Holman Jenkins on “King” Obama’s GM Strategy:
Kingly prerogative also conflicts with kingly prerogative in the case of GM’s unsecured creditors, who are the sticking point in agreeing to a turnaround plan by the drop-dead date of June 1. His retainer, Steven Rattner, has delivered word that the king’s pleasure is that these unsecured creditors give up 100% of their claims in return for GM stock.
It may also be the king’s pleasure, he advised, to convert at some point the government’s own $13 billion in bailout loans into GM stock.
There’s just one problem: Why on earth would GM’s creditors — who include not just bondholders but the UAW’s health-care trust — want any part of this deal?
They’ve already seen that the rights and privileges of shareholders are not worth diddly when the king is throwing his prerogatives around. He dispensed with the services of GM chief Rick Wagoner, though the king owned not a single share of GM stock at the time. His minions communicated the king’s pleasure that GM consider discontinuing its GMC brand, maker of pickups and SUVs that offendeth the royal eye — though these vehicles earn GM’s fattest profit margins.
His minions haven’t asked GM to give up the Chevy Volt, even after determining it will be a profitless black hole, because of the king’s fondness for green.
No wonder the king’s mediation of 40 years of stalemated labor and business issues in the auto sector isn’t going so well. There’s a reason royal discretion has long been outmoded as a way to run an economy: Things just work better if a realm’s subjects are left to resolve their own disputes and interests through the impersonal mechanism of the markets and the law.
Oh, this one is really a must read, folks. Please go over – there is snark-a-plenty.
Obama has fired GM’s CEO. With no Constitutional authority to do so. Now he is demanding concessions that no bankruptcy court would order.
Obama was not elected king, he was elected President.
I’m no fan of GM or the hash it has made of its core business. But I am considerably less a fan of an autocrat in the White House attempting to micromanage a car company when he was elected – not anointed – to run this country.
Mixing business and politics is like mixing gasoline and matches. Watching from a distance may be exciting, but up close and personal, someone is going to get hurt.