Wash. Post misleads on Obama administration plan for GM ownership

››› ››› DIANNA PARKER

The Washington Post quoted Mitt Romney saying that "the American public" -- not the president -- "ought to own" GM. But the article did not note that the Obama administration has said it has "no desire" to own equity in GM "any longer than necessary," and reportedly plans to sell all of its shares in the company within 12 to 18 months.

In a June 2 Washington Post article about former Massachusetts Gov. Mitt Romney's (R) criticism of President Obama, reporter Chris Cillizza wrote that "Romney was on 'Fox News Sunday' taking issue with the administration's plan to put General Motors into bankruptcy to restructure the company," and then quoted Romney as saying: "We don't want a president and a head of the [United Auto Workers] running General Motors. ... The American public ought to own that enterprise." However, in quoting Romney's criticism, Cillizza did not note that the Obama administration has said it has "no desire" to own equity in GM "any longer than necessary," or that the administration reportedly plans to sell all of its shares in the company within 12 to 18 months.

In a May 30 document outlining the framework for restructuring GM, the Obama administration stated that one of its "core principles" regarding government ownership in private firms -- which "will apply to the U.S. government's equity stake in GM" -- is that it has "no desire to own equity stakes in companies any longer than necessary, and will seek to dispose of its ownership interests as soon as practicable." The White House also stated, "The government will not interfere with or exert control over day-to-day company operations," will "only vote on core governance issues," and will be "extremely disciplined" in how it exercises its shareholder rights. A "senior administration official" reaffirmed the government's position in a May 31 briefing, saying, "GM will emerge as part of the [Section 363 of the bankruptcy code] process; and then the company will continue, as we said, as a private company operating in the for-profit commercial role and so forth. And the government, as we indicated, is a reluctant -- will be a reluctant shareholder for only as long as is necessary, for as long as -- we will be out as soon as is practicable." The official continued: "During that period of time, we imagine that the taxpayers want us to be looking after their money, and so as we indicated, there will be people here watching over that investment, but as I indicated, in the nature of passive shareholders similar to Fidelity or some other large investment firm that has a large stake in a company."

According to a June 2 Los Angeles Times article, "[White House auto adviser Steve] Rattner said GM would emerge from bankruptcy a private company and become public again in 12 to 18 months. The government expects to sell its shares in a series of transactions over time to maximize the return." The article quoted Rattner as saying, "[W]hile we want to exit as soon as possible, we also want to exit as soon as practicable in terms of being good custodians of the taxpayers' money." Similarly, a June 1 Detroit News article reported that "GM will remain privately held for at least six to 18 months," and that "U.S. Sen. Carl Levin, D-Detroit, said Monday it could be 'a few years' before the government sells its entire stake." The article also reported: "The government will have to sell its shares in chunks, likely in at least three separate transactions, Rattner said. Each sale could take at least six months."

From the Washington Post:

Less than 24 hours before hitting Obama on defense and national security, Romney was on "Fox News Sunday" taking issue with the administration's plan to put General Motors into bankruptcy to restructure the company.

"We don't want a president and a head of the [United Auto Workers] running General Motors," Romney said during the appearance. "The American public ought to own that enterprise."

Although Romney is derided by many Democrats, he is one of the most popular figures among the Republican faithful, many of whom believe his work on behalf of Sen. John McCain (Ariz.), the GOP presidential nominee last year, proved his mettle.

Republicans also regard Romney as perhaps their most effective economic messenger, able to draw on his success in the private sector in combating Obama.

Posted In
Economy, Government, The Presidency & White House
Network/Outlet
The Washington Post
Person
Chris Cillizza
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