|
| |
OBAMA, GM: YOU BREAK IT, YOU OWN IT
By DICK MORRIS
Published on
TheHill.com on March 31, 2009
GM, now renamed Government Motors, has a new CEO: President Barack Obama.
By replacing the head of the company and demanding a restructuring of its board
in return for further TARP aid, Obama has taken upon himself the responsibility
for the future of the company. As Gen. Colin Powell said when Bush was
considering invading Iraq and toppling the Saddam Hussein government there: "If
you break it, you own it." Now it is Obama's company.
This move will backfire big time! The auto giant is very, very unlikely to be
saved by this current TARP infusion. Doubtless it will need more in the near
term. But the resentment now focused on the management of the company will then
turn to Obama. Having demanded a replacement of the management, it is he who
will be held responsible for the company's future.
And each time GM asks for more money, Obama will face a choice: take personal
responsibility for laying off 100,000 auto workers or anteing up the additional
cash. By inserting himself so deeply into the management of the company, Obama
makes himself central to its future. If Obama lets the company fail, having
already extended credit, he will have all of Michigan on his case. If he keeps
coming up with more and more tax money, he will earn the contempt of the voters.
Socialism has its price. By taking over the management of a company, you become
the determinant of its fate in the public's mind.
Obama does not seem to realize that government takeover is the beginning, not
the end, of the problem. He should have stuck with being president and left
making cars to others.
And, as the new CEO of General Motors, what will his policy be on corporate
compensation? Will the public tolerate his letting his new company pay salaries
sufficient to attract the talent necessary to salvaging the firm? Or will he
have to rely on a bunch of kids right out of school, willing to work for one or
two hundred thousand a year, for the company's salvation?
When it comes to the hard work of cutting retiree health benefits, reducing
salaries, laying off workers and closing plants, is Obama willing to resist
calls for his intervention? Is he up for taking the blame for all the
"heartless" measures GM will have to take to salvage its future? He has put
himself squarely in a position to pay a steep political price for his assumption
of power at GM.
Most troubling is the sense that Obama cannot have thought this through. He
can't have planned this. President Clinton used to say at strategy meetings that
we needed to think three or four moves ahead and not just "kick the can down the
road." Obama is clearly not following his predecessor's advice. He realized GM
needed money. He knew the public would have a fit if he gave it. So he decided
that he would appease his electorate by exacting blood from the company's
management and directors by using his guillotine on some of its old gray heads.
But, had he thought before he acted, he would have realized that it would have
been far better to have criticized GM from a distance even as he extended more
money -- rather than to, in effect, take over the company.
The president's protestations that the government does not want to own a car
company are quite beside the point. It's his now, and he better figure out what
to do with it.