The GM Box

Posted: Jun 02, 2009 12:10 PM
David Sanger of the NY Times points out the delicate path the President will have to tread in his government takeover of General Motors.

Hold onto the government's stake too long (making major corporate decisions) and it won't take much to show evidence of politicized decisionmaking hampering GM's finanical viability.  Get out too soon, and reduce the chance that the taxpayers will ever see any of the billions they've poured into what now can only be called the "Government Motors" company.

It's a remarkable act of hubris for a President -- who has run only a Senate office and a presidential campaign -- to think that he can run an automaker.  But make no mistake -- that's what he intends to do. 

In turn, that puts him into another box, assuming GM doesn't somehow pull off a miracle turnaround.  Make the major corporate decisions, and own the failure of Government Motors.  Fail to make the major corporate decisions, and be blamed for insufficient stewardship of the taxpayer dollars that have already been poured into the carmaker.

This, my friends, is just another reason why the government has no business owning a private company.