Wednesday, May 27, 2009

Government Motors

The NYT this morning reveals that our share in the 'reorganized' General Motors is likely to hit 70 percent, at an end cost of perhaps a billion dollars for each percentage point. (The UAW gets 20 percent.) Do you really believe that GM is worth anywhere near one hundred billion dollars? I don't either.

For the first time, the NYT uses the term 'Government Motors', and asks a few of the hard questions, such as: 1) Will GM's new shareholders favor the company when buying automobiles for government fleets? 2) 'Can the government help turn around a company known for its bureaucratic approach to business?' (Is that a subtle sentence, or what? Another way to put it: 'Can a government run a car company better than it runs the Division of Motor Vehicles?') And of course the biggie: 3) Will the government meddle in company decisions?

'Already,' note the Times writers, 'members of Congress have been calling Steven Rattner and Ron Bloom, who are running the auto task force, to complain about the closing of Chrysler and G.M. dealerships in their states.' Who could have imagined that Congressfolk would do such a thing? What--Barney Frank, bring pressure to bear for his brother-in-law's Cadillac dealership? Blue skies! -- Dan Ford

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