Tuesday, June 2, 2009

Fascinating Case Study ...

... the effective nationalisation of General Motors by the US Government. With the second largest shareholder being the autoworkers' union. Please click on the title of this post