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Technology Stocks : American Automobile Industry: Can it survive?
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From: TimF10/30/2009 7:02:02 PM
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”When GM Took Federal Dollars, They Lost Some of Their Autonomy”

Jonathan H. Adler • October 30, 2009 12:36 pm

Does government interference inevitably follow government ownership of private companies? It sure seems that way. As a WSJ article reports: “Companies in hock to Washington now have the equivalent of 535 new board members — 100 U.S. senators and 435 House members.” Specifically, the story reports on efforts by various lawmakers to inflence the business decisions at GM. The story begins:

Montana Rep. Denny Rehberg was no fan of the $58 billion federal rescue of General Motors Co., saying he worried taxpayer money would be wasted and the restructuring process would be vulnerable to “political pressure.” Now the lawmaker says it’s his “patriotic duty” to wade into GM’s affairs.

Along with Montana’s two Democratic senators, the Republican congressman is battling to get GM to reinstate a contract with a Montana palladium mine nullified in bankruptcy court. “The simple fact is, when GM took federal dollars, they lost some of their autonomy,” Mr. Rehberg says.

And later in the story:

“I was elected to represent the interests of Montana, not General Motors, which is something that GM should have considered before letting the federal government assume control of their company,” Rep. Rehberg said recently.

Alas, this is but one of many tales of political interference in the once-proud automaker’s affairs detailed by the WSJ, many of which involve efforts to save politically connected auto dealerships. Stuff like this doesn’t make it likely my next car will be a GM.

volokh.com
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