It's been made painfully clear now....multiple times by both the US govt, and General Motors, that the treasury dept. has no intentions of running General Motors. They are not going to be nationalized, and they are not going to become "Government Motors"...yes, the Government has more than 0% influence in the company, and I agree that's too much. But guess what? They borrowed from the Treasury...everything you're seeing and reading is part of making a "deal with the devil", so to speak. It's not unexpected...
They may not be running GM directly, however having a controlling stake in board elections means that whatever oversite committee that is set-up in this deal WILL control the future vision of GM.
A couple things I want to point out first, I figure this is as good a place as any;
They DID NOT fire Wagoner, they asked him to resign in return for more loans because they felt he was not moving fast enough. Though I made it clear that I didn't like this move, and we've all witnessed what Wagoner has done...he wasn't moving quick enough. And if the gov't was to loan out more money...they have decent ground to request the replacement of the guy spending their money.
Asking Wagoner to resign as a prerequisite to getting loans may not technically be firing him- but it's splitting hairs. Sure the Government had the right and ability to attach strings to loans though- as would any lender.
They ARE NOT dictating what cars are and are not being built. At
most, they're influencing INDUSTRY trends with laws and standards like CAFE and various saftey standards. That is the extend of any product manipulation. As an aside...are cars like the Volt, and Cruze so terribly bad? Anyways.....
I would agree that you are historically correct, however manipulating the board (which would be their right as majority holder) to people who would prefer Priuses to Tahoes is more likely than not to be the net outcome. Is this bad or not? I guess that depends on if you like Priuses or Tahoes.
I've read reports that state it was General Motor's idea to offer the gov't common stock as a form of loan repayment. This also means the US Treasury will have a member on the board of directers with the intent to protect a taxpayer investment. Lets look at those points....
First of all, it was GM's idea to offer the stock...why? Why make any offer? Why in the world would GM want to give the gov't any more influence?
To sweeten the deal. They want to appear attractive to the gov't to stave off any bankruptcy if possible. They want to put out a sign of good-will. And they want to force the gov't to have a hand in the pot...so as to insure their survival. At least that's why I'd be doing it...How is this attractive? GM stock is going to increase in value, that means the gov't will be able to sell that stock in a year or two, and make more money off the loans than they could have possibly made by a simple repayment. Unless I'm much mistaken, the gov't did this with Chrysler in the 70s, too. And lets be honest with ourselves, does anyone REALLY think that they won't sell the stock the minute it's worth more than they bought it? Even if this administration doesn't, you don't think the next will? Having stake in a company is pointless for a governing body unless there's money involved.
Energy policy is one of the most hotly debated issues in government today and an identity issue to the majority leadership of congress. Energy policy goes hand in hand with transportation. You can't predict whether the governing body will think it's pointless or not to hold on to one of the largest manufacturers of transportation devices in the world.
Second, the board member -- this should be an expected condition...This guy's interest in the company would soley be to make sure the company the gov't now has
temporary stake in...doesn't do anything stupid.
Sorry for the long post/rant...I'm just tired of all this fear-mongering. This is one big clusterf**k....we're in difficult times, and some weird things are going to happen. They're not being nationalized, the world isn't ending....relax, already all this doomsday rhetoric is giving me a headache.
