The chairman and chief executive of General Motors, Rick Wagoner, is resigning, just hours before President Obama was expected to unveil his rescue plans for G.M. and the ailing American auto industry, a person close to the decision said Sunday.
Mr. Wagoner was asked to step down as part of G.M.’s restructuring agreement with the Obama administration, according to an administration official who spoke on condition of anonymity because a formal announcement has not been made yet. Mr. Wagoner then agreed to resign.The unexpected move by Mr. Wagoner, who has been at the helm of G.M. for eight years, was not confirmed by the company. A statement about Mr. Wagoner’s future will be issued after the president’s comments, which is expected to be Monday morning.
December 18, 2008 C-SPAN
President George W. Bush spoke about domestic policy during his administration with Christopher DeMuth. In the conversation he reflected on a number of topics including immigration reform, energy policy, taxes, and the state of the economy. In response to questions about the economy he talked about providing federal aid to U.S. auto makers, saying that he did not favor a “disorderly” bankruptcy but had not yet decided on how to respond to calls for federal aid. See more CSPANJunkie Videos here.
From Late Edition Dec. 21, 2008. Ed Rollins slaps Bush pretty hard for the damage he's already done to our economy.
BLITZER: David Gergen, did President Bush do the right thing by bailing out Chrysler and GM?
GERGEN: Yes. He had backed himself into a corner and had to act and I think Dick Cheney put it well when he said had Bush had not done this, he would have been remembered as the Herbert Hoover of his era.
And it was unfortunate they had to come to this thing. But the real point is here, he's not only been forced to do that, but he has punted this to Barack Obama. Obama now faces a ton of huge decisions in the first 90 days of his presidency. BLITZER: There's no doubt, James, that he did punt in effect because by March 31st, if it doesn't look like it's working out, it is all going to be up to the president-elect and the new Congress to decide what to do.
CARVILLE: They're going to run out of money before March 31st. And right now, auto sales, everybody, doesn't matter, not just American carmakers, Japanese or European carmakers also are down 35, 40 percent. I don't think anybody thinks that is going to change between now and March and David is right, they have the ball and they're going to have to figure out what to do with this and it's going to be quick, very quick.
BLITZER: So Ed Rollins, the $14 or $17 billion in this initial bridge loan as it's called, that could escalate. That could go up to a lot more money given the overall state of the economy and the low demand for new cars right now.
ROLLINS: I think there's no question if you're going to try to save this industry, which is an industry in real problems, you are going to have a lot more money that is going to be thrown at him. I think that's a lot of the objections of the Republicans.
I think the problem the president made here is he let it go to Congress. The Congress, his own party, basically, didn't want it. There's a few weeks before the new president comes in and this president is trying to be relevant. He doesn't want to be Herbert Hoover, he is going to be Herbert Hoover. I don't care what he says, or what Dick Cheney says, this president has damaged this economy and is going to go out with a tarnished record. I think the critical thing here is let the new Congress take charge and let the new president take charge and move it forward. Unfortunately, it is on their watch and it is a mess.
A telling segment from Wolf Blitzer on Late Edition, although his motivations are a little murky for me. Inviting on House Minority Whip Eric Cantor to be the GOP balance to discuss the auto bailout, Blitzer actually gives Cantor a second chance to distance himself away from George Bush's bridge loan and then reiterates later in the segment that the Democrats are siding with Bush and the GOP are not. THAT's the fact that Wolfie wants all his viewers to be clear on...not the half dozen "Everybody knows" made-up facts that Cantor is left to spew without interruption.
Curious, isn't it, that Blitzer doesn't ask why Cantor suddenly has interest in accountability for a successful business model for the taxpayers' sakes? After all, when AIG and BearStearns got their money, no one asked their CEOs which mode of transportation they took, nor whether they would cut salaries, and their loss was due to unregulated credit swaps--basically a new turn on junk bonds.
And on that salary question...out of curiosity, while GM CEO Rick Wagoner agreed to a token $1 salary as part of his bailout, his salary rose in 2007 by 64% to $15.7 million, significantly higher than his Toyota counterpart. I'd hazard a guess that the rest of GM's officers are similarly compensated, but Cantor is more worried about the guys on the line making $30/hour.
Hey Wolf, I hate having to do your job for you, but let's do some basic math, shall we? Rick Wagoner's salary is FOURTEEN times more than his Toyota counterpart. $30 an hour equates to roughly $62,400 a year. That means that the CEO of GM earned the equivalent of more than 251 employees last year. Is it really so hard for you to bring up these facts, Wolf? C'mon, I dare you to ask Cantor where's his concern for the taxpayers when it comes to executive compensation.
If you do that, maybe I'll forgive you for forgetting that none of this concern even crossed through Cantor's mind when he happily handed out no-strings-attached money to financial industries. Maybe.
During a panel discussion on The McLaughlin Group Monica Crowley claims that George Bush and the UAW were conspiring together to make sure that the unions didn't have to make concessions and that the only reason that most Americans oppose the bailout is because it's not a bailout of the auto industry, but the union instead. George Bush is in bed with the unions. I've heard it all now.
Keith reports on George Bush agreeing to bailout the auto industry and the strings attached to that bailout. Robert Kuttner weighs in on whether the bailout was necessary and the differences between the way the money for the automotive companies and Wall Street were handled.
The White House announced a $17.4 billion rescue package for the troubled Detroit auto makers that allows them to avoid bankruptcy and leaves many of the big decisions for the incoming Obama administration.
Speaking from the White House, President George W. Bush said the administration decided against forcing a bankruptcy to compel cost-cutting, in order to avoid the risk that consumers would desert one or more of the companies and touch off an industry collapse, deepening the current economic downturn.
