Tuesday, April 27, 2010

Chapter 20. Quite Frankly, Fess Up

In General Motors' recent television ad, first-year CEO Ed Whitacre proudly states that GM has "repaid our government loan, in full with interest, five years ahead of the original schedule..."  President Obama repeated this report during his subsequent Weekly Address.

There has been a lot of reaction to GM's claim, mainly simple common sense about a company that is still operating in the red; still has several tens of billions of taxpayers money, and is still majority owned by the government.  The general consensus is, the "repayment" is a shell game using even more taxpayers' dollars.

But one part of Whitacre's commercial is especially galling: 
"A lot of Americans didn't agree with giving General Motors a second chance.  Quite frankly, I can respect that."
That tidbit of condescension comes from a man who is drawing a $9,000,000 salary for running a company of which the government owns 61%, and whose stock (no longer GM, but Motors Liquidation, symbol MTLQQ.PK since the company is still in receivership) has dropped nearly 50% since Whitacre took over as Chairman. 

"Quite frankly," he starts.  Quite frankly, as if the opinion of the American taxpayers, the ones who funded and continue to fund extravagant bailouts, might not have a valid concern about giving GM the money and thus need Whitacre to ground the conversation in seriousness.  As far as "I can respect that," who cares what Ed Whitacre respects or doesn't respect?  The fact is, the bailout happened despite the disagreement of "a lot of Americans."  Whitacre's respect is immaterial, but it's nice to get a gentle pat on the head from a multimillionaire now and again.

Whitacre doesn't seem to be a bad guy, and may turn GM around and get it back to profiability, no doubt a steep uphill climb.  For the sake of beleaguered Detroit, let's wish him well.

But, American taxpayers deserve to have a transparent view into their "investment," not silly and contrived fairy tales about Imperial clothing.

Quotient out.