginal on April 1, 2009 at 10:22 AM

Its the Europeanization of our American Companies. Obama will give anywhere from 1-3 seats to Labor. At least one will be a UAW executive, if not Gettlefinger himself. In Europe, the unions have a seat on the Board, employees have seat on the board. The word “Stakeholders” is the common word to refer to Company “owners”, the ‘American’ term Shareholders is frowned upon in Europe as it does not represent the interests of anyone.

Would it be too much to hope that with Obama’s apparent love of all things European that when this term is over and loses in a landslide that he’ll move to London or Paris, or anyplace that will take he and MO?

mngirl on April 1, 2009 at 10:26 AM

Ogabe stole the company for the UAW…

sven10077 on April 1, 2009 at 9:52 AM

Then why is Obama, unlike Wagoner, pushing for bankruptcy? The bankruptcy will void the UAW contract. The eventual bankruptcy will likely be pre-packaged, but right now there is more pressure on the UAW than there was a month ago.

dedalus on April 1, 2009 at 10:26 AM

GM never should have killed the electric car. They would be sitting pretty right now if they had just built off it. Personally, I’m waiting for the Tesla Motors sedan to come down in price just a little bit and with the $7500 government rebate, I’m gettin’ me one in 2011 or 12. If I’m gonna spend 40 grand on an electric car, I might as well get one that gets 300 miles per charge instead of 50 MPC like that stupid Volt GM is producing.

Mr_Magoo on April 1, 2009 at 10:27 AM

Which part of restructuring do cons not understand?

Which part of UNCONSTITUTIONAL do liberals not understand?

Did you listen to the President?

Yes, I’ve listened to that liar. I have a list for my liberal relatives with dozens of lies that he’s told (and then totally reversed himself on).

getalife on April 1, 2009 at 9:57 AM

I wish you would… maybe then you’d realize that your idol has no experience.

dominigan on April 1, 2009 at 10:33 AM

Obama Orders Chevrolet and Dodge Out Of NASCAR – Car News

HAPPY APRIL FOOLS’ DAY! With their racing budgets deemed “unnecessary expenditures,” GM and Chrysler are ordered to cease racing operations at the end of the season.

BY JARED GALL, ILLUSTRATION BY ERIC WOODWARD
April 2009

yo on April 1, 2009 at 10:38 AM

So we have Uncle Sugar coming up with a plan to restaff. The Barry HR system ought to take about six months to get the applications printed. In the meantime the GM board all know they are short-timers. So how well do short-timers perform their jobs? Any guesses? Anyone seen those Corona commercials shot on a beach?

Watch for GM bumpers laying on the highways as quality control heads for hell.

Limerick on April 1, 2009 at 10:39 AM

Then why is Obama, unlike Wagoner, pushing for bankruptcy? The bankruptcy will void the UAW contract. The eventual bankruptcy will likely be pre-packaged, but right now there is more pressure on the UAW than there was a month ago.

dedalus on April 1, 2009 at 10:26 AM

Ogabe is allowing the UAW to do a bump and run….even the UAW knows it can’t kick the can for its too generous bennies down the road anymore by destroying management, going bankrupt, and then “advising” the stockholders to allow the UAW to start the cycle again the UAW gets everything it wants.

1) a way to screw the retirees while avoiding blame

2) a CEO and board more to their liking

3) new too generous contracts

I will die before I ever buy another Government Motors POV….

sven10077 on April 1, 2009 at 10:44 AM

OK, let’s compromise. Spend the same amount of tax payer money on NASCAR as we do on ACORN.

Harpoon on April 1, 2009 at 10:52 AM

another boring as shit ed post.

tell me something i don’t already know, ed.

