As per the deal, the government of United States will inject 30 billion dollars into the "new GM" in lieu of the 60 percent stake in the Michigan based automaker. The government has already infused an amount of 20 billion dollars in the company.
Unenviable position of Obama
First and foremost, President Barack Obama, who performs his duty as a ‘reluctant shareholder-in-chief’, will have to digest the fact that overseeing the operations of the insolvent icon is fraught with political risks, administrative indecision and possible clash of interest, given that the government will act, both as a knight in shining armor and a watchdog.
Addressing concerns that the huge and slow U.S. government is not dexterous enough to handle the agile and dynamic commercial markets, Obama clarified that he has no interest in running the automobile business.
He said, “What we are not doing -- what I have no interest in doing -- is running GM. Our goal is to get GM on its feet, take a hands off approach, and get out quickly."
John Boehner, the top Republican in the House of Representatives, had questioned, "Does anyone really believe that politicians and bureaucrats in Washington can successfully steer a multinational corporation to economic viability?"
Obama categorically replied that the government will not interfere in the day-to-day operations of GM and that the administration will have no role to play in deciding which plants to close down or which dealers and suppliers to retain during the massive restructuring process.
The pressure on Barack Obama is bound to rise as both Democrats and Republicans will holler for changes that suit them. The biggest challenge: Justifying the bankruptcy decision to the thousands of people who lost their livelihood because of this.
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