Monday, March 30, 2009

GM Shakeup

Traders on Wall Street may fret about where to draw a line when it comes to government interference with corporate board rooms. But these traders are wrong on this matter.

President Obama’s move to relieve GM CEO Wagoner from his post is a right move, precisely right signal to Corporate America as well as to Organized Labor. GM continued old ways for too long. Not that Wagoner was a bad person and he did make many honest efforts to change the course. Problem was he was late to that course. Any ordinary person would have broken down with incessant pressure under which his job came in last couple of years. Except going to Congress by plane in the first hearing visit, he has been generally no-controversy, good guy CEO. It is just that ‘good enough’ was not enough for this job. It is the question of ‘accountability’ and removing Wagoner along with the board shakeup is a necessary step. It was grace that Wagoner did not drag his feet in this case (not that any one can dare when a popular president is asking and who also happens to be your last resort for bailout money).

Politics of the move is good and this is one smart symbolic action by President Obama. Unfortunately, it is still a uphill battle when it comes to recovery of auto companies. Hopefully, Administration continues its comprehensive policy so that chances of success are high at the end.

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