Not to put too fine a point on it, GM is doomed (probably, anyway) because the Obama-Pelosi administration has put them in a position in which the kind of bold leadership that could produce a turnaround is impossible. Though Barack Obama might declare that he is “not running GM,”
The President is so busy not running GM that he had time the night before to call and reassure Detroit Mayor Dave Bing about the new GM’s future location. GM is being courted to move its headquarters to nearby Warren, Michigan. And Mr. Bing told the Detroit News that he had received a call Sunday evening from the President “informing me of his support for GM to stay in the city of Detroit with its headquarters at the Renaissance [Center].” . . .
We don’t know whether GM should stay in Detroit. But we do know that the location of a company’s headquarters is one of those decisions typically not made by people who are busy not running the company.
This is exacerbated by the fact that, whether President Obama is interested in running GM or not, there are 535 members of Congress who are most certainly interested in micro-managing GM—since, after all, GM plants, dealerships, distribution centers, etc. now qualify as some of the pork they can bring home to, or at least keep in, their districts.
The latest self-appointed car czar is Massachusetts’s own Barney Frank, who intervened this week to save a GM distribution center in Norton, Mass. The warehouse, which employs some 90 people, was slated for closure by the end of the year under GM’s restructuring plan. But Mr. Frank put in a call to GM CEO Fritz Henderson and secured a new lease on life for the facility.
Mr. Frank’s spokesman, Harry Gural, says the Congressman discussed, among other things, “the facility’s value to GM.” We’d have thought that would be something that GM might have considered when it decided to close the Norton center, but then a call from one of the most powerful Members of Congress can certainly cause a ward of the state to reconsider what qualifies as “value.” A CEO who refuses the offer can soon find himself testifying under oath before Congress, or answering questions from the Government Accountability Office about his expense account. To that point, Mr. Henderson spent Wednesday with Chrysler President Jim Press being castigated by the Senate Commerce Committee for their plans to close 3,400 car dealerships. Every Senator wants dealerships closed in someone else’s state.
As Mr. Gural put it, Mr. Frank was “just doing what any other Congressman would do” in looking out for the interests of his constituents. And that’s the problem with industrial policy and government control of American business. In Washington, every Member of Congress now thinks he’s a czar who can call ol’ Fritz and tell him how to make cars.
Given Congress’ track record, and given the way leadership by committee normally works out, I don’t think it’s too much to predict that GM isn’t going to survive this.
Update: People are noticing, Mr. President . . . (HT: The Anchoress)
Republicans: give hundreds of billions of dollars in bailouts with no oversight or accountability whatsoever, and the companies being bailed out still fail.
Democrats: give hundreds of billions of dollars in bailouts with micromanaging and pseudo-accountability, and the companies being bailed out still fail.
Fire them both 🙂
Eh, for the first part, I wouldn't really say "Republicans"–the Republicans who led that effort (with the most recent President Bush at the head, no question) were opposed by a majority of their own party nationwide; that was truly a bipartisan effort on the Hill. But yeah, there are a lot of people in Washington with an (R) after their name who really ought to be swept out and replaced by real Republicans; unfortunately, they have their hands on the levers of power, which makes it hard to get rid of them.