Automakers - Rejected
I've read a lot of the articles out there telling me that Obama rejected the automakers restructuring plan, but I haven't been able to find one that details why he did it. They all just say he did.
One article on MSNBC quotes him as saying that he wants the US to lead the world in clean car technology. Could he have rejected the plans simply because they included things like trucks, SUV's, and sportscars that weren't "green" enough for him?
If anyone could point me to an article that goes into some depth of the administation's logic, I'd appreciate it.
The jist of what I understand is that their plans were not substantial enough to make the companies self-sufficient going forward. I am guessing they probably used a lot of window-dressing (reduce management, close plants, etc.), but didn't get to the heart of the problem (labor, legacy costs). Personally, I think it was purposeful on the part of the car co's. This way, they can look to the unions and say "hey we tried to do this thing with as little pain as possible to the unions, but the President just won't accept it." So now the President gets to be the heavy that essentially declares bankruptcy on the auto's, which will allow them to renegotiate the contracts.
Eveyrthing we see in the news, on the Hill, etc. is just window dressing. The real decisions are being made behind closed doors. And the unions are being played.
Anybody get the impression that he was going to reject it the whole time? They seemed doomed after the first bout of money went out, and when people got upset about the AIG thing, it seemed extremely unlikely that any civil servant would "throw good money after bad".
The unions had/have to know their days under their current structure are numbered.
And I may be a bit of a conspiracy theorist, but I thought the timing of the announcement was curious. It seems like they (Fed, Treasury, Administration) are releasing news in time frames where it doesn't exacerbate a bad downturn. Market is up 500 points in a week? Expect some more of that withheld bad news to be released. The latest of what seems to be Imelda Marcus' closet of shoes to drop will be the credit card market. Bad news seems to already be leaking out. Just waiting for someone to confirm it.
My thoughts on this is that Obama now has been told by his advisors they cant save GM after a few months ago he said they wont let them fail. The problem is he and the politicians can't force the bk because if they do, the union contracts are voided and that effectively will be the end of the UAW. If that happens, he and the dems lose their money and endorsement. The administrations only option was to force out waggoner, throw GM a lifeline and let the new CEO take the blame for the bk since it was quite obvious waggoner was not going to play ball.