- David Magee
When the U.S. government forced General Motors Chairman-CEO Rick Wagoner from his job last week, headlines read that company president Fritz Henderson was taking charge. But in reality, Mr. Henderson only assumed a new title. Uncle Sam took charge of the automaker. And now the business world is watching to see what the collateral impact of such a non-capitalistic arrangement will be.
Without question, the government has played a critical role backstopping the nation's financial crisis, although many of its actions remain shrouded in heavy (and just) criticism. But when the government reaches beyond protection of the vital monetary cycle and into the daily operation of one of the world's largest manufacturing and consumer-product companies, it is time to start worrying.
America's business environment runs upon a delicate balance of layered causes and effects supported by free-market principles. For years, General Motors has been questionably run, losing billions annually with a litany of problems including too many unprofitable products and out-of-control labor costs. But recession or no, business always has a way of correcting itself. Left alone, GM likely would have landed in bankruptcy, but the court, the company's leadership and its creditors would have solved the problems and, in the interim, the company and its brands would have continued to operate under one umbrella as planned.
More...
