Government Motors

I was reading an article about GM's bankruptcy in the Financial Times where Obama said that the government was a "reluctant" shareholder, that the government would not have a heavy hand in the company, and operations would remain "business as usual." They also tried to say that GM would be a public company again within a year.

Not likely. All this reminded me of an interesting quote from Milton Friedman, "Nothing is so permanent as a temporary government program." 

Other than that I don't even know where to begin. Having read about this issue and after covering it in some of my business classes I can't say I was surprised to see General Motors file for Chapter 11 bankruptcy. What irks me is that this does not seem like a real bankruptcy proceeding. It is more like the outright nationalisation of the auto makers and I don't see how this course of action could possibly improve the situation. Keeping things "business as usual" was part of the problem at GM, and with governments appointing most of the board of directors I don't see how they could not have a heavy hand in how the company is being run. 

I agree that what should emerge from "bankruptcy" should be a leaner, more nimble company, but does anyone think that's possible with the block holders being the government and the unions? The unions sucked the lifeblood out of GM and the government hasn't been innovative since it wrote the Constitution. 

Instead of being a reluctant shareholder in these companies I would rather see them go through real bankruptcy proceedings. Then maybe we would find out if there's anything people actually wanted to save.