Article: Auto Gets Tough Love, While Wall Street Feels the Love

Auto Gets Tough Love, While Wall Street Feels the Love
posted by John Nichols on 03/30/2009 @ 9:32pm

Of course, General Motors CEO Rick Rick Wagoner was incapable of running a major auto company. Aside from a name that sounded like a Jeep model, Wagoner brought nothing to the American auto industry but red ink and shuttered factories.

It would have been encouraging if the GM board and stockholders had recognized Wagoner's incompetence.

As it happened, they didn't.

It took an "if-Wagoner-stays, the-federal-aid-goes" threat from President Obama to dislodge Wagoner. And, despite the grumbling of southern-triumphalist Senator Bob Corker, R-Foreign Automakers, GM will be better for the executive exchange forced upon it be the feds.

Obama was exactly right when he said, "The pain being felt in places that rely on our auto industry is not the fault of our workers, who labor tirelessly and desperately want to see their companies succeed. And it is not the fault of all the families and communities that supported manufacturing plants throughout the generations. Rather, it is a failure of leadership--from Washington to Detroit--that led our auto companies to this point."

Unfortunately, Obama also says that, while it was not the fault of the autoworkers or the communities that rely on what is left of the American auto industry, "There are jobs that cannot be saved. There are plants that will not reopen..."

That's tough talk, and there will be those who compliment Obama for taking a hard line with the union workers who the president admits "are the reason I am here today."

There will be those who agree with his assessment that, after years of misdirection and dysfunction from the top of the American auto industry, "We've reached the end of that road."

There is only one part of this tough-love scenario that doesn't feel right.

How come, if the auto industry must feel the pain, the speculators on Wall Street and the CEOs of the big banks and insurance companies only feel the love of the TARP program?

Why is it, as the Politico headline on Monday evening suggested, "Carrots for banks, sticks for autos"?

Why is it that Michigan Congressman Thaddeus McCotter, the chairman of the House Republican Policy Committee, sounds so logical when he asks, "When will the Wall Street CEOs receiving TARP funds summon the honor to resign? Will this White House ever bother to raise the issue?"

And why does McCotter's answer to his question about the White House getting as tough with Wall Street as it has with Detroit--"I doubt it"--sound so achingly accurate?

Wagoner needed to go. He thought the only way to repair an industry he and his compatriots broke was to break unions, cut wages and shutter plants.

Despite the fact that the United Auto Workers union called more than 30 years ago for a retooling the industry to produce smaller, more fuel-efficient vehicles, despite the fact that union members have accepted deeper cuts in pay and benefits than their foreign counterparts, Wagoner kept trying to balance his books by discharging his most skilled employees and devastating communities in Wisconsin, Ohio, Michigan and other states.

As such, he was a lousy, visionless CEO.

If it took a shove from the Obama administrion to make Wagoner leap with his golden parachute, then more power to the president.

But when will this administration get as tough with Wall Street as it has with Main Street? Didn't they screw up in far more dramatic, and damaging, ways than did Rick Wagoner?

Will this president ever tell brokers and bankers that they are going to feel more pain than just the paper cuts from opening their bailout checks and bonuses?

http://www.thenation.com/blogs/thebeat/422706/print