Should the Government be allowed to interfere in a private company?

[Steve]

So Rick Wagoner is on the outs, he was fired by Barack Obama. Does the president have this power? That does everyone think about this?

Should the Government be allowed to interfere in a private company?

[anthonyl9]

great topic for this board, related to this post i made a few weeks ago:

http://www.gmtruckclub.com/forum/showthread.php?t=20233 (http://www.gmtruckclub.com/forum/showthread.php?t=20233)

seems to be the same issue in a different light. interested to see if you guys have a different opinion about bailing out the auto industry.

[tbplus10]

I personnally dont like to see goverment interference in private buisiness.
But since GM asked and the goverment decided to spend "our" money on bailing companies out of a predicament that "I feel" the companies brought upon themselves then yes the goverment had better oversee my money. Even if that means stepping in and firing key people. I'm like a big stockholder I want a good return on my investment.
Look at the AIG issue, these people are still trying to pillage the village long after it's been burned down, their waiting for the rescue forces to bring them relief funds meant to reconstruct so they can pillage them too for their bank accounts, not to rebuild.
I was always taught a bonus was extra earned for doing above and beyond the set measure, if the companies are failing why do people think they deserve a bonus, you didnt succeed above the set measure. And so what if they quit because they didnt get their bonus, do you really think theres a company out there that can and will offer them a big bonus to come work for them, their last job was with a company that failed.

[Steve]

The corporate world isn't that way any more. Everyone is managed by MBOs (management by objective) so that you start out at a set salary, but you earn a bonus if you can reach certain objectives. Even if times are bad or if the company isn't doing well, you still met what you were supposed to, so you get your bonus.

In former years, it would have all been "salary", but now they lower the starting salary and give you the extra money if you hit your targets, ie. the "bonus". The end result is the same amount of money.

That way, if they fire you or if you go on disability, you get your "salary" and they don't have to pay the extra bonus money, so they can save a lot of money. I've been working like the for the last job that I had and sometimes the bonus can be upwards of 1/2 the compensation.

[ippielb]

Personally no, the company got themselves into it, they should deal with it themselves. Your government shouldn't have given the money to the manufactures, but instead the people buying new vehicles.

[TRPLXL2]

I don't think the government is bailing out JUST the auto-undustry, they are bailing out the United States as a whole. For instance when we were on strike here in Ohio, it wasn't just the local unions out on the street it was everyone in the community. Here are some of the companies that sent people out to stand with us on the picket line:
Gyro George
Speedway gas station
Brookpark lanes bowling alley
Antonios pizza shop
Mr. Chicken
Dunkin Doughnuts
Pizza Hut
Subway
Arby's
A handful of local bar owners and staff
Parma GMC & Chevrolet dealers around the plant
Shiloh truck drivers
Local automotive shops, Conrad's, GoodYear, Jiffy Lube

All of these places would shut down for sure because as they stated for the local news, WE are 75% of there business and we are some of the best tippers around. This bailout effects everyone in some way or another whether you realize it or not, if you have a GM or Chrysler plant around your neighborhood stop in a local restaurant or business and ask them how THEY would be affected by the downfall of any of the BIG 3. All I can say is that it is just a sad situation all around, I just give up any more to be honest. Only time will tell if the government can do better than we have been doing for the last 100 years, good luck to Obama and his administration.:shocked:

[cascott325]

in my opinion, the president of the united states is THE big boss man, and he has the power to do what he deems necessary to see that our country is doing the best it can. i mean look at general motors, look at chevrolet, look at nascar, note how many nascar teams out there are chevrolet teams, and see how much money chevrolet dishes out to each team... over 6 million dollars PER TEAM!!! over half of the field in nascar is chevrolet (i love that fact) but what about our money. as much as i hate to say it, going to a race or watching a race on television is a luxury. i need to know that the tax money that come out of every paycheck i draw, the $150 that come out of every $450 i earn is going towards bettering our economy, making America stronger as a nation, and ensuring that those willing to work will have a job. i do not agree with those who are not willing to work, getting a check. i do however, agree that the people who have a disability and cannot work should. though i may be an extreme republican, i am a logical human being who want to better his world and himself. i think that if we as a nation would forget trying to be so politically correct, grow some balls and learn to say NO once in a while, that we would be fine, and our treasury would jump back up in no time.

[tbplus10]

I understand the MBO theory.
The company I work for just renegotiated all bonus contracts away from the MBO schedule to the traditional style bonus, this was willingly initiated by the employee's directly affected by the bonus schedule. It involved rescheduling some pay rates but in the end the employees will win by securing our employment for the future and loosening up capital for the company to grow. Most employees are earning higher than average wages for our sector anyways because our companies always been generous with raises.
But the simple 2+2=4 fact is if you keep taking big bonus's when your company's on the ropes in the end all you do is close the company faster, taking away any extra time that may have been gained and may have given enough time to wait out the financial situation for better times.

Basically taking everything you can now and not worrying about the future.
One of the biggest problems Americans have is the attitude "I want it right now, and I deserve it".

