Analysis: Obama tougher on autos than banks
President Barack Obama is dealing with the beleaguered auto industry more sternly than he has with bailed-out banks and insurers as he takes the nation another step into uncharted government regulation of industry.
The decision could leave a lasting mark on his presidency, for good or for bad, in ways reminiscent of Ronald Reagan's battle with air traffic controllers or Harry Truman's showdown with striking steelworkers.
By now, it may seem obvious that the government is playing major roles in running huge corporations, including banks, insurance companies and automakers receiving billions of dollars in federal aid. Yet the message
is still hard to absorb by many unions, retailers and, most visibly, executives who took big bonuses or chartered jets to congressional hearings where they sought the money to keep their firms afloat.
The Obama administration, perhaps reflecting public sentiment outside Michigan, has shown less patience with the auto industry than with other troubled sectors.
General Motors' chief executive, Richard Wagoner, must go, the administration said, workers must make concessions and Chrysler must pursue a merger with Italian automaker Fiat SpA if more government help is to be considered.
The administration is tightening its oversight of bailed-out financial companies, too, but it has generally been more lenient in terms of time, personnel and other factors. Nor has Obama demanded that financial-sector workers and unions make more "painful concessions," although that sector is far less unionized than the auto industry.
Union contracts, it appears, are not as sacrosanct in the administration's opinion as the one it has left intact at AIG, which provided politically radioactive retention bonuses to employees.
The president went farther down the road of federal intervention Monday. He embraced possible short-term bankruptcy and reorganization by Chrysler and GM (Ford is not involved), an idea he had rejected as president-elect in November. Obama even advanced the novel idea of having the government back new-car warranties issued by both GM and Chrysler to reassure buyers nervous about taking a chance on those companies.
"I know that when people even hear the word 'bankruptcy' it can be a bit unsettling," Obama said in his remarks at the White House.
Indeed. But many other events, including plunging job rates and savings accounts, have unsettled Americans even more.
Automakers brought much of this woe on themselves, resisting changes over the years that might have made them more efficient and competitive. Now they suffer from Americans' resentment of bailing out big companies, and from the perception that the once-mighty auto industry is less vital to the nation's well-being than are financial institutions.
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