The new CEO

Obama’s firing of G.M.’s CEO reeks of a politically-motivated PR move.

President Gerald Ford told America in 1974 that, âÄúA government big enough to give you everything you want is a government big enough to take from you everything you have.âÄù President Barack Obama likely didnâÄôt hear that speech. The president made a move last week that threatens every private institution and every employee in America. The underhanded request by the administration for General Motors Corp. CEO Rick Wagoner to step down was not only handled poorly and out of the public eye, it also constitutes an egregious violation of the presidentâÄôs authority. This is just the start of ObamaâÄôs unrealistic expectations and goals set for the teetering auto industry, hoping that car companies will not only become financially independent, but that they will start selling more fuel efficient cars on a wider level. There are underlying factors that Washington continues to ignore that have led to GM and ChryslerâÄôs inability to stay afloat, and one factor is the powerful unions. It would be political suicide for Obama to request the unions (the same unions that gave him millions in campaign contributions) to agree to lower their pay down to levels of, say, Toyota workers. The New York Times reported that the United Automobile Workers Union would grant concessions to lower GMâÄôs labor costs by $1.1 billion. Nevertheless, GM management and the U.A.W. havenâÄôt come to an agreement on how to reduce the $20.4 billion GM is required to pay in health care costs for retirees. This is an issue of demand for GMâÄôs product. New York Times columnist David Brooks notes GM has been restructuring in some capacity for several decades, with little success in really improving its financial situation. The consumer may have a problem with the vehicles or the brand image, but the fact is that less people are buying its products. Government could save GM if it just bought thousands of vehicles the company didnâÄôt need next week. When nobody buys, there is no business. When there is no business, there is no need to employ so many workers and keep open so many expensive plants. Cost cutting will lead to job losses for a company, whether it is in bankruptcy. Obama ought to offer help to employees who will eventually lose their jobs instead of trying to keep the company afloat. University of Maryland economist Peter Morici explains that the auto bailout failure is a public relations problem for the Obama administration. This public relations problem requires a visible and public solution like firing Wagoner. ObamaâÄôs solutions arenâÄôt bearing fruit, so what better answer than to use a backdoor firing as a springboard for another grandiose speech about the change? Michigan Republican Congressman Thaddeus McCotter insists Wagoner is a victim of a double standard because Obama has yet to demand resignations from any TARP recipients on Wall Street. This administration does what is politically beneficial. Indeed, since the election, I often ask myself, âÄúWhat if Bush did this?âÄù LetâÄôs imagine President George W. Bush had appointed one of his subordinates over at Treasury to have a mid-afternoon meeting with the head of GMâÄôs union on Friday (after the media had gone home for the weekend) and asked him to resign. Outrage wouldnâÄôt describe properly the public reaction. Obama has announced the feds will back up warranties for these car companies in an attempt to restore consumer confidence. I donâÄôt know about you, but I donâÄôt feel too confident about Vice President Joe Biden checking my breaks and changing my oil. (On that note, I encourage all of you to call the White House and ask for Barack Obama or Joe Biden for your car warranty needs: 202-456-1414.) The larger economic questions of the firing are even scarier. Have we reached the end of separate private and public institutions? At what point does this executive power end? If Obama doesnâÄôt like the latte at Starbucks, will he request the manager step down? Obama promised an open and honest policymaking process, but I donâÄôt remember any public input on giving the president authority to pressure private companies into complying with anything, no matter what the circumstances. But this sort of government intervention is not unprecedented. In 1952, the Supreme Court ruled President Harry TrumanâÄôs attempt to nationalize the steel industry unconstitutional. President Ronald Reagan solved the dispute between the Air Traffic Controllers Organization and the airline industry after more than 12,000 air traffic controllers walked off the job. Reagan issued a statement saying that that striking air traffic controllers were in violation of the law, and that they would be terminated if they didnâÄôt report back to work. This turned out to be a successful strategy. CEO Wagoner got thrown under the hope and change express bus last week in order to keep ObamaâÄôs agenda on track. The problems at GM and other U.S. auto manufacturers cannot be solved by public relations moves. It would take years to improve the auto industry. Americans should deplore the policy of propping up insolvent, failing industries. Andy Post welcomes comments at [email protected]