Government crossed the line in GM moves

Bob Jack, North Las Vegas

Friday, April 3, 2009 | 2:04 a.m.

The intrusion of the Obama administration into the internal affairs of General Motors is a harbinger of things to come. Government clearly crossed the line in firing Rick Wagoner, the CEO of GM. This is not the America that I grew up knowing and loving.

I am a proponent of allowing market forces to drive GM and Chrysler into Chapter 11, where they would be subject to reorganization (not liquidation) under bankruptcy judges. I am not opposed to government financial assistance while the automakers are in bankruptcy in the form of warranty guarantees and debtor-in-possession financing to help these companies enter a new day in which they can effectively compete and survive in the marketplace.

There is no question these entities have to reinvent themselves to meet the market challenges ahead. The bailout of the banks occurred because the government perceived this industry to constitute a “systemic risk” to the economy — one which, if it failed, would bring down the entire economy. Not so with the U.S. auto industry in the minds of the administration; ergo, the financial system is rescued to an extent the auto industry is not.