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The President of the United States: Auto Industry Analyst

March 30, 2009

I found the following passage from President Obama’s remarks on the U.S. auto industry striking:

It’s with deep reluctance but also a clear-eyed recognition of the facts that we’ve determined, after careful review, that Chrysler needs a partner to remain viable.  Recently, Chrysler reached out and found what could be a potential partner — the international car company Fiat, where the current management team has executed an impressive turnaround.  Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to build — building new fuel-efficient cars and engines right here in the United States.  We’ve also secured an agreement that will ensure that Chrysler repays taxpayers for any new investments that are made before Fiat is allowed to take a majority ownership stake in Chrysler.

When did the President of the United States start making evaluations about the appropriateness of potential merger partners for private companies, the strength of such merger partners’ management, the value of their technology, their product mix, the best locus of production, and the priority of different tranches of their debt?

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I guess at the same time he started picking their CEO’s and having the United States guarantee their warranty terms.

The White House press office cannot even bring itself to quote the concluding sentence in the remarks about GM: “Let me be clear: the United States government has no interest or intention of running GM.”

Sure… as long as GM (and others) do exactly what the administration wants.

Businesses (and citizens) of the United States should consider Gerald Ford’s warning that “A government big enough to give you everything you want is a government big enough to take from you everything you have.”

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