[bob13]

A lot of vary valid points. I have to mention that Wagoner did not play the game like the other CEOs did. He did not pillage funds from the company into his own coffers like the greedy BAST***s did. So I do not think its fair to ask him to step down in his situation, especially when they did not do the same to the banking industry. That being said, part of the reason we are in this mess now was do to the fact that over the last decade the government eased ristrictions on the banking industry. It is unfortunate that if you leave an avenue of abuse, someone will abuse the hell out of it. With the economy being so global we cannot afford to not have government oversight on major corporations when their fiscal health can decide if the country fails or prospers. I have been a union employee in 3 different fields, (my entire working life) and come from a family made up of union employees so my heart will always be with the workers and independance but the times we are in call for checks and balances. This is not the first time this has happened in America. If you let big business run the show unchecked, bad things happen!
Well that was quite the rant, just my opinion. Thanks for listening!

[Steve]

Since when does a loan constitute stockholdership? So if a bank loans money to a company, the bank can then come in and tell them how to run the operation, what color to paint the walls and who they can and can't hire and fire? If and only if that was part of the loan agreement, then maybe. The SBA gives out all types of loans all day long, does that give the President or Congress the ability to demand that they do business a certain way?

Moreover, we're a nation of laws, not a nation of men. We don't have a soverign. The office of the President does not run the country, the occupier of that office can not do whatever he sees fit. That position is merely 1/3 of the government which should be here to protect and serve, provide roads for commerce, protection from crime, oversee property rights, etc.

What I don't understand is how people who have never written and executed business plans can think they could do a better job running an automobile company, let alone the heir appartent Fritz Henderson, who I know a little bit about, he's another lifetime GMer.

I think everyone knows the main reasons that trucks and cars are not selling is the previous high cost of fuel (unrelated to the performance of the company), the housing bubble that burst (again, unrelated) and other speculative and harmful business practices across the business world. All of these unemployed people don't need new cars. Construction firms that are not working don't need a new truck. Plus, cars and trucks are built better, so instead of keeping them 50,000 miles llike you did 30 years ago, you can not run them 200,000 miles.

Just like other depressions and recessions in history, people who have jobs quit buying large capital expenditures like houses and autos. Throw in a credit freeze (again from the burst bubble) and it makes things all that much worse.

[tbplus10]

A normal loan doesnt constitute becoming a stock holder, but in this case the terms GM and other companies accepted to recieve the funds must have had provisions to allow what has happened.
If they didnt sign on to terms of that nature GM could've told the goverment to pack sand. That didnt happen so they allowed themselves to be put in this position.
Maybe when agreeing to the loan they felt the chances of the goverment asking for removal of the CEO were minimal, this is something we dont know, in fact we truthfully dont know what all was agreed to procure these loans.
Which is obvious by the results we've seen so far from the banking industy.
But back to your original question "Should Goverment be allowed to interfere in private business" under normal circumstances no, but we can only assume since we dont know the details of the transaction that private business invited interference by asking for and taking loans under terms that would allow this to happen.
These bailouts only deepen my feelings that most people in this country think the goverment should be everything to them when they need it but become invisible when they dont want it, you cant have it both ways.

[crane557]

Because of the way this whole thing went down I think the Government should have some power over this. I do not believe that the government can do things better, but when they accepted the bailout money things changed. I guess it should have been spelled out better from the start though.

My 2cents

[bry2500]

I agree with Steve on this one. the government has no place in the coorporate world. The fact that GM went to them for help shows that instead of canning 3/4 of the workforce at GM he would rather succomb to the powers that be and keep more Americans employed. Had they done it without help you would see an even more staggering unemployment percentage accross the nation.

Now what if you were behind on your mortgage and you turned to the government for one of their new programs and they said sure we'll help you out but now you have to move out of your house because we did. Where is the fairness in this.

And Mr. Fritz with his instantaneous agreement to controlled bankruptcy scares the crap out of me and raises some questions on how well he will end running GM. Time Will tell though.

[chevy2007]

Once they took the our money it is up to us and we have choose Obama as our leader so ultimately it should be up to Him.

[vncj96]

Honestly Wagoner should have been gone years ago. Was it right for the President to say this I think so, while we may be just a few thousand with a small voice in our forum, the fact is this was taxpayer money and with this economy in crumbles the government did what they felt was in the best interest of the taxpayers money considering they had an extremely limited time frame. The big three represents some of the longest standing companies in the world and they cant let them just go away. I dont remember who said it years ago but they siad if you want to lose the presidency the best way to do it would be to turn your back on the airlines and the big three. Michigan is in ruins from this already it gets any worse then the residents leave that state to go to others that will give them welfare, in turn just handing out more money. GM needed a change and Obama gave it to them. By the way I am by no means an Obama supporter, but he was dealt a shi*@y hand from day one

[95CTburb19]

meh I just think it's stupid that the Gov't gives these companies all kinds of money then the exec's give out huge bonuses to high level employees. They send them on corporate jets to some spa across the country where they spend more in a day than I made last year. These guys are making millions a year driving these companies into the ground, I just don't get it.:no: