With General Motors Corp. having joined Chrysler LLC in government-orchestrated and -financed bankruptcy, one question stands out: Can the restructurings proceed without major political meddling in what ought to be business decisions?
Even the optimists have to be worried on this front. Meanwhile, the answer to a related question -- whether the restructurings can happen without
accusations of political chicanery -- is already in. Of course they can't.
In the weeks since Chrysler announced plans to cut nearly 25% of its 3,200 dealerships, allegations have spread across the blogosphere that the Obama administration played politics in deciding what dealerships to save and which ones to ax. The talk,
which was summarized nicely by Mark Tapscott in the Washington Examiner, centers on blogger claims that cut dealers contributed disproportionately to GOP candidates.
The blogs note that Rep. Vern Buchanan, R-Fla., lost a dealership his family owns, but a chain in the Midwest co-owned by Mack McLarty, former Clinton administration chief of staff, and Democratic heavyweight Robert Johnson lost none.
The talk grew loud enough that apparently the White House felt a need to respond. Press Secretary Robert Gibbs
told reporters Thursday "we don't make those decisions. ... Chrysler makes those decisions." He said the job of picking individual dealerships for closure (not to mention individual factories) is the job of the companies, not the government.
We'll leave it to the political pundits to decide whether Gibbs would have been better-served to ignore the talk instead of addressing it. And for the record, Chrysler restructuring sources speaking on background back up the White House's claims that the task force was not involved in individual dealer decisions.
But like it or not, politics is an inseparable element of this story. Ever since last fall, when Chrysler and General Motors Corp. (NYSE:GM) first went to Washington seeking help, politics have played a central role. Michigan Republicans who blasted the bank bailout called saving the automakers our patriotic duty, while senators from the South preferred to let these companies succumb to foreign competitors who just happen to be building plants in their home states.
The Bush administration in its final days eventually granted GM and Chrysler just enough aid to get them to the inauguration, pushing the problem to the newly elected. President Obama and his aides have said time and time again that they would prefer not to have been put into the position to oversee the industry's restructuring.
Now that they are in that position, they're going to have to work hard to show that they not only intend to keep the process clean (as they are doing Monday morning by announcing the principles that will guide the GM project), but that they can pull it off.
- Lou Whiteman
Lou Whiteman is a senior writer covering the automotive, transportation and industrial sectors. Follow him on Twitter @louwhiteman
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