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A Bad Precedent at GM

Eugene Elander

All right, Rick Wagoner had it coming! And Michael Moore is understandably ecstatic over the firing of the GM chairman ordered by the White House. But it's a bad precedent, and represents a gross double standard for corporate conduct in America. This may well be the camel's head in the tent.

Now, please understand that I am no fan of The General, as the company was known in Dayton, Ohio, where I grew up. The General's incompetence was only exceeded by its fabled arrogance. I recall when the first VW Beetles were arriving, and GM was asked when they would build a real compact car, not the Corvair with all of its safety and maintenance issues. The then-chairman of General Motors responded that, by God, if they ever had to build a small car, it would be the biggest small car in the world.

General Motors didn't get it then, and they don't get it now. Instead of having five automotive divisions competing mainly with each other (hey, there used to be six, including the LaSalle) they needed to concentrate on quality, economy, and safety in a limited number of distinct models. GM should have gotten by with just the Chevrolet and Cadillac divisions for decades, and they never, ever should have trashed their pioneering all-electric car in the 1990s. Their game plan for corporate survival now is inadequate and less creative than Chrysler's comparable plan.

With that said, though, do we really want our President micromanaging our economy, at the level of individual business firms? Why do we think that this approach will work better than the "carrot and stick" approach of financial incentives for good conduct and punishments for misconduct? The various bailouts, subsidies, fund distributions, and similar steps taken to solve our economic crisis have taken that form. With the rigorous controls which were so sadly lacking in the TARP bailout, they just might work.

What is unlikely to work is making our corporate presidents and CEOs look over their shoulders and wonder, Who's Next? After all, Rick Wagoner was far from the worst example of mismanagement; the banks and other financial institutions, not to mention AIG, initiated the crisis due to their greed combined with incompetence. Then, there are those hedge fund managers receiving literally billions of dollars to mismanage customers' money. There are seemingly endless examples far worse than GM's.

It should have told the White House something that virtually every auto manufacturer is in trouble, even Toyota and Honda, and the German auto makers. Why single out Rick Wagoner for the Obama Ax? Is this symbolic scapegoating, or is it the start of a new economic policy in America? And, if it is the latter, such a major departure from our traditional "rules of the game" deserves a major national debate, in Congress and by the public.

Michael Moore's enjoyment of the firing of the Chairman of The General is understandable; he grew up in Flint, Michigan, a town GM pretty much ruined. But I also grew up in a GM town, Dayton, Ohio, home of Frigidaire, Delco Moraine, Inland and other GM branches. And I don't think firing Rick Wagoner is going to help either Dayton, Ohio or Flint, Michigan very much. The satisfaction Michael and others feel will be costly if it comes from a new government policy of the Feds picking and choosing our business managers. There's a name for that approach, and that name is certainly not capitalism.

Author's Bio: Author's Biography Eugene Elander has been a progressive social and political activist for decades. As an author, he won the Young Poets Award at 16 from the Dayton Poets Guild for his poem, The Vision. He was chosen Poet Laureate of Pownal, Vermont. His three new verses re-named America the Beautiful:September 11, 2001 were widely acclaimed and read into the Congressional Record by U.S. Senator Chris Dodd. Eugene has authored three volumes of poetry: The Right Click, The World Click, and Journeyings, all written from 2004 to 2006, in the U.S. and Sweden, as well as a just published novel: The Goat of God. Another novel, To Turn the Tide, is due in 2009. He is a freelance columnist who published a newspaper for ten years in New London, CT. Mr. Elander is an economist and college lecturer, and has been an agency executive director, emergency management consultant, investigator; and former animal control officer, deputy code enforcement and health officer for Farmington, New Hampshire. He and his wife Birgit, who co-authored The World Click, divide their time between Georgia and her homeland, Gotland, Sweden. Several other novels are underway, including a sequel to The Goat of God, and he is president of his own Elander Press

www.opednews.com/articles/A-Bad-Precedent-at-GM-by-Eugene-Elander-090406-399.html

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