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Bailout Watch 484: Geithner: Wagoner Firing is The Exception That Proves The Rule
by
Robert Farago
(IC: employee)
Published: April 5th, 2009
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SCHIEFFER: Well, let me take, for example, two of the people your hear a lot about, and one is Citibank and the other is — is Bank of America.
Should the CEOs of those institutions be worried that they may face the same fate as Rick Wagoner did if their performance does not improve?
GEITHNER: Bob, what I’ll say is this. When, in the future — or I’ll just say, if, in the future, banks need exceptional assistance in order to get through this, then we’ll make sure that assistance comes with conditions, not just to protect the tax payer but to make sure this is the kind of restructuring necessary for them to emerge stronger.
And where that requires a change of management of the board, we’ll do that.
Robert Farago
More by Robert Farago
Published April 5th, 2009 7:17 PM
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I keep getting confused. It is hard to keep track of which days we are supposed to be happy that Wagoner is gone and which days we are supposed to be outraged he was fired. Can we move to a simple schedule. I propose glee on Mondays, Wednesdays, and Fridays; and outrage on Tuesdays, Thursdays, and weekends.
yankinwaoz : April 5th, 2009 at 10:51 pm "Technically, Wagoner resigned. He was not fired by anyone. The White House said “Why don’t you resign?” and he did it." I imagine it was more like this: R.W.: "Hi, glad to visit you again." Treasury: "Your plan stinks, you have to go." R.W.: "But I just got here, and it was a really long drive and I have a new plan." Treasury: "Not what we meant, and we don't care. We are firing you." R.W.: "Isn't that up to my board? And what if I don't?" Treasury: "No, we are your largest ober-super-senior-secured creditor, and either you quit, or we pull our money." R.W.: "Oh. Is Monday soon enough?" (That way, I can claim the mileage for the return trip on my expense report.)
If you go to a lender to borrow money, then you have to accept their conditions that come with the money. If you don't want to accept their conditions, then find a different lender or don't borrow the money. It is as simple as that. GM and Chrysler don't have to accept the government's conditions. Of course, if they reject the government's conditions, then they won't get the billions in government support, and they'll end up in bankruptcy. It is not a surprise that the government would require management changes.