I wanna see were you guys go with this.

[Mr1der]

http://www.politico.com/news/s....html

I think this might well be my first time even VIEWING the politics forum...

I don't think he's got any buisness demanding a CEO to step down however.

[Cold_Zero]

Why is GM any different from any of the other Financial companies that took bailout money? If you are going to ask Rick Wagoner to step down, why not all the CEO's of the Financial institutions as well?

[themadscientist]

I would have said "If your treasury secretary resigns too".

[dusred]

He has no business meddling with business in the private sector.

Any businesses who accepted bailout money can expect it though. They should have never accepted any bailout money. They are now married to the Govt.

[HashiriyaS14]

Well, technically, he CAN ask him to step down, as the amount of bailout money in what otherwise would be an effectively bankrupt firm makes the US Government the de facto majority investor.

So, actually, the Government, and thus POTUS, can pretty much demand anything they want.

Doesn't mean I like it, but I also wish we weren't in this situation in the first place. I supported Wagoner leaving years ago though, so this doesn't upset me.

[marlin29311]

Bob Lutz FTW. LOL

Not really sure how I feel - in one hand, GM could have just went Chapter 11 and re-did everything (im making this super simple, i know). The other hand, they take bailout money and have to try to fix the problem. While I'm not a huge fan of Wagoner myself, he certianly isn't the root of the problem in this situation and I feel Barry has no right to "ask" him to leave. There are many more individuals that are responsible for what is happening at GM than just him, and I feel it's a slap in the face, considering that he's trying to fix stuff now.

[smockers83]

You guys can't have it both ways.

Remember when the Big 3 were in DC making their case for the loans? Many people, including ones here, were calling for a change in leadership and management. The government became a big time investor in GM and Chrysler and the government has to feel confident enough to put forth further money, just as any other investor would. If Warren Buffet showed up instead to loan/invest money to/in these two companies, he would be looking for confidence in their viability in order to make his investment worthwhile, and he'd probably, in effect, make the same sort of calls if he were to put forth the amount of money the government is looking to put forth.

[smockers83]

As for the Wall St. CEOs, 95% are gone, they just weren't forced out by the government.

http://www.marketwatch.com/new...B4152}

*Edit, for whatever reason my link doesn't work, so here are bits and pieces of the story.

Rick Wagoner is out as chief executive of General Motors Corp. at the urging of the government, so why haven't Wall Street bankers been shown the door?

Of the nation's biggest and most troubled brokerages and banks, only one CEO, Ken Lewis at Bank of America Corp. , holds the same position he did two years ago. He survives, but is far from safe. Lewis is under fire for his handling of the Merrill Lynch acquisition and other mistakes. He has a 50-50 chance of surviving the year.

Three CEOs run companies that arguably could have survived the financial crisis without government help: J.P. Morgan Chase & Co.'s Jamie Dimon, Goldman Sachs Group Inc.'s Lloyd Blankfein and John Mack at Morgan Stanley.

Blankfein and Mack stabilized their companies with infusions of private cash. Dimon is relatively protected having acquired two troubled institutions, Bear Stearns and Washington Mutual, and led his bank relatively safely through the gauntlet of the credit crisis.

[HashiriyaS14]

Lloyd Blankfein is a genius, and Goldman wasn't on the hook for too many bad assets in the first place due in large part to his management.

[telcoman]

[QUOTE=Mr1der

I don't think he's got any buisness demanding a CEO to step down however.[/QUOTE]

I certainly think he does!

------------------------------------------------------------------------------------

"Obama and his aides may have honed in on Wagoner for two reasons. First, his company is asking for the most in total federal aid: $26 billion, a figure administration officials fear could grow even larger. Second, the GM chief was tied more directly to the ill-fated decisions that that brought much of the American auto industry to the brink of collapse. Wagoner joined GM in 1977, has had a senior role in GM management since 1992, and became CEO of the company in 2000. He is considered responsible for increasing GM's focus on trucks and SUVs—at the expense of the hybrids and fuel efficient cars that have become more popular in the last couple of years."

------------------------------------------------------------------------------------------

And after he gets done with the auto industry there are a number of overpaid health care executives that should be fired also.

Telcoman


Modified by telcoman at 3:45 PM 3/30/2009

[nissangirl74]

I don't think he's got any buisness demanding a CEO to step down however.

