Now Congressmen are doing what they do best, looking out for their constituents by interfering in the companies' restructuring efforts. The latest example is by that paragon of Congressional virtue, Barney Frank, "who intervened this week to save a GM distribution center in Norton, Mass. The warehouse, which employs some 90 people, was slated for closure by the end of the year under GM's restructuring plan. But Mr. Frank put in a call to GM CEO Fritz Henderson and secured a new lease on life for the facility.
Mr. Frank's spokesman, Harry Gural, says the Congressman discussed, among other things, 'the facility's value to GM.' We'd have thought that would be something that GM might have considered when it decided to close the Norton center, but then a call from one of the most powerful Members of Congress can certainly cause a ward of the state to reconsider what qualifies as 'value.'
A CEO who refuses the offer can soon find himself testifying under oath before Congress, or answering questions from the Government Accountability Office about his expense account. To that point, Mr. Henderson spent Wednesday with Chrysler President Jim Press being castigated by the Senate Commerce Committee for their plans to close 3,400 car dealerships. Every Senator wants dealerships closed in someone else's state."
So our new industrial policy looks exactly like the old industrial policy of governments that own large businesses. The ink's hardly dry on the takeover documents before business decisions are subject to political interference at every level. Welcome to Government Motors.