"In the midst of a financial crisis...allowing the U.S. auto industry to collapse is not a responsible course of action," Mr. Bush said.
"Under ordinary economic circumstances, I would say 'this is the price that failed companies must pay' and I would not favor intervening to prevent the auto makers from going out of business," the president said. "But these are not ordinary circumstances."
Of course, the wingnut faction of his party is seriously pissed. Michelle Malkin wants someone to file a lawsuit to prevent it from proceeding, while the Heritage Foundation folks are just gnashing their teeth.
Because, of course, their preference is to see millions of Americans thrown out of work.
It used to be said that a recession was the Republican method for shortening the lift lines at the ski hill. A Depression must be their method for making the ski hill their own private playgrounds.
Fortunately, Bush -- who's focused these days on his legacy -- doesn't seem to feel he needs to listen to them anymore.
Paul Krugman takes on George Will on This Week about the very serious consequences to our economy if GM is allowed to go into bankruptcy.
Stephanopoulos: Let's move now to the economy. The other big issue of the week and Paul Krugman let me bring you in and get you to respond to McCain's defense of not rescuing the auto companies. He's saying basically until they change their ways and the way they do business we shouldn't be stepping in.
Krugman: The problem is time. The problem is yeah we ought to have, and I think a lot of people are talking about structuring something where we're calling it a structured bankruptcy, maybe it won't be called that, but a reform, get current management down, abrogate a lot of the contracts, probably a lot of the benefits to retirees where one way or another it could be shuffled off to the tax payers. All of this stuff to keep those companies going with but ah you know a lot of give backs, but it can't be done over night and the problem is these companies are on the verge of disappearing over night. This was, everything he said was an argument for why you should give them a short term bridge loan but nothing more than that and we can do the right thing.
But you can't expect them to come up with a plan before Christmas that's going to do everything he's saying and they should have done it years ago but they didn't and that's where we are now. Are you prepared to let probably a million plus jobs disappear in the middle of the worst recession since the nineteen thirties.
Stephanopoulos: So isn't it a sad policy the times demand it?
Krugman: It's a question of the policy giving you a little bit of time to work out the good policy. It's you know, this is, these are not normal times.
Will: Paul refers to the companies and all three are in the same boat in a sense but this is all about General Motors. Ford is not asking for money now. It only wants access to a line of credit in case there is what it calls a major industry event which means the bankruptcy of the, well the failure, General Motors is bankrupt but that is General Motors not being able to pay its bills to the three thousand parts suppliers in this country to which the three companies today owe thirteen billion dollars which is one billion dollars short of the fourteen billion dollars they're asking for.
Krugman: But that's exactly the point. We have an industry that's highly interdependent. These are not stand-alone integrated companies. They draw on the same network of suppliers. If any one of them goes down, and in particular General Motors goes down, all three go down. And so the point is, we need to work this thing out. We can't do it before… before January 20th. Um, are you prepared to make the awesome decision to allow the core of the traditional US auto industry to disappear because you weren't prepared to - you know, you wanted everything on your plate all at once - or are you prepared to pay all the …
Will: (crosstalk) But it won't …
Krugman: … It will. The suppliers will disappear. The companies will - you know, the plants will disappear, it will be a shell of its former self. We will have and continue to have an industry, the new auto industry.
The lead to the opposition to the bailout was lead by the, ah Senator Corker the Senator from Nissan which has two plants in its national headquarters in Tennessee so we will, it's not the whole industry but it's a very important part of US industrial structure. Do you want to make that decision by default?
Given what just happened to the emergency loan that didn't get made to the Big 3 auto makers, I owe a debt of thanks to Dick Cheney, not kidding for reminding us all why it is so important to keep Hoover in mind right now.
[snip]
And how does Hooverism or neo-Hooverism apply to us on this big full moon Friday night in 2008? Well last night Senate Republicans who spent the last eight years setting huge piles of taxpayer money on fire for nothing in return with two ill-advised endless wars they decided that they were the party of reduced spending and fiscal responsibility.
Hell, high water? Feh! Last night, with both hell and high water all around, Senate Republicans killed $14 billion of emergency loans to save GM, Ford and Chrysler. Why? Because they've apparently looked back at the Great Depression and decided that Hoover is their role model. Of course the government shouldn't spend money to shore up its economy and save jobs in a downturn! That might make economic sense. Couldn't do that!
The Senate Republicans are counting on our economic and historical ignorance to win short-term political points for refusing to spend government money on something that it hurts to spend money on. Nobody wants to bail anybody out. But sometimes, you have to. And frankly they are seizing the ideological opportunity to crusade against the unions and against the very idea of Americans making good wages at their jobs.
[snip]
So we're facing a looming three million job economic sink hole. Even if you don't care about those specific workers, those specific American lives, those specific American companies, those specific jobs. Even if you don't care about that everyone fears that a three million job sink hole could suck the world into a depression. Not just us. And in the face of that the Senate Republican caucus decided to block the rescue plan to make a principled point about how much they want to be like Hoover in the Great Depression. And how much they want to lower American wages.
Heather: Pat Buchanan is correct that the Southern Republicans are doing their best to kill the last of the manufacturing base in this country. Pat Buchanan and Eleanor Clift both agree that Bush is doing the right thing by considering using some of the TARP money to bail out the auto industry. Hell has surely frozen over since I heard Eleanor Clift use the words "George Bush is my new best friend". Never thought I'd see the day that happened. Monica Crowley as usual has lots of criticism with little else to offer. One last note on this. Is it a pathetic day when Pat Buchanan is speaking out more forcefully about what's going on than the Democrats in the Congress are? Every Democrat should be borrowing Pat's words here and calling the southern Republicans the "Toyota Republicans" as well and repeat it until it sticks.
