Monday, June 15, 2009

Only 1 of 100 CEOs Running GM (Government Motors)

Rep. Barney Frank, chair of the House Banking Committee, says his successful intervention to keep a General Motors distribution center open in his Massachusetts district isn't evidence that Congress will have undue influence in running the new 60% government-owned auto company.

"I don't think this will lead to a pattern," Mr. Frank assured The Hill newspaper last week after word spread that his phone calls had secured a new lease on life for a GM facility in Norton, Mass.

The Obama administration has repeatedly said decisions by the new GM will be made by its executives without undue government influence. But influence doesn't have to take the form of overt orders from the White House to be "undue," as Mr. Frank's calls to GM CEO Fritz Henderson showed.

Mr. Frank says his involvement isn't likely to be replicated because the facility he went to bat for wasn't an auto plant or a dealership. He said keeping the distribution center open was environmentally sound because otherwise auto parts would have had to be trucked to New England from a facility in Philadelphia. Mr. Frank also waved off a suggestion that the episode proved that rules are needed to stop lawmakers from jawboning to keep plants or dealerships open.

"I can't make the connection" that would give the justification for such rules, Mr. Frank cheerfully says. After all, he added, he didn't call the Obama administration to keep the Norton facility open, but instead went right to GM management.

Hmm. That's an argument that disproves any hope of GM being run in a "nonpolitical" matter. On the contrary, the administration might have to intervene regularly just to protect the company from 535 legislators. GM Chief Henderson is hardly in a position to ignore requests from powerful committee chairmen like Mr. Frank, because GM will never be done needing government favors, from tax rebates for car buyers to fine-tuning of mileage rules.

-- John Fund

Of course, we've all heard Pres. Hopey-Changey say that HE has no interest in running a car company. He'll just let his minions do it.

NEXT UP: Health care.

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