With bankruptcy and a government takeover looming for auto giant General Motors, three prominent US business leaders cautioned Sunday that the government should get out of corporate boardrooms as quickly as possible.
“I think all of us understand the need for the government to intervene and take the actions they did,” said Anne Mulcahy, chief executive of Xerox. “But I also think there’s a need for an exit plan.”
General Motors was poised to file for bankruptcy protection as early as Monday when a deadline imposed by the administration of President Barack Obama for submitting a viable restructuring or declare bankruptcy comes due.
A government rescue plan for GM could put as much as 72.5 percent of the country’s biggest automaker under state ownership. Chrysler already has led the way to bankruptcy courts.
The CEOs interviewed on NBC television’s Sunday talk show said GM should use the bankruptcy courts and a government bailout to dramatically restructure, shedding labor costs and excess capacity to emerge stronger, leaner and more competitive.
But they also expressed concern about the longer-term implications of government control of the auto giants.
“I think that’s fundamentally unhealthy,” said Jim Owens, chief executive of Caterpillar. “The federal government needs to be in and out.”
“They need to help get the restructuring done. But I think, fundamentally, the American public, I think they want to choose the best vehicle, the best car. And American manufacturers need to be focused on competing,” he said.
Google’s Eric Schmidt noted that the US stimulus package was designed to cover a two year period.
“It’s very important that government get out of business and let business do its thing,” he said. “The most important thing to remember, I think, is that jobs, wealth, are created in the private sector. That’s about capitalism.”
“The other thing that has to happen is you’ve got to change the rules so we don’t end up with all these organizations that are too big to fail again,” he said. “We’ve done a fine job bailing them out. Let’s only do this once per lifetime.”
He said the auto companies are going to be “highly incentivized to get all that government money back out.”
“Because the last thing you want is the government in your board room telling you what to do,” he said.
