Tag: mediocrity

Nationalizing General Motors

It looks like GM is going to be nationalized, but with a twist. Because we can’t bear to say the S-word (Socialism) in America when the taxpayers start funding a private company, the incompetent management is likely to be retained and given more money to burn. Readers of the business pages may recall that the GM CEO was given a vote of confidence by the board just a few months ago, and so this bozo expects to retain control of a company that is too distressed even to file for bankruptcy protection.

The Wile E. Coyote moment never seems to come for incompetent US top managers. They continue to defy the laws of economic gravity because their spin control is so highly perfected that it functions as a levitation mechanism. I wonder how much longer the taxpayers will be willing to provide unlimited funding to companies led by idiots? Here are some practical measures the Obama administration should consider when it takes over a private company:

1. Conduct a thorough post-mortem on the management decisions leading to the business failure.

2. Remove all managers associated with poor decisions revealed in step 1.

3. Hire replacement managers with proven records of business turnaround execution.

4. Reclaim all past bonus compensation paid to managers associated with a failed company for the last five years.

5. Restructure the business model of the failed corporation to address shifting national priorities. (E.g., GM should start making rail cars and trolleys, in addition to fuel-efficient cars).

6. Introduce a high degree of transparency into the financial records and management deliberations of the nationalized company. All key decisions and their supporting documentation should be visible on the Internet. A taxpayer-funded company should be accountable to the taxpayers.

7. Put private citizens and worker representatives, with no connections to existing management, on the board of every taxpayer-funded company.