President Obama, who holds the world's most powerful office, announced today that General Motors and Chrysler have not done enough to earn more government support. Rick Wagoner, GM's CEO, had already resigned under pressure from the Obama administration. The president held out the threat of bankruptcy if the corporations don't come up with plans the administration approves. Obama wants Chrysler to merge with Fiat, the Italian automaker (apparently on the theory that it will work out so much better than Chrysler's merger with Daimler Benz), and he wants GM to do ... something different.
Wall Street was so thrilled with the president's business expertise that the Dow dropped more than 300 points within a couple of hours. GM and Chrysler have made some dumb, short-sighted decisions in the past 40 years (back when the U.S. Justice Department was threatening to sue GM for anti-trust violations because it controlled over half the U.S. new-car market), but I'm not convinced that the president and his advisers know more about car manufacturing and marketing than the folks who've spent their adult lives working on cars.
Taxpayers have poured a ton of money into the automakers already, but it seems to be the height of hubris for administration officials, with all of two months on the job, to think they know more than GM and Chrysler officials. And if the president can tell GM to replace its CEO, what's to stop him from replacing the CEO of Bank of America or Microsoft? It looks like we're gathering speed on a slippery slope.
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