Seven Seas on April 1, 2009 at 10:54 AM

sven10077 on April 1, 2009 at 10:44 AM

If they go into bankruptcy, they won’t be able to emerge w/o a new contract that puts GM on a par with the deals that foreign companies have with US workers. If the new deal makes GM cars more expensive than Honda or Toyota to manufacture, Obama will look dumb and investors are going to dump all over the new company.

dedalus on April 1, 2009 at 10:55 AM

If they go into bankruptcy, they won’t be able to emerge w/o a new contract that puts GM on a par with the deals that foreign companies have with US workers. If the new deal makes GM cars more expensive than Honda or Toyota to manufacture, Obama will look dumb and investors are going to dump all over the new company.

dedalus on April 1, 2009 at 10:55 AM

I agree wholeheartedly it is why I am saying it is theft…

it is not *saving* anything and Ogabe will not buck the UAW and do anything “smart” like forcing them to lower production costs through controlling the UAW…

sven10077 on April 1, 2009 at 10:58 AM

Could Obama at least make sure the Board Members he will appoint have no tax issues. Just a thought.

eaglewingz08 on April 1, 2009 at 11:07 AM

Yep, in car real time video camera, and real time telemetry from almost every component of the race car is as low tech as one can get without reverting to hourse and buggy whips. (sound it out, itsa pun, not a typo)

Skandia Recluse on April 1, 2009 at 10:10 AM

The town I grew up in is just a few hours from Bristol, so that should establish my street cred. I had an argument with my cousin over the past holidays about fuel injection vs carburetion. His point was that carburetion is still superior to fuel injection due to it’s use in nascar, while I defended fuel injection. Carbs are ancient tech, but when you have the knowledge and hardware to tune a carb for daily atmospheric conditions do you really need FI? Nascar is old tech, but it is old tech refined to the Nth degree.

DFCtomm on April 1, 2009 at 11:13 AM

Nascar is old tech, but it is old tech refined to the Nth degree.

DFCtomm on April 1, 2009 at 11:13 AM

Functional old tech is often superior to “new and improved”…

I’d rather have a rifle made in the 50s than the same model made in the 90s…

sven10077 on April 1, 2009 at 11:16 AM

There is an old adage that says, “What’s good for GM is good for America.” Now that America owns GM the statement has a very different meaning.

hicsuget on April 1, 2009 at 11:17 AM

‘Ol Blue Lips has proven himself to be a liar. What else needs to be said?

Mr. Grump on April 1, 2009 at 11:21 AM

Functional old tech is often superior to “new and improved”…

I’d rather have a rifle made in the 50s than the same model made in the 90s…

sven10077 on April 1, 2009 at 11:16 AM

I still love me some fuel injection, mostly because the quadrajet drove me up the friggin wall. tuning carbs, or at least the quadrajet seems to be almost equal parts tech and art.

DFCtomm on April 1, 2009 at 11:24 AM

Earlier this week, Barack Obama said

..bla,bla,screw America,.bla,bla,bla,bla,bla, Socialism is the way,bla,bla,bla,bla Screw America,.bla,bla,um,uhm,bla

christene on April 1, 2009 at 11:27 AM

.
.
.
.
GOV PALIN 2012!!!!

christene on April 1, 2009 at 11:28 AM

“Automakers used to operate on the principle of ‘win on Sunday, sell on Monday,’ but the Auto Task Force’s research just doesn’t validate that as true,” said the statement from President Obama. While fans have decried the Car of Tomorrow for heavily limiting what little personalization the cookie-cutter series had previously allowed to participating manufacturers, and drivers have slammed its brick-like aerodynamics and unpredictable handling, even the governmental oversight committee sees that the full-scale regulation of the cars leaves the manufacturers very little space for research and development. “NASCAR is a racing series that regulates down to the smallest detail of the cars, where a car badged a Chevrolet or Dodge differs only marginally from a Ford or a Toyota. There’s no technological development to speak of.”

NASCAR, either change the rules or die as a sport. It’s that simple.

HotAirJosef on April 1, 2009 at 12:06 PM

Oh and G*d bless the Palin family :-).
G*d damn the Chris Matthews mail-order family.

HotAirJosef on April 1, 2009 at 12:07 PM

Check the article again — they musta got a LOT of angry emails:

HAPPY APRIL FOOLS’ DAY! THIS IS A JOKE. LIGHTEN UP, PEOPLE.

