America’s “overhaul” takes despotic path as Detroit auto makers’ fate determined in Nicorette-filled back rooms of WH

I posted on the WH/Congressional tag team to control America’s auto industry back on Mar 27th. Obama and his know-nothing auto czars dictating terms, leadership and production to the auto makers, and Congress closing the deal with onerous legislation including increased fuel standards, and an attempt to mandate 80% of vehicles made and sold in the US must be Flex-fuel Vehicles.

Yet days later, more disturbing details emerge about the dealings that went in on the smoke-filled Nicorette-filled backrooms of the White House that sealed the fate of not only Chief Executive Rick Wagoner, GM and Chrysler… but perhaps have laid the groundwork for America’s “remaking” by seizing control – piece by piece, regulation by regulation, and bailout by bailout – of private enterprise.

WSJ’s Monica Langley and Neil Boudette shed more light on behind the scenes meetings today.

Inside a windowless, ornate room Thursday just across from the Oval Office, President Barack Obama and a group of senior economic advisers began the job of remaking the American automobile industry.

The first order of business: Oust General Motors Corp. Chief Executive Rick Wagoner.

It “wasn’t the hardest decision,” said one government official.

Steven Rattner, a former investment banker who is heading the administration’s auto restructuring; chief economic adviser Lawrence Summers; and Treasury Secretary Timothy Geithner were among those gathered around the polished wood table of the Roosevelt Room in the White House’s West Wing. They were there to decide under what conditions the government would continue to prop up once-powerful Detroit car companies GM and Chrysler LLC.

~~~

Beyond seeking Mr. Wagoner’s resignation, the officials also gave failing grades to GM and Chrysler for the restructuring plans they submitted to the government Feb. 17. They also set a deadline — one month for Chrysler, two months for GM — after which the government might force a bankruptcy restructuring of both companies and break up two of America’s business icons.

[Mata Musing: Be sure to check out our Missy’s stellar contribution to even more nefarious threads woven… ala the financial conflict of interest between Rattner and Chrysler’s owner, Cerebus Capital. H/T girl.]

What stands out is the “audacity” of a Presidential administration, and a panel of auto czars completely clueless about the auto industry in general, being able to assume the tasks of restructuring a distressed private enterprise that would normally fall under the jurisdiction of a bankruptcy court trustee. Apparently, the costs to accept government money are high indeed… ceding not only financial demands, but leadership and production authority as well.

On Sunday, the Obama administration lined up conference calls with key lawmakers. Mr. Obama made one call himself to some of the Michigan delegation, including U.S. Sen. Carl Levin and his brother, Rep. Sander Levin, and Michigan Sen. Debbie Stabenow. He told them that he planned to put some administration staff into the Detroit companies, according to one person familiar with the situation.

White House economic adviser Mr. Summers led a conference call at 8:30 p.m. Sunday with lawmakers who had expressed strong interest in the auto bailout. At one point during the call, Mr. Summers told lawmakers the administration was pushing for the Fiat-Chrysler deal to include “building an energy-efficient vehicle in this country,” Sen. Bob Corker said.

The NYTs also confirmed that Wagoner was only the first to go yesterday:

Along with Mr. Wagoner’s ouster, the task force said most of the company’s board would be replaced over the next few months. In a statement Monday, Mr. Wagoner said he had been urged to “step aside” by administration officials, “and so I have.”

Evidently not only are board members about to get the axe, they are to be replaced by some Obama insiders.

This decision to “put some administration staff into the Detroit companies”, on top of demands to tie bailout funds to specific production models of cars that suit Obama’s satisfaction, should make one extremely queasy. But that nausea heightens when we also find out that Carl Levin was as surprised as anyone to find out about the administration’s meddling in GM personnel.

President Obama didn’t want any advice from Congress on the decision to ask GM CEO Rick Wagoner to resign, according to Carl Levin (D), Michigan’s senior senator.

“He didn’t ask us about it, he informed us,” Levin told reporters in a conference call Monday afternoon. “The president said he’d already decided.”

Levin said he and three other lawmakers were informed of the decision in a phone call Obama made from the Oval Office. Obama told the members of Congress that Wagoner needed to resign so that the administration could show the public it was making an effort at a fresh start with helping the auto industry, according to Levin.

Levin repeatedly described the decision as “sad,” and noted that Wagoner had given a lifetime of service to GM. He praised Wagner’s willingness to voluntarily “retire” from his post, and did not say whether he disagreed with Obama’s decision.

~~~

Levin did not directly criticize Obama’s decision, but did say there is a “double standard” in the treatment of U.S. automakers and the financial industry, which has received tens of billions more in aid from taxpayers. “It’s something we’ve got to fight and overcome,” he said of Michigan lawmakers.

Apparently, the Obama administration – in it’s utter arrogance – doesn’t even feel the need to consult with Congress when seizing government control over private industry.

