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March 30, 2009

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Fred

The US government practically own GM as it is "saved" by government bridged loan last December. The board of directors will be replaced by the government appointed members. It is similar to AIG being rescued by US treasury last September. The first thing to go is the current CEO. This is a problem left over by Bush who does not have the gut to solve it (let it go bankrupt) last year when GM ran out of Money. Obama is taking the bitter pill and do the inevitable which is take over the company and send GM to "packaged bankruptcy".

All of the 42 banks that FDIC took over last year and this year had their CEO replaced by the government so force CEO resign is not the big news. What is new is that auto industry has not been regulated as much as banks and government intervention is rare in their history.

However, if these companies does not ask for Tax payer's money, the US government has no interest or power to ouster the CEO of GM. Now GM owes the Government 16 billion dollars. That is one of the reasons why Ford does not want any part of this financial aids. When you owe money, unless you could repay the money at any time, you are at the mercy of the lender when they decide to call the loan. This is a pure capitalism at its worse.

Tze-Chien Chu

So, GM is now Nationalized...
AIG is also Nationalized 那就承認ㄚ 拿錢不拿錢那是債權債務的關西 不是董事會或是管理上的關係 因此美國政府應該很坦百的承認 她們要接管GM or AIG.

Tze-Chien Chu

解決經濟危機不需要Guts.
況且要麻就是國有化 要麻就是認市場解決問題 目前為止歐巴馬只是半調子的處理 更糟 看著辦吧 國有化會更好 哈哈哈哈

Tze-Chien Chu

上次看Discovery介紹肥胖的手術處理 把胃弄小剩下1/3 or 1/4 然後把胃接到小腸的後段 這樣之後你還是可以亂吃 然後不會變肥
或許美國經濟也需要這樣的Inovation吧 才能繼續過像之前一樣的生活

Fred

Only history will tell who make the right decsion at what time. The famous GE CEO Jack Welch said "Strategic decisions are made straight from the guts". I tend to agree with him as he was a very sucessful CEO. In a competive world, the brain power is about the same for all the top leaders (yes, Bush is not stupid). However, whoever is smart and have the guts to make the right decision will win in the long run.

Thinking forward, a large part of the population in the world will reach a standard of living similar to the US or Europe in 2050 with innovations that is beyond our imagination today. I hope I will get to see that day! 40 years is more than 1 generation, people will forget about econmic crisis of 2008-2009 by that time.

Tze-Chien Chu

如果歐巴馬要開除CEO 那麼下個CEO是不是也會備歐巴馬開除? 問題在這邊?那麼誰是公司的經營者呢?

Fred

You got confused with the ownership of a company and the management of a company. The debt holders are currently the owner of the company as they hold more debt than the total equity (stocks). The managers (CEO, CFO...) are the one who run the company according to the direction of the BOD (board of directors), which constitutes of all of the stake holders.

Unfortunately for GM, the largest stake holder is the US goverment at this time so the manager can be fire or hire as the president and his car zsar team see fit.

Ultimately, the goverment is taking the full responsibility for GM which is a good thing for the employees and suppliers. It is a huge political risk for president Obama if the rescue plan fails as he will be the one who got the blame in the next political cycle.

Tze-Chien Chu

So,GM has offically bankrupt ? And all the stock holder's right is gone ? So all debt has transfer into stock ? or maybe something in the contract say US.gov can do that.
All I know is no nationalized GOV will operate better .
If natinolization is a protection then why other un-employee people's firm don't get protection. (too small to protect) (too big so to protect)
It is not a fair policy.
But anyway, maybe after nationalizd everyone can get a free GM car , hahahahaha.

Tze-Chien Chu

一個擁護自由市場的國家做這樣的事很好笑就是了 不過說一套作一套本來就是人之常情 而這也是失敗的開始

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