Paul_in_NJ on April 1, 2009 at 12:09 PM

To be honest, I’m not sure whether this is an April Fool’s joke by Car & Driver or not. It certainly sounds like one, but then again, so did the notion that the President could fire GM’s CEO. I’ve looked around for a news report independent of C&D and have yet to find one.

Yeah, the folks at Car & Driver are laughing right now but somewhere in the White House, the filthy liar’s people are saying….”you know what might be a good idea….”

highhopes on April 1, 2009 at 12:16 PM

Meanwhile, we all sit here on our spotty behinds doing nothing.
Adams, Jefferson, Washington et al would be so proud.

SKYFOX on April 1, 2009 at 12:16 PM

Ed, did I miss where y’all decided to post gratuitous and unrelated pictures of Governor Palin on every April 1st blog? You wouldn’t be calling “Sarah Barracuda” and April Fool, would you?

cackcon on April 1, 2009 at 12:22 PM

BHO, who has never run anything in his life, is now running the federal government and several Fortune 500 companies into the ground!

jgapinoy on April 1, 2009 at 8:59 AM

Messiah!!!

Mistake!!!

Muffler King!!!

hillbillyjim on April 1, 2009 at 12:49 PM

MarkTheGreat

Exactly!

Once GM has been totally “corrected” with a more “fair” representation of all stakeholders, Team Obama will then force the marketplace to favor GM products. (Kent Kresa’s futuer actions will be interesting – Mr. Kresa’s the former long-time CEO of Northrop, and seemed to do a great job of creating a more cost efficient, more competitive company that’s adimired as a great place to work.)

- Nationalized Healtcare can be demonstrated to be “necessary to our economic recovery” by shifting the expense from GM/Union to taxpayers. Also having the added benefit of “free” healthcare for all those happy Obama supporters. (We’ll all enjoy the same healthcare currently provided by the V.A., perhaps worse – see related headline today.)

- Card Check will eventually succeed, which will hamstring Toyota and other successful auto makers with the same productivity limits GM now has.

- Team Obama has already taken over Warranties, so GM doesn’t have to improve reliabilty and quality to cut the current cash drain of Warranty related repairs.

- Team Obama will declare victory before any results are achieved, and use GM’s take over as an example of why Treasury should be allowed to have the “expanded powers” recently requested.

- The “90% Bonus Tax” will come back somewhere around April 15, with popular support as the electorate becomes easily outraged while looking at their tax numbers.

- Rep. Conyers will launch an investigation into ACORN. Not only with there be no wrong-doing found, ACORN will be publicly heralded in by Congress, Obama, and the Press as providing crucial services to America’s communities – for weeks, perhaps months.

- Barney Frank will go for broader wage controls, including determining how performance is evaluated. This will affect industries beyond Financial Services and Automotive – because they actually benefit from bailout funds through direct and indirect business relationships with Bailout recipients (this is how Los Angeles has successfully expanded living wage and other regulations beyond companies bidding for government contracts).

And the dominoes will continue to fall. There’s more coming. Most of it will be in the first half of this year, because that will set the stage for how far the Lefties can go during the next 2 years. Remember, ACORN’s already been funded through Porkulus – the 2010 mid-terms are already being set.

We under estimate our opponents at our own, extreme peril.

Perfesser on April 1, 2009 at 12:51 PM

I’m sure the media will be very interested to see who Obama gives these new seats on the Board of Directors to. And of course they will cover how many of the new seats will be basically just political patronage for the Friends of Barack.

And they will publish hard-hitting news stories covering all the dirty details.

Can’t wait.

/s (of course)

tom on April 1, 2009 at 1:43 PM

More Palin pics!!!!!!!!! Wooooohoooo!!!

dec5 on April 1, 2009 at 4:45 PM

I often wondered how the German people felt during the rise of Hitler. Now I know.

darktood on April 1, 2009 at 11:58 PM

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