Thursday, April 30, 2009

This is not good news

WASHINGTON (AP) -- If the government takes a majority stake in General Motors, will it end up taking the wheel, too?

Under a restructuring plan put forth this week by GM, the ailing automaker would give majority ownership to the federal government to stave off bankruptcy. That handoff would amount to an extraordinary partial nationalization of the maker of Buicks, Cadillacs and Chevys that has been an independent company since 1908.

The Obama administration has said it isn't interested in running an auto company, but with that big of a stake, some analysts say the government would probably be tempted to push its own policies on such issues as alternative fuel vehicles and unions. And that could affect the types of cars that roll off GM's assembly lines.

"The fear here is that a company owned by the government would move toward the do-good results, not the bottom line," said Gerald Meyers, a University of Michigan business professor and former CEO of American Motors Corp.