Bailout Watch 484: Geithner: Wagoner Firing is The Exception That Proves The Rule

Robert Farago
by Robert Farago

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
Robert Farago

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  • Qwerty Qwerty on Apr 06, 2009

    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.

  • U mad scientist U mad scientist on Apr 06, 2009
    Is anyone seriously arguing the moves to this point are wrong? Should Rick Wagoner and the members of the BOD that have been in charge of the ship still be in charge? As I recall, TTAC commentators were not praising the viability of the GM recovery plan. In case not everyone's noticed, here's how "conservative" minds work: money making or extorting business > bankrupt business > government. All of this was a decent idea when the market was supposed to do it. Of course, we all saw how that turned out, so when the gov stepped in to do the same thing, it's automatically demoted to bad idea. If only the economy or the real world in general could be as predictable as ideologues.
  • Robert.Walter Robert.Walter on Apr 06, 2009

    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.)

  • Jared Jared on Apr 06, 2009

    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.

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