The only way the auto industry bailout can be salvaged is if the right people are in the right positions to make the right decisions. That's just a fact, no matter how you look at it and regardless if the restructuring money comes from the government or the private sector. The fact that the auto industry had no one else to turn to except for the government for help, is a clear indicator of the total demise of a once great empire. I don't wish unemployment on anyone right now, not even Wagoner because let's be realistic, who the hell is ever gonna hire the man? His reputation is destroyed. However, he is a victim of his own creation. He never should have been CEO and I'm sure, given his intelligence in other areas, he knew this. Maybe that's why he didn't put up much of a fight when he was called to resign.

[justclay]

Everyone keeps suggesting that GM (and other companies) had no other option than to take money from the government. Sure they did. They could go under, just like any smaller business, and large businesses in the past have gone under. It wouldn't be the end of the world. If these companies are getting bailed out, where is my bailout? Why don't I get a nice handout? It's a lopsided plan that favors big companies.

If GM or any other of the big three goes under someone else will step up and fill their shoes. We will all need cars, and so another company will move in to take their place. Thousands will be unemployed, sure, but unfortunately, this is the cost of a free market. We win some, we lose some. The workers that would be displaced through the collapse of such a company would have the necessary skill set (and union protection) to get into work with the infant company that will spring up in their place. Factories, suppliers, and other facilities are still intact, so the necessary infrastructure is there, someone will just need to step up and fill the shoes.

I do not understand why President Obama feels it is his responsibility to keep these companies afloat. Let them sink, focus that money on other necessary things, such as decreasing the GOVERNMENT national deficit. Instead, with his proposed spending and this economic "bailout", he is just putting a band-aid on a deep gash, and in four years he will increase the national deficit more than ANY of the other presidents COMBINED! He is giving asprin to the economy, when it really needs brain surgery.

[smockers83]

No, there is no guarantee that if GM goes under, magically some company appears to take it's place. That's not true at all. If a car is a car is a car and they are produced by several firms, if one firm goes under, then the supply of cars is now less. This provides for some competition between the remaining firms to capture that lost supply in the form of increased production and profits.

Now, that example doesn't factor in the economic situation we're in. The demand for cars has decreased dramatically at record levels. When there's a cut in demand, there has to be a cut in supply to equal the cut in demand to bring the market back to equilibrium. If GM falls, this will be your cut in supply to equal demand.

There are several reasons why GM can't be allowed to fail. For one, it has national defense interest, and that's probably the biggest reason. Secondly, it has an immense amount of information and technology that if it were allowed to fail, much of it would be lost. Thirdly, allowing GM to fail would be, in one word, a disaster for the country, not just Michigan and the Midwest. Unemployment is already high, over 10% in Michigan. We would see 10%+ nationwide, something that does not need to be seen in these times.

Also, if GM fails, the workers there would not be in the union as they no longer have jobs. If GM fails however, I think that would be the beginning of the end of the UAW.

As for your bailout, it's coming to you as a tax decrease.

[justclay]

Fair enough. I like what you have to say.

No, there is no guarantee that if GM goes under, magically some company appears to take it's place. That's not true at all. If a car is a car is a car and they are produced by several firms, if one firm goes under, then the supply of cars is now less. This provides for some competition between the remaining firms to capture that lost supply in the form of increased production and profits.

Right, there is no guarantee that if GM goes under someone else will immediately appear to take it's place. However, the second half of your argument is exactly what I meant: simply that someone will fill the void. And if those companies cannot produce enough quality products (i.e. cars), then other, smaller companies will have the opportunity to capitalize on the opportunity. The other thing to keep in mind, too, is that GM is the parent company of many other car companies (Chevrolet, Saturn, Opel). I would be curious (morbidly) to see if these other smaller companies would fall with their parent, or if they'd have the necessary leadership and infrastructure to survive.

Now, that example doesn't factor in the economic situation we're in. The demand for cars has decreased dramatically at record levels. When there's a cut in demand, there has to be a cut in supply to equal the cut in demand to bring the market back to equilibrium. If GM falls, this will be your cut in supply to equal demand.

Has the demand for cars subsided, or the demand for certain types of cars subsided? Further, has the demand really subsided, or has the ability for customers to afford the product demanded diminished due to unforeseen circumstances (in other words, is this a lasting effect on the auto industry?)? And your last statement is completely true: if the demand is lower, then we cannot afford to have so much production and labor attributed to the industry. Whether it be GM, AIG, or any other flailing company right now, we cannot throw good money after bad, and buy up companies that provide products and services we do not need.

