David Brooks wrote an interesting op-ed piece earlier this week regarding Obama’s recent announcement that bankruptcy may be in General Motors’ and Chrysler’s futures. His conclusion is that the announcement is so much smoke and mirrors and that Obama will do like every other president has ever done and determine that bankruptcy is the answer for a few months from now and that, in the meantime, the companies need to continue their perpetual restructuring. In this way the day of reckoning could be put off indefinitely, always a few months hence.
However, Obama did more than simply say the magic word, “bankruptcy.” He fired Rick Wagoner and installed Fritz Henderson in his place. In doing so, Obama now owns the fallout from GM, good or bad. As Brooks wrote,
And yet by enmeshing the White House so deeply into G.M., Obama has increased the odds that March’s menacing threat will lead to June’s wobbly wiggle-out. The Obama administration and the Democratic Party are now completely implicated in the coming G.M. wreck. Over the next few months, the White House will be subject to a gigantic lobbying barrage. The Midwestern delegations, swing states all, will pull out all the stops to prevent plant foreclosures. Unions will be furious if the Obama-run company rips up the union contract. Is the White House ready for the headline “Obama to Middle America: Drop Dead”? It would take a party with a political death wish to see this through.
Whether Obama follows through with his threat to send GM through bankruptcy or not, by replacing Wagoner, the Obama administration is implicated in the outcome. Brooks is right that by making this move, the White House has opened its doors to automotive lobbyists who will inevitably (and rightly) see Obama as holding the reins at the automakers. As a result, when GM closes plants in Anderson or Kokomo, it will be Obama who will ultimately be to blame. When GM contracts with another, cheaper supplier and a plant closes down in Wisconsin as a result, it will be Obama who is ultimately to blame. It will be interesting to see whether the union members who will bear the brunt of the reorganization will regard Change™ as something they can believe in.
It is ironic that by summarily canning a fat-cat CEO of a multinational corporation, the president may have sealed his demise with the unions. But, by taking that step, he has placed himself in Wagoner’s place. He is now the de facto CEO of General Motors (albeit, the least well-paid one in decades) with all that entails.
Meanwhile, Congressmen like Joe Donnelly (D-IN) from Indiana’s second district and Tim Ryan (D-OH) from Ohio’s 17th district, will be placed in awkward positions. Do they stand with their president in the interest of party unity? They certainly will be exerting pressure upon him to avert plant closures in their districts. But, Obama is going to be faced with incredibly difficult decisions and not every congressman who lobbies the president will be accommodated. As it is written, “Many will say to Obama on that day, ‘Lord, Lord, spare our communities.’ But he will say to them, ‘I never knew you. Depart from me.’”
Meanwhile, Obama’s staffers don’t drive American cars. Maybe they’re worried about the warranties.
RSS
