Obama and the General Motors Cover-up

Right From the Start

Right From the Start

General Motors Company (ruefully labeled Government Motors) has issued recalls for over 17 Million cars in the United States alone. Some 2.6 Million of those involved the faulty ignition switch that has been blamed for over fifty accidents and some thirteen deaths. That in itself is a big story since General Motors (GM) has had a checkered history on safety issues – remember Ralph Nader’s condemnation of GM’s rear-engined Corvair, Unsafe at Any Speed.


But the bigger story is that GM knew about the faulty switch for over a decade before it was publicly disclosed during depositions and discovery by an attorney for one of those who died. It appears that many of GM’s senior executives knew about all or portions of the problems with the faulty switch and that most chose to ignore it. The period of time during which the information about the faulty switch was known internally included the period of time during which the Administration of President Barack Obama was running General Motors.


During the economic collapse of 2008, the mismanagement of GM coupled with the excesses of its labor unions (healthcare and pension plans) resulted in its insolvency. Mr. Obama engineered a bailout of GM in which the federal government pumped over $50 Billion into the company and took a sixty percent ownership of the post-bankruptcy General Motors. Mr. Obama named a majority of the members of the new board of directors, fired the president of the company and installed the new management team (albeit primarily from existing senior management). Mr. Obama and his administration retained sufficient control to demand production of the ill-fated Chevrolet Volt in pursuit of his pipe dream of “green energy” motor vehicles.

And all the while the cover-up continued.

Look, it’s nice to be able to shrug and blame somebody else for your problems – Mr. Obama’s favorite tactic. But in the world of high finance, mergers, acquisitions, hostile takeovers and, yes, even bankruptcies, the first thing an intelligent management group demands is an audit – usually as a part of the acquisition process. They do so to ensure that there are not any hidden problems that will adversely effect the enterprise as they assume control. Given the number of people knowledgeable about the faulty ignition problem, it is difficult to believe that even a cursory audit would not have alerted the Obama Administration to the existence of the problem which, in turn, would lead to an inquiry as to the depth of the problem.


But no such audit was conducted. But then again, it wasn’t their money they were risking – it was just the taxpayers – so why bother. More over, Mr. Obama’s National Highway Transportation and Safety Administration (NHTSA) spiked staff requests for investigation of the crashes now determined to have been caused by the faulty ignition switch – the latest being in February of 2010. This represents a continuity of inaction by Mr. Obama’s administration in which a federal agency entrusted with the protection of the citizens, instead protects the President from criticism and accountability.

With the long suppressed revelation of fault, America’s class action tort lawyers have roiled the litigation waters in a quest to line their own pockets at the expense of those that were actually injured. And while the trial lawyers have routinely supported Mr. Obama, it won’t be long before greed blunts loyalty and the federal government is included as a defendant based on its active or passive knowledge of the faulty ignition and its failure to notify and resolve the problem. But in the final irony it won’t be Mr. Obama, or his Administration, that suffers; it will be the taxpayers who will have to foot the bill for any judgment rendered against the government. And that will be just like the current shareholders of GM, rather than the officers and directors who caused and covered-up the problem, who will foot the bill for judgments against GM – and these are shareholders who should have been apprised by the Obama Administration (then in control of GM) of the potential liability before the initial public offering of the new GM.

Is there nothing that this man touches that is not corrupted by him and his administration?