There are several reasons why GM can't be allowed to fail. For one, it has national defense interest, and that's probably the biggest reason. Secondly, it has an immense amount of information and technology that if it were allowed to fail, much of it would be lost. Thirdly, allowing GM to fail would be, in one word, a disaster for the country, not just Michigan and the Midwest. Unemployment is already high, over 10% in Michigan. We would see 10%+ nationwide, something that does not need to be seen in these times.

The defense contracts make sense, it would certainly impact the military. However, same as with the civilian market, if there is a need, someone else would be awarded the contract. General Electric and International (along with a few others) also provide motors and engines for the MRAP, Advanced Up-Armoured HMWV (Hummer), as well as the Blackhawk, Chinook, Apache and UH-58, among others. For their information technology, I am sure that the majority of what they know, is known by other firms that make the same product. No doubt that if GM fails, it WOULD create a disaster for the country. But I have two thoughts on that. One, we would recover, we are pretty resilient, and two, such is life in a capitalistic society. Sounds cold, I know, but at some point we have to accept that our way of life has consequences, and we must be prepared to live with them, regardless of how much they might totally suck.

Also, if GM fails, the workers there would not be in the union as they no longer have jobs. If GM fails however, I think that would be the beginning of the end of the UAW.

As for your bailout, it's coming to you as a tax decrease.

You're totally right on the union. I'd be interested, again morbidly, to see if GM really has that kind of strangle hold on the UAW. And as for my "bailout", fair enough. But what about Mom and Pop, who's hardware store is going under as a direct result of the economy? Where is THEIR bailout, they won't see the first penny from that 700 Billion dollars.

[smockers83]

if those companies cannot produce enough quality products (i.e. cars), then other, smaller companies will have the opportunity to capitalize on the opportunity. The other thing to keep in mind, too, is that GM is the parent company of many other car companies (Chevrolet, Saturn, Opel). I would be curious (morbidly) to see if these other smaller companies would fall with their parent, or if they'd have the necessary leadership and infrastructure to survive.

Yes, you're right as well. Smaller car companies are already springing up. You have Tesla and this other car company that I saw being interviewed yesterday but didn't catch the name. GM is the parent company of all those and it is expected that, regardless of what happens except for failure, GM will be half the size it is now. Brands will be sold or discontinued.

Has the demand for cars subsided, or the demand for certain types of cars subsided? Further, has the demand really subsided, or has the ability for customers to afford the product demanded diminished due to unforeseen circumstances (in other words, is this a lasting effect on the auto industry?)?

Yes, demand has decreased in the US. Every car company has seen sales slide by 30% or more. Only until recently has demand for durable goods increased, which may mean demand may be returning. Whether the customer can afford it or not, demand has declined. If a customer can't afford it, they won't demand it. That doesn't mean they don't want it though.

There are two things happening at the same time that are affecting demand for cars. First is the illiquid credit markets. Lending agencies were very wary of any risk in the past 6 months, making credit markets very hard to get into. On the banks and credit union side, the thing that brings down the ability to lend is deposit flows. If deposits are flowing out, the bank has no money to lend. However if deposits flow in or remain stable, the bank has money to lend. These capital infusions the government has performed doesn't necessarily help spur lending. It has been argued that it in fact does the opposite.

Secondly, the nation has turned itself upside down and started saving again. This takes money that had previously been spent in the economy on a normal basis out. However, in the long run, this ultimately increases the spending.

For their information technology, I am sure that the majority of what they know, is known by other firms that make the same product. No doubt that if GM fails, it WOULD create a disaster for the country. But I have two thoughts on that. One, we would recover, we are pretty resilient, and two, such is life in a capitalistic society. Sounds cold, I know, but at some point we have to accept that our way of life has consequences, and we must be prepared to live with them, regardless of how much they might totally suck.

Not necessarily just for the IT knowledge, but the goodwill of the company as a whole. If GM fails and GE wins a contract to build a V12 gasoline engine for the government, it's going to take them time to figure out to build that engine because they don't build a V12 engine every day, they do the jet engines and very large diesel engines. There's the engineering aspects and production aspects and how it's all tied together.

As for capitalism, I totally agree.

You're totally right on the union. I'd be interested, again morbidly, to see if GM really has that kind of strangle hold on the UAW. And as for my "bailout", fair enough. But what about Mom and Pop, who's hardware store is going under as a direct result of the economy? Where is THEIR bailout, they won't see the first penny from that 700 Billion dollars.

