New GM Chair: 'I Don't Know Anything About Cars'; He's Just the Latest in a Long Line

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You can't make this stuff up. The titled quote comes from a Bloomberg story today about new GM Chairman Ed Whitacre. You also can't make up most of the media's calm acceptance of yet another person heavily involved with running General Motors, aka Government Motors, who knows next to nothing about cars except as a consumer who drives them.

At least it's refreshing that this guy has experience running a business, which is more than you can say about the other two architects of the company as it currently subsists.

On May 31, the New York Times put out a fawning portrayal of the a Mr. Brian Deese, the guy who was the only full-timer on President-elect and then President Obama's car team from Election Night until mid-February.

Fasten your seat belts, this guy's lack of any kind of pedigree will have you death-gripping the steering wheel, as will the smug dismissiveness of a business system that has been the most successful in human history:

The 31-Year-Old in Charge of Dismantling G.M.

It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

.... “There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”

.... Mr. Deese’s role is unusual for someone who is neither a formally trained economist nor a business school graduate, and who never spent much time flipping through the endless studies about the future of the American and Japanese auto industries.

Of course, why do all that boring stuff when you can just jump in and pretend?

To Deese's luck (I refuse to give anyone "credit" for making a decision that had no basis in experience), he did figure out that GM and Chrysler were heading inevitably towards bankruptcy because of falling revenues. But there's no evidence that he saw the plunge as anything but a continuation of their current problems, when in fact the two companies faded faster than their competitors earlier this year because of their bailed-out condition, not in spite of it. If this weren't the case, why has Ford's situation improved dramatically to the point where its worldwide sales outpace GM's?

Read the whole thing, if you can stand it. Would any newspaper have given such a lightweight a free ride if he worked in a Republican administration?

Then of course there's the car czar himself, Steve Rattner. Rattner's post-journalism career consists of about 10 years as a private-equity investor (I guess some of them are more equal than others) and as a dealmaker. There's nothing wrong with that, but it's not the same as actually operating a business that makes things. Rattner also has hints of a shady past in his dealings with the New York State pension fund that may yet come back to haunt him. And, of course, Rattner has great Democratic Party political connections.

Whitacre rounds out the list. Though his resume is clearly the strongest of the three, and an outsider's perspective is likely quite welcome in this case, it remains a fact that at AT&T he was ran what was a service business that happened to sell some products, not an outfit like GM which does the opposite, and was of necessity and by strategy more focused on mergers and acquisitions than day-to-day operations.

That said, the Wall Street Journal's Holman Jenkins today astutely pointed to Whitacre's unique pedigree, and how it may fit into the brave new world of government ownership:

What the company needs more than anything else is a political strategy. Its loss of political clout has been catastrophic, leading to (among other things) devastating new CAFE regs. But he has one big leg up on his GM predecessors: A Democratic administration now owns GM and needs it to succeed financially. The voice of reason will be heard because it's in Democrats' interest to hear it. He can surely expect, for instance, to find Team Obama amenable to a certain amount of quiet fudging of its new fuel mileage rules to keep GM's pickup and SUV profits flowing.

Make no mistake. Mr. Whitacre's task won't be selling cars (somebody else can do that) but reshaping the policy environment in which GM must operate. His model should be another Ed -- Ed Jordan, who as chief of the nationalized Conrail never received the credit he deserved for rescuing the carrier by leading the charge for regulatory reform on Capitol Hill.

His braintruster was Leo Mullin, who went on to lead Delta Air Lines, and who as a young Conrail veep built the case that Conrail would become a permanent drain on taxpayers unless the rail industry were free to design and price its services with the sole object of making a profit for investors.

But Whitacre's task makes Mullins look like child's play. For GM to survive and ultimately break free as an independent entity like Conrail, you have to start with the assumption that the government wants to get out of the car business. His platitudes to the contrary, I don't see how anyone can reasonably think that this is the Obama's intent. And even if he changes his mind, I don't see how his party will let him carry through with it.

Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.