Auto Industry

So a few days back, I read the news that President Obama fired the CEO of GM. My instant reaction to this was…Finally! Way to go Mr. President! Since GM, Chrysler, and Ford have not been showing considerable improvement since receiving federal money from the government, I think this was a good step to tell the other two of the “Big 3” that you better get your act together otherwise you are next. However, when I turned on the news channels in the evening, I saw a lot of dissatisfaction among analysts and news anchors questioning how the President can decide who has to be fired from GM or any other auto company’s top ranks?

So now I’m thinking to myself, what if when AIG gave out their bonuses to its employees the President would have fired the AIG CEO Ed Liddy, would we have had the same reaction? I can understand that people in big firms who have taken the federal money, the stock market and other companies in trouble are afraid and skeptic of this action with the GM CEO. They think that the US government will soon start dictating other decisions in companies that took federal money. There is already a cap in place on executive salary in companies that received help. My view is – why not? You were in trouble and were about to shutdown, so some XYZ investor steps in and invests a lot of money in your company after taking more than expected heat for this decision. And now XYZ is telling you that you better take some actions otherwise I want my money back and I don’t care if you go bankrupt. So how does it matter if this XYZ is the US government? Once GM has enough money and it returns the federal money back, it can always start taking its own decisions and hire any Tom, Dick and Harry as the CEO again. At least now you have a goal to work towards.

I for one don’t agree with all the decisions taken by the Obama administrations but on this one, I’m with them. The Big 3 automakers have had way too much time, money and leeway with the previous governments and due to that they have become very sloppy and have spiraled down to their worst performance ever. If you can’t walk with the rest of the world on making cars of the future which are energy efficient and continue to make gas guzzlers that give 11 miles / gallon, who cares if you go bankrupt? I know there are a lot of employees working in these Big 3 manufacturing plants and they would feel otherwise, but we really have to ask ourselves that if we want to compete with Toyota, Honda and Nissan what do we have to do? The answer is pretty simple. Change the way you make your cars and make it for the common man who is under a lot of financial stress and burden to survive. Think about him when you design a car or a truck. Don’t for once think about the profit that you will make out of it. You have had way too many years to make all the profit that you wanted to, and you screwed up. So smarten up now!