Line-by-Line Analysis of the Obama Speech on the Automotive industry from March 30, 2009
Monday, April 20th, 2009
In the first place, Obama is right, though the rhetoric is decidedly populist, downplaying the performance of CEOs from the Big 3 (rightly of course), and promoting the efforts of ordinary Americans. Obama is right that the industry must stand on its own but he needs to address upfront that the industry is trying to operate using tired practices in tumultuous times. The Auto Task Force (or ATF as I will now call it) must realize that the problems the Detroit faces are only partly their own. It is still true that a person can only change their own habits, not others, but the ATF has a special task ahead of it, changing practices in a multi-industry downturn.
The next paragraph compliments GM for producing the Chevy Malibu, which right perhaps, received the nod for North American car of the year. But in the next sentence he go on to hail Buick of all entities as the most reliable car IN THE WORLD. You must be having a laugh. This web site has debunked these ratings in the past, but this author has never sat in a Buick that functioned properly. Something is always broken. The stereo. The windows. The suspension and ride comfort. There are a great many people who liked the bench seating in Buicks of old, but these tend to be the same people who would rather be sitting in a la-z-boy than a car.
The President goes on to discuss the decision to extend yet again the period for the automakers to restructure. GM gets two more months, while Chrysler gets 30 days. The problem with this approach is that it forces government to keep perpetuating the same failed leadership decisions. To deal with this criticism Obama notes that he has forced the departure of Rick Wagoner, GM’s Chairman and CEO, and someone who should have resigned some time ago, certainly before crisis hit in 2008. Then Obama does something, which should prove troublesome. He appoints an insider to run the company as interim CEO. Fritz Henderson gets the nod. A shrewder move would have been to insert someone with a record of accomplishment of success in breaking up companies. Henderson has served at GM during a time when the company got increasingly bloated, and the portfolio became a tangled mess.
What of this change? What good will brining in Fritz Henderson do for the viability of the company? (more…)







