The New GM: Five Political Challenges

More

The economists and business writers will evaluate the GM restructuring with authority. From our vantage point, here are five political questions that the administration will no doubt be challenged by over the next few months.

1. Convincing the country that this restructuring -- and they'll call it a "restructuring" -- is an inevitable consequence of a process that began during the Bush administration. So far, the public seems to believe this, but the longer the government fiddles with the industry, the more Obama will be seen as the fiddler.

2. There is "an inevitable tension" between taxpayer protection and the length of the government's ownership, an administration official told reporters last night. Put plainly: the longer the government owns GM, the better the chance that taxpayers will see the money put in GM recouped. (BTW: Bankruptcy is scheduled for "60 to 90 days." It will most certainly take longer, perhaps even into 2010.)

3. In big companies with unions, it's not possible, really, to go through an orderly bankruptcy without involving the unions. The challenge for the administration: explain to Americans why the unions deserve the concessions they're getting and sell the concept that UAW has already given up a lot. So far, the public, in an anti-corporate mood, is OK, but I suspect that since this issue still hasn't forced itself to the forefront of the public attention span, the public hasn't been given the chance to evaluate the deal on fairness terms. 

4. How hands-on will the government be? In theory, it'll leave all but the corporate governance decisions up to GM -- the nameplates to end, the dealerships to close, the shops to keep open etc -- but in practice, the government will have veto power, and will have the ability to help appoint a corporate board that reflects Obama's view of the economy.

5. What's happening to my warranty? No doubt that GM car owners will want to know the answer. The media will help by giving the government's answer: nothing. It's still valid. But there are lots of other consumer questions, like -- when GM closes dealerships and service centers and when associated manufacturers shut down, will it take longer -- and cost more -- to fix my car? The answer is: yes. (Here's a great Q and A on this subject.)

Jump to comments
Presented by

Marc Ambinder is an Atlantic contributing editor. He is also a senior contributor at Defense One, a contributing editor at GQ, and a regular contributor at The Week.

Get Today's Top Stories in Your Inbox (preview)

Why Are Americans So Bad at Saving Money?

The U.S. is particularly miserable at putting aside money for the future. Should we blame our paychecks or our psychology?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Politics

Just In