No one in Washington, and only a handful of Wall Streeters, understand what credit default swaps are. That’s why the Wall Street Journal writes, “Officials have in the past considered removing [Citigroup Inc.] CEO Vikram Pandit, but demurred, in part because of the paucity of candidates to replace him, people family with the matter say.”
But everybody—especially at the White House—understands cars. There’s nothing to it at all. The internal combustion engine is a thing of the past! Cars of tomorrow will run on electrical current that’s generated by the beating wings of migratory warblers! Now that the government is in the business of manufacturing, marketing, and selling cars, it’s nothing at all to shuffle around the suits in the executive suites. Except that they’re no longer called suites but “INCARceration faCILItation AreaS (INCARCILIAS).”
Nevertheless, the Administration’s sweeping him aside over the past weekend was a breathtaking, almost Leninist display.
Now Fritz Henderson is the guy, and here’s hoping he can hold fast to his ankles for as long as it takes to be sufficiently instructed in viability by the automotive task force. (Isn’t the acronym ATF reserved for Alcohol, Tobacco, and Firearms—something else that, like the auto industry, tends regularly to blow up?)
I’m presently listening by telephone to Henderson’s press conference. How, asks the Financial Times, will GM be different?
Henderson replies: “I have actually worked for GM for 25 years.” Little Ricky is his mentor, he says. This is a sad time at the company. Henderson and Little Ricky have similar backgrounds, including speaking Portuguese. But it’s necessary to reinvent GM in the next 60 days while the government provides emergency funding “so that we are not spending our time careening from crisis to crisis.” Henderson recognizes similarities to 1998, when things looked terrible. But today’s is a broader scale problem compared to then. The objectives are very clear. GM will succeed, whether success is accomplished in or out of court. [By this point, he has already has stated his distaste for bankruptcy, which can take too long and do lots of damage, being “fairly sloppy and value destructive”; besides which, who’s aware of an auto company ever emerging successfully from bankruptcy?]
Well, I don’t care how viable their plan looks to the automotive task force and the chairman of the Council of People’s Commissars, er, President Obama. I don’t care about all the supposed promise of the Chevy Volt, the unproven hybrid car that you’d be nuts to buy at the projected price of $40,000. And the other technologies that GM keeps referring to—Flex Fuel engines, fictional hydrogen propulsion systems—are meaningless. What can be counted on is that the tastes of the buying public have changed and it’s unlikely GM will ever recapture those purchasers or to entice new ones. Buick and Pontiac are worthless nameplates, and if people aren’t buying trucks any longer, then Chevy and GMC (the two largest divisions) will continue to flounder.
It will be left to Washington to pile on the incentives through tax policy. And when that strategy fails, look to incur penalties for not buying from Government Motors.