Personally I'd like to see the UAW go or at least have much of its power stripped from it. Mom and Pop should supposedly get their bailout, too, if Obama holds out on his promise. Remember what he said about people and business owners who make under $250 grand? You're getting a tax cut. Large firms aren't getting that tax cut and they are on a much grander scale than a small hardware store. I would find it interesting to see what the proportions are in terms of money lent to firms and how much a tax decrease for business owners are versus revenues and profits.

[marlin29311]

There are several reasons why GM can't be allowed to fail. For one, it has national defense interest, and that's probably the biggest reason. Secondly, it has an immense amount of information and technology that if it were allowed to fail, much of it would be lost. Thirdly, allowing GM to fail would be, in one word, a disaster for the country, not just Michigan and the Midwest. Unemployment is already high, over 10% in Michigan. We would see 10%+ nationwide, something that does not need to be seen in these times.

What national defense interest?

[justclay]

I think we're of similar mind

It's funny you mention Tesla, because I was going to mention them in my reply, but didn't for two reasons. One, as of right now, they're only product is a one-gear electric version of the Lotus Elise. It's a wicked cool car, but it's way overpriced, AND it is a sports car. People aren't looking for a sports car right now. And second, their technology is revolutionary, but still in it's infancy, I am not sure how fast it will catch on.

Interesting conversation! I'm glad I poked my head in here.

[justclay]

GM (as well as several other companies) have Department of Defense contracts to develop and manufacture parts and vehicles for the Military and other government applications.

[smockers83]

The S sedan or whatever is going into production for $50,000.

Glad you stopped by, too. Take your coat off, stay awhile.

[marlin29311]

GM (as well as several other companies) have Department of Defense contracts to develop and manufacture parts and vehicles for the Military and other government applications.

Last I heard GM had sold off anything they had to do with the military when they sold of their defense subsidiary to General Dynamics back in 2003...

[smockers83]

What about the president's new limo? It's a Cadillac.

[marlin29311]

What about the president's new limo? It's a Cadillac.

Thats different than making and supplying tanks, humvees, and other troop transport type vehicles...not to mention GM did not do the designing of the ballistic protection on the limo...

[pdubzx]

Sadly, this is just the start.

[dusred]

Sadly, this is just the start.

^ Welcome?

[DJ Raijin]

As the major investors in said companies, if the government decides they want fresh management in control, then they are in their right to do so.

If I buy up the larger majority of stocks in a company and decide that I want the CEO gone because he wears a brown belt with black shoes, then as owner, I can do that. This is simple business. Sure I have to vote against the others, but if someone else has a bone to pick with this guy, they're going to side with me.

As for how this guy is going to survive, he'll have to sell a couple condos and a couple cars and learn to budget his money better and live within his means like us poor folk.

[justclay]

To the best of my knowledge, the government is NOT the majority shareholder, and therefore they can request that change be implemented, but it is up to the company to comply or not.

Personally, I think that the government has no business dabbling in the affairs of a private company. "President" Obama has gone on a power spree, and he has only been in office less than 75 days. We're in for a long 4 years.

[smockers83]

GM's market cap is only $1.16 billion with a value of $33 billion.

[Urabus GodofTraction]

To the best of my knowledge, the government is NOT the majority shareholder, and therefore they can request that change be implemented, but it is up to the company to comply or not.

Personally, I think that the government has no business dabbling in the affairs of a private company. "President" Obama has gone on a power spree, and he has only been in office less than 75 days. We're in for a long 4 years.

The government didn't buy stock in GM. They gave them a loan. Don't be fooled.

[justclay]

The government didn't buy stock in GM. They gave them a loan. Don't be fooled.

I understand that. But that is exactly what I don't like to see. They're throwing good money after bad. And on top of that, if the government is giving them a loan, our "president" has no business asking the CEO to resign. It'd be like me getting a loan from my local bank, and the bank president asking me to resign. It's wrong, and should not, under any circumstance, happen in a capitalistic society.

I'm not much for politics, but this is a fun thread.

[Urabus GodofTraction]

I understand that. But that is exactly what I don't like to see. They're throwing good money after bad. And on top of that, if the government is giving them a loan, our "president" has no business asking the CEO to resign. It'd be like me getting a loan from my local bank, and the bank president asking me to resign. It's wrong, and should not, under any circumstance, happen in a capitalistic society.

I'm not much for politics, but this is a fun thread.

"majority shareholder" implies stock. Sorry, you confused me.

I'm torn. On one hand, to get a loan, the bank's loan officer CAN make you do things you don't want to do on condition of getting the loan.

However, it's the government, so...