Monday, March 30, 2009

Who's in Charge of GM?

The government's ouster of Rick Wagoner at General Motors has dominated the news today. While many good arguments can be made for why Wagoner needed to be replaced, many questions remain regarding the future of governance and leadership at GM. For starters, one has to wonder about the people now calling the shots for General Motors. Mr. Rattner, who is chairing the President's auto task force, has a background in investment banking and journalism. He's never been an executive in charge of a large manufacturing corporation. Secretary Geithner has worked for the federal government for most of his adult life. He's never had an executive role in an industrial firm. Larry Summers held one major private sector executive position, and that did not end very well (his resignation as Harvard President). The President himself has never run a private corporation, nor have many of the key Senate leaders who are involved in overseeing the auto industry bailout. All these men clearly exhibit intelligent and expertise in their particular domains, but one wonders whether they have the knowledge to make key decisions regarding the future of such a large automobile manufacturer. Of course, one might argue that they won't be making those types of detailed decisions; they simply will assemble a new team who will then make the hard calls. However, we do not really know what the level of government involvement will be in strategic choices and day-to-day decisions going forward.