Monday, March 30, 2009
Government forces GM chairman out; Chrysler, GM get brief extension
Stocks are down moderately on Monday morning (March 30) after another “Sunday night massacre” – this time, the Obama administration has apparently forced GM chairman Wick Wagoner to resign, over a weekend, as part of its deal to let GM continue on life support for sixty more days. Chrysler must merge with Fiat in thirty days, and the government will guarantee new car warranties for consumers. Orderly chapter 11 bankruptcies apparently are still on the table.
A typical media story is by Sheryl Gay Stolberg and Bill Vlasic on the front page of the March 30, 2009 New York Times, “U.S. moves to overhaul ailing automakers”, here.
Originally, according to the terms of the Bush administration bailout in December 2008, the companies had until March 31, 2009 to restructure and demonstrate viability. Time was up!
Why not let them fail, sell the pieces to other companies (including foreign companies) and retool factories in Michigan and Ohio (the hardest hit areas) to make electric cars and hybrids, but under new ownership? It seems to me that a lot of the renewable energy car industry needs to be located in the upper Midwest, where the job losses are, as well as California, where it has started.