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Ellen Belcher is the Dayton Daily News opinion pages editor. She writes about state government, education, the environment, higher education and all things Dayton.
Martin Gottlieb is an editorial writer and columnist for the Dayton Daily News opinion pages. He focuses on the political process itself and does such national issues as war, the economy, taxes and Social Security, as well as a hodge-podge of local and state issues.
Scott Elliott is an editorial writer and columnist for the Dayton Daily News opinion pages. He writes about education, city and suburban issues, politics, business, workforce and consumer issues.Home > Blogs > A Matter of Opinion > Archives > 2010 > August > 17 > Entry
Editorial: Feds’ farewell to GM won’t be reluctant
Activism has characterized the federal government for a couple of years now, not since Barack Obama became president, but since Wall Street collapsed in the fall of 2008.
Consistently, the people in power — whether Republicans or Democrats — have decided that a national emergency must be met with energy and power. The banks had to be saved, via a bailout. The auto industry had to be saved. The economy had to be aggressively stimulated.
As a result, a canard is circulating: that the people who are taking these measures are motivated by the desire to expand government and its control over us. The charge is leveled mainly at Democrats, notwithstanding that the bank and auto bailouts predate their ascendancy, and that Republicans favored a stimulus too, just a smaller one.
Sometimes the previous president, a Republican, gets lumped in with the alleged government lovers.
If the federal government now moves quickly to get rid of its majority holdings in General Motors, that won’t silence the critics, of course. We’re talking politics here.
But it will help make the point to anybody whose mind is open even a little that saving GM wasn’t the seizing of an opportunity, but a recognition of the need to participate in a necessary evil.
General Motors announced last week that it had made a profit for the second consecutive quarter — this time for well more than $1 billion. It is adding factory shifts and boosting exports, bringing in needed foreign money at a time when other industries are bringing in less.
And now “new GM,” the company that emerged from bankruptcy, is readying a stock offering. That would be, among other things, a way for the government to unload its share.
The company says it doesn’t want to be known as “Government Motors.” The government says it has no interest in owning a car company. And, of course, the Obama administration relishes a big, symbolic demonstration of the fact that its decision to save GM wasn’t futile, that it “worked.”
With banks mainly paying back their loans, a certain campaign narrative does emerge. Accordingly, some people have worried that the stock sale might come too early, before the market is right for the best return.
That’s a welcome concern to have, given the concerns of last year: that the collapse of the auto industry, especially in this part of the country, could turn the sudden and frightening Great Recession into a depression.
The government has certainly had a role in shaping GM’s new direction, in such matters as the Volt, the new hybrid. But the point was never government control. Quite the opposite. The point is the building of an industry that doesn’t have to turn to Washington for a bailout again.
Nobody knows whether the new GM’s thrust will work in the long run. What’s known is that the company’s old ways weren’t working and that the public wasn’t eager to subsidize them into the future.
If GM — and Chrysler, another bailoutee — do become healthy again, that isn’t a happily-ever-after story. Too many jobs have been lost, too many pensions and health care plans impacted, too many communities devastated by the problems of the Detroit-based auto industry during the last few decades. And what’s emerging is a shadow of former American strength.
But nobody ever said that the government bailout could turn back three decades of history. The point was to deal with a crisis and to shape a plan for future success, a plan that made a lot of sense to people in the business world, not just politicians and bureaucrats.
Permalink | Comments (7) | Post your comment | Categories: Economy, Editorials, Martin Gottlieb
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By joe_mamma
August 17, 2010 8:06 AM | Link to this
How on earth can you say with a straight face that they do not want to control us? They forced GM to introduce the Volt which has to be subsidized to even be in the ballpark of other competitors versions. They are forcing us to buy health insurance (and dictating to us what is an acceptable insurance plan) and attempting to control our energy consumption through Cap and Trade just to name a few… Even if GM goes public and has the largest IPO ever it would likely still generate less than half of the dollars necessary to payback what they owe. GM still owes about $50 billion. The largest IPO ever in the US was VISA for $17.9 Billion. Spin it anyway you want Martin but the government is going to have its hooks in GM for a very long time. And yes companies are heavily influenced by people they owe money and their livelihood to. And our politicians are not very good at keeping their hands off business and the citizenry. Also… there are plenty of banks that are having A LOT of trouble paying back TARP. www.bizjournals.com/washington/breakingground/2010/06/treasuryreportsayssmallbanksnotrepayingtarp.html
By bobby
August 17, 2010 9:08 AM | Link to this
This editorial fails to mention the announced change of CEO at GM and the administration’s push for an IPO. WSJ 8/13/2010. “Mr. Whitacre’s departure, however, was announced as some tension was building between the company and Washington , people familiar with the matter said. The Obama administration would like GM to hold a stock offering soon, perhaps before the midterm elections in November, while GM has not committed to such a timetable….The U.S. is expected to sell 10 billion $ of it’s shares in the company in an IPO…Last week Mr. Whitacre publicly expressed a preference for taking more time to prepare a stock offering, and have the government sell a major stake in the company so that GM can shed the image of being on government support.”… Could this be seen as “seizing an opportunity”?
By davidss2
August 17, 2010 9:39 AM | Link to this
“The point was to deal with a crisis and to shape a plan for future success, a plan that made a lot of sense to people in the business world, not just politicians and bureaucrats.”—————-Is marty trying to say that the Bush administration did the RIGHT THING at the end of his term passing the torch to the purchaser of the election? Amazing…
By Ralph
August 18, 2010 8:13 AM | Link to this
Joe is dead on. An IPO of GM wouldn’t even begin to make a dent in the $50 billion of debt currently held by “big brother.” Banks continue to struggle and people are unemployed and under employed en masse. Liberal elitists like Obama and Gotleib continue their litany of big government and wonder why people think that they are out of touch. GM should have festered and rotted away. Most of those union jobs have left the country years ago for Mexico. Now the same liberals who glad handed the unions all those years (who brought down GM in the first place) are snuggling up to the illegal aliens from Mexico. It never ends with these Liberals!
By Talking Point Memo
August 18, 2010 9:13 AM | Link to this
Marty is just setting the stage for the government’s role in bailing out newspapers such as the DDN. He will say such things as jobs need to be saved…That’s why he and the Cox Media get their talking points straight from Obama & Company…They want to be on the “good” side of the admin. This way Marty and his buddies can keep their fat salaries at tax payers expense.
By bobby
August 18, 2010 2:56 PM | Link to this
The GM IPO is now in motion, with stock to be listed on US and Canadian exchanges. Political opportunity has been seized.
By davidss2
August 20, 2010 9:20 PM | Link to this
Based on some reading I’ve seen, the IPO is being pushed early for GM and the taxpayers to get maximum benefit. The push for publicity now is to try to help the desperate Democrats and BO try to say they’ve done something for the November elections. Otherwise all they’ve got is the healthcare which now is admitted to be going to cost a BUNDLE. They lied while they were trying to push it through. The Republicans were RIGHT. Now the dems are pushing the IPO. The newspapers are going to try for subsidies. Let them die. That’s what should have been done for the unions in GM and C. The bankruptcy should have been complete but government controlled just to get rid of the unions. The UAW is going to kill US autos again.