Government Motors

As Daniel Howes says in his latest Commentary- Federal control of General Motors is game changer. You might know that GM is being 'bailed out' by the federal government- you might be upset that the government is taking a larger role in businesses in our country- but you might not realize how different and revolutionary the federal takeover of GM is.

(The Executive Branch of the US Government will now control) 50 percent of General Motors Corp. with the United Auto Workers set to gain another 39 percent of the automaker. The feds would select GM's directors, effectively giving this White House (and the others to follow) control over GM's strategic direction, top management and even high-level product decisions. That's just the beginning.

With or without bankruptcy, a Government Motors partnered with the UAW would be a whole new model for the global auto industry, a nationalized company whose labor union owners would be bargaining with themselves, their interests in positive cash flow to finance retiree health care obligations colliding with political interests to preserve wages and benefits.

Government Motors could be a bulwark of infinitely patient capital married to major stakeholders whose goals aren't shareholder return, operational efficiency and market penetration but the social goals of maximized employment, environmental trend-setting and political (damage) control.

"It is not our desire to either own or run one of the auto companies," White House Press Secretary Robert Gibbs said Monday. It may not be, as if saying so makes it so, but that's the practical effect.

Daniel Howes goes on to talk about how this is going to change the game for everyone, not just GM. How is a company like Ford supposed to compete with Government Motors- whenever they produce a better car, they have to worry that the government is going to subsidize cars produced by GM- or let's say the Ford F-150 does really well- maybe the government will get upset and pass laws that make the Ford F-150 'environmentally' incorrect? There are conflicts of interest all over the place with this arrangement, and no one is going to win.

No one, no country, has ever nationalized an industry in this manner- it is shocking. Not only that, but the deal that the government is forcing GM to take is also a mobster deal- the banks (who GM owes money to) and the shareholders (who invested in GM by buying its stock) get nothing out of this deal, and instead ownership of the company goes to the labor union and the government. This is organized looting of private companies by mobsters.

And all of this for what? To produce cars that are not competitive? To operate factories that are too expensive? To prop up a failing whip-and-buggy industry? It's not like this is the GM of years ago- this is a company already destroyed, already shed of jobs and capital and industry- we are sacrificing our morals, beliefs, and ideas about the role of government society to save the dried up dead husk of an industry that has seen its best days already. That deal, made in this manner, is shocking.

Those who voted for Change last election- all those who failed to vote Republican for President/Congress/County/local- you're getting it- nationalized Government Motors competing and driving private companies out of business all for the benefit of politically connected people in our nation. That is change that I can't believe is happening in the United States of America.