“Watching the president of the United States effectively fire the chief executive of General Motors Corp. unnerved some other CEOs, who said the move crossed a troubling threshold of government involvement in the economy. But other executives said the government acted reasonably in removing Rick Wagoner.
“We know they’ll oust a CEO. We know they’ll change the board. Will they dictate terms of the union contract? And do you have to call your congressman to get a car?” asked James E. Rogers, chief executive of Duke Energy Corp.
Mr Rogers said ousting Mr. Wagoner as GM’s CEO raised questions about whether there are any limits to government action at companies that accept government money.
Mr. Rogers, and several other CEOs, said GM should have been allowed to restructure itself under bankruptcy protection, which could still happen.” [via WSJ]
I don’t understand here Roger’s argument and every single CEO quoted in this story. When you a have company beg the federal government for billions of dollars of bailout money there are always strings attached. GM begged for and received over $16 billion dollars, a figure significantly larger than the total market capitalization ($1.65B to be exact) of equity in the company. The real question I’m interested in is, how can these CEOs justify the pretension to remain at the helm of their companies after running them into the ground? In the case of Rick Wagoner – how did the man sell bonds to bond holder with a clear conscious. Look folks, Bernie Madoff was good at his ponzi, but was definitely a rank amateur compared to these guys.