What’s also disconcerting is that these back room deals took place five days before the GM/Chrysler deadlines to submit their restructuring plans. Sight unseen for their proposals, Obama and his auto czars made an executive decision to restaff GM according to their whims, and quietly set about dictating a production model agenda.

And I repeat… without nary a whisper to Congress, or even Michigan’s senior Senator.

Audacity, indeed.

The O’faithful – willing to turn a blind eye and give this POTUS authority which I can only assume they fail to comprehend – defend such tyrannical government control by claiming public ownership via the bailout funds. This, of course, is because the government is not trying to seize *their* personal enterprises. But as the Martin Niemller quote goes… “First they came for the Communists but I was not a Communist so I did not speak out. ….”

So far the O’faithful and awe-struck media have failed to put two and two together. … ala the unConstitutional scope of this widened and unchecked authority that happens when you combine this unprecedented seizure of power over GM and Chrysler (which the WH says was ceded to them via TARP I), with Obama and Geithner’s push for a new financial regulatory authority over *other* institutions as a preemptive strike against potential economic fallout.

From the March 19th Economic Times article, linked above:

US President Barack Obama on Wednesday called for a new regulatory authority for financial firms to avoid damaging fallout like that from the government bailout of American International Group.

“What we are working on is a resolution authority that would be similar – not identical – but similar to the powers that the FDIC currently has over banks,” the president told reporters.

Obama said he had spoken with his economic team and Representative Barney Frank of the House financial services committee about “the importance of giving ourselves tools to prevent ourselves from getting in a situation where an AIG can pose such enormous vulnerabilities to the system as a whole.”

As I pointed out in my March 22nd post on this power grab, this additional power centralized in WH officials is planned via regulatory reform… not Congressional legislation. As Levin must well know by now, Congress is a body to be informed… not consulted… by this President.

Again the O’faithful will be fooled by the words, other “financial institutions”. The FDIC has the authority only to intercede in banks. This “resolution authority” that Obama and Geithner seek can apply to all “publicly traded” companies. And that includes companies like GM and Ford.

In fact, if you’d like to give yourself the willies, check out InvestorGuide’s list to publicly traded companies to see who’s at risk of being under Obama and Geithner’s preemptive regulatory eyes…. bailout or no bailout.

Even now – tho majority-owned by private-equity firm Cerebus Capital Management – Chrysler can’t escape the Obama admin demands that they consummate their heretofore considered marriage with Fiat SpA within the next 30 days. The attraction? Fiat’s engine and transmission technology that will *insure* the Obama admin’s suggested mandate that Chrysler create new, fuel-efficient small cars can be adhered to.

So where are we now? We have bailout after bailout on the horizon as Obama’s plan, and the government is assuming preferred share ownership in more and more companies (outside of banking) with each passing day. And to make all this easier, Obama is planning regulatory changes to preemptively seize publicly traded companies – widening the authority net to virtually every major corporation.

All these acts apparently will carry not only financial mandates, but industrial or manufacturing mandates as it relates to the industry, in order to “protect” the taxpayers money.

Yet the O’faithful and majority of media stand by silently… still unable to put two and two together for everything happening right under their collective noses.

But not all are silent to the big picture. That sharp-as-a-tack journalist of wit, Mark Steyn is *not* one of those media types in a prozac stupor. In a succinct few paragraphs on National Review’s blog, The Corner today:

Incidentally, the government “overhaul” of GM is a useful shorthand for where we’re heading:

The first quid pro quo for the government giving you money (or “investing”, as President Obama and David Brooks say) is that it gets to regulate your behavior. Not just who sits on your board or (see Sarkozy last week) where your factory has to be. When the government “pays” for your health care, it reserves the right to deny (as in parts of Britain) heart disease treatment for smokers or hip replacement for the obese. Why be surprised? When the state’s “paying” for your health, your lifestyle directly impacts its “investment.”

The next stage is that, having gotten you used to having your behavior regulated, the state advances to approving not just what you do but what you’re allowed to read, see, hear, think: See the “Canadian Content” regulations up north, and the enforcers of the “human rights” commissions. Or Britain’s recent criminalization of “homophobic jokes.”

You’d be surprised how painlessly and smoothly once-free peoples slip from government “investing” to government control.

Truer words may never have been spoken. As our economic system becomes more complex, the understanding of what these regulations and actions mean by concentrating such power into the hands of a few escapes average Joe Blow. The media – charged with keeping the US citizen informed – choose to stand idly by, instead fueling populous division and sowing the seeds of discontent for all the wrong reasons.

But here’s the absolute truth. The template for the seizure of business control was quietly laid down in a Nicorette-filled room off the Oval Office last week… exemplified by deciding the fate of private industry office holders, injecting government chosen administrators as future board members, and telling that company what they will make to sell.

Once we find that easy to swallow, we’ll have a hard time wresting such despotic control from the hands of the all powerful in all other facets of private enterprise. And one day, it might be a company you *do* care about.