CBS Offers One-Sided Analysis of GM's Bankruptcy Plan
As GM filed for a long expected bankruptcy under Chapter 11 on June 1, CBS’s “The Early Show” offered a report this morning that failed to acknowledge key facts and opinions regarding the bankruptcy and the role of the federal government and the United Auto Workers.
Although the federal government now owns a majority interest in GM – an unprecedented intrusion of government into the private sector – “The Early Show” wasn’t concerned. CBS News chief White House correspondent Chip Reid told viewers that, “While the rescue plan will give taxpayers a 60 percent stake in the new company, the Obama administration says it has no intentions of exerting day-to-day control.”
In taking the administration’s assurances at face value, Reid ignored the government’s ability to ensure control through its appointments to GM’s board of directors. And, though Reid reported that 11 GM plants will be shut down and three will become idle, he failed to mention the company’s tentative plans to retool an existing assembly plant to build a new small car. Many feel that decision demonstrates the government’s early control of this company, control that could grow with time. Nor did he mention the UAW’s 17.5 percent ownership and the roadblocks that may pose to serious reform.
”Early Show” host Harry Smith then interviewed Democrat Michigan Governor Jennifer Granholm to get her take on the bankruptcy, the government’s role, and what else needs to be done.
Predictably, Granholm toed the administration line: “Well, I'll tell you, if the White House had not stepped in, we wouldn't be talking about restructuring,” she said, “we'd be talking about liquidation.” She offered no evidence as to why standard Chapter 11 bankruptcy proceedings would have failed in GM’s case. Nor does Smith press her on the issue.. As the only guest on the show, Granholm’s pro-government views were neither debated nor refuted, but merely accepted.
When asked if $50 billion dollars from the tax payers will be the end, Granholm spouted praise for Obama’s “commitment,” stating: “Well, that's the hope. And that's what the Obama administration is not just counting on, but helping this restructuring happen to be sure they emerge, as your report just said, leaner and stronger. And I think that is exactly what will happen. And when you combine the president's commitment with having a strong GM, and now Chrysler hopefully paving a path for emerging from bankruptcy in record fashion, we will have a viable auto industry, and therefore a viable manufacturing industry in the
In singing her premature praise for the success of Obama’s plan for GM, Granholm dismissed the notion that $20 billion of tax payers’ money has already been wasted in a failed attempt to save the company from bankruptcy, and another $30 billion could be thrown away if GM fails to “emerge” from the bankruptcy as a new success. When asked if GM should have filed for bankruptcy earlier, a move that could have saved taxpayers $50 billion, she answered, “Well, you know, I've never been one who's been a big bankruptcy fan, because you can't get people to buy cars from a bankrupt company … This is why it's so important for congress to pass this ‘Cash for Clunkers’ bill to stimulate demand like they've done in other countries in Europe. That's helpful not just for the auto industry but for the economy overall.”