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Political News and Commentary from the Right

“I don’t know anything about cars.”

So said President Obama’s new Chairman of the Board of Uncle Sam’s newest acquisition, GM.  Edward E. Whitacre, Jr went on to say “A business is a business, and I think I can learn about cars.”  Under that premise, a successful hot dog vendor on the streets of New York could lead the board for the bankrupt money pit American taxpayers just invested in.

Whitacre retired from AT & T in 2007 after 44 years with the company.  Though the last 17 years he served as CEO and Chairman of the Board at the telecom company,  his first job at what was then Southwestern Bell was setting fence posts.  Without a doubt, he started at the bottom and worked his way to the top. But telecom analyst Victor Schnee calls his appointment to lead GM “bizarre.”

White House Press Secretary Robert Gibbs explained, “What was required was somebody with savvy, big-business experience that could take a company, change its management culture, make some of those tough decisions to put it on that path toward viability.”  But how does Whitacre’s experience at AT & T compare to that required to turn around the new Government Motors?

At AT & T, he started with the smallest of the “Baby Bells” and gobbled up its competition in mergers to create the largest US telecom company.  Along the way, competitors cried foul, accusing the ever-growing AT & T of using its might to price them out of business and ignoring regulations smaller companies had to abide by.  In reference to a 2001 complaint filed by the Competitive Local Exchange Carriers (CLEC) Association of Michigan, then CLEC-MI president Brad Kruse said “Companies are limited in the service they can provide in Michigan because of SBC/Ameritech’s (now AT & T) actions, and the pace of competition is slowing.  SBC/Ameritech is unilaterally setting telecommunications policy in Michigan, disregarding the rulings of regulators and the policies set by legislators alike, while blocking competition.”

Could this be exactly what the administration seeks for GM?  A go-for-the-jugular Government Motors bent on crushing competition.  Might we see the taxpayer-bought-and-paid-for bankrupt company buy out the smaller Chrysler then use its government backing to try and drive Ford Motor Co. (Which by the way is the only American auto company that didn’t take a taxpayer bailout.) out of business?  If so, and if successful, Obama will have accomplished the nationalizing of the entire American auto industry!  Why else would he choose a Chairman of the Board who, in his own words, doesn’t know anything about cars?

Could the administration’s motivation have been political?  Mr. Whitacre made a lot of political contributions in the ’08 election cycle, mostly to Republicans.  But one donation, in February of 2007, might raise an eyebrow when one’s asking how Whitacre was chosen for his new job–$1000 to Rahm Emanuel, President Obama’s current Chief of Staff.  The natural question is, what would cause a Texas Republican to donate to the campaign of a Democratic Congressman in Illinois?  On the same day Whitacre made his suspicious donation, AT & T’s COO Randall Stephenson also contributed $1000 to Emanuel’s campaign.  Coincidence?  Maybe.

On May 1 of this year, the Wall Street Journal reported that Emanuel has taken a lead role at the Treasury Department and if “Rahm wants it” it’s almost certain to happen.  Just a couple of days ago Kevin Hasset, in a piece on Bloomberg, opined that he believes Obama’s plan is to put policies in place that drive every American business to need a bailout, and then “Rahm Emanuel can stack the boards of all of our companies with his political cronies.”  Perhaps the idea that Whitacre’s appointment, who knows nothing about the auto business by his own admission, to head the new Government Motors is political payback by Rahmbo isn’t so far-fetched.

In either case, if Obama’s seeking to completely nationalize the entire auto industry with the “Kingpin” of the telecom industry or if Rahmbo made the call to pay off a favor, the fact that Whitacre steps into the limelight announcing he knows nothing of the business doesn’t allay my fear that this “investment” is going to be one big boondoggle.

But maybe every GM car will come with a new AT & T phone.

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June 11, 2009 - Posted by | Bailout, Obama | , , , , , , , ,

2 Comments »

  1. very good thanks

    Comment by kars | June 13, 2009 | Reply


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