[jimotis4heisman]

Barack Obama's Industrial Policy Is Now Too Big to Fail - WSJ.com

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GM's CEO Rick Wagoner got the Presidential boot over the weekend, and GM was given two months to reorganize, or get forced into a "quick and surgical" bankruptcy. For once, we agree with Michigan Governor Jennifer Granholm, who called Mr. Wagoner "a sacrificial lamb." The Administration needed someone to take the fall to sate the anticorporate furies it has helped to unleash. Mr. Wagoner wasn't solely responsible for GM's bad business decisions, but only recently did he promote the kind of radical restructuring the company has long needed. We only wish someone in Washington would also be shown the door, starting with those at the Federal Reserve whose oil-price bubbles also helped to break the car makers.
Sacking a CEO for appearance sake was the easy part. Good luck trying to get the unions to make concessions on wages and legacy costs, and bondholders to agree to reduce the debt burden. A senior Treasury official told us the Administration isn't holding its breath and considers "surgical bankruptcy" the likeliest outcome. In that event, "a shiny new GM" would emerge, said the official, who didn't want to be identified. Asked why GM wasn't forced into Chapter 11 immediately, the official said the Administration wanted to avoid "years of uncontrolled chaos" and needed time to set the stage for "the more surgical process."
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To wit, that GM is now politically too big to fail. Listen to Mr. Obama: "We cannot, we must not, and we will not let our auto industry simply vanish." No mention that Ford took no bailout. Or that a third of American auto workers, some 100,000, are employed by successful "transplant," or foreign, car makers in dozens of U.S. plants.
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Yet the Treasury's own "viability summary," released yesterday, points out that "GM's product portfolio is more vulnerable to CAFE [fuel-economy] standard increases than the portfolios of many of its competitors." Only nine of GM's "top 20 profit contributors in 2008" were cars; the rest were SUVs and trucks, which are politically incorrect on Capitol Hill and with the green lobbies. Chrysler has a similar problem. Even GM's much-vaunted electric Volt car is "too expensive to be commercially successful," according to Treasury.

In other words, Mr. Obama's industrial policy vision runs directly counter to a strategy that would get the companies back to profitability as soon as possible. To help them sell those unwanted cars, Mr. Obama yesterday was already pledging that taxpayers will cover new-car warranties. And he urged Congress to pass a new "incentive program" (read: subsidy) for "cleaner car" purchases.
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with the govt forced chrysler-fiat deal. is this a good time to mention citi-wachovia-wells fargo debacle of fdic stuck deal between citi and wachovia for 2.2b when four days later wells fargo wanted to pay 15.1b for the same assests. govt forced vs free markets.... hmmm....
Judge blocks Wells Fargo-Wachovia deal - CNN.com


what has happened is that the govt has created an entity to big to fail in barack obamas own words. one that has a ceo set up and sacrificed to be picketed and sent death threats a la the aig crew. now you have the uaw with all the leverage against the company. you have a forced deal in chrsyler-fiat which will not result in a fair or even outcome. you will have "a shiny new government motors" emerge with green cars-not the volt since the treasury doesnt like that one. you have the feds saying cafe has made the company vunerable (note that cafe standards have just been increased again). you only have 9 viable (profitable) cars in the entire gm lineup. now you have a govt backed dircet subisidy program funded by the taxpayer to incent people to buy the us govt newest overtaken companies (gm/chrysler) you can beat that those incetives will carve out the "foreign" makers and tens of thousands of us domestic jobs will be put in question of those companies such as honda, nissan, hyundai etc who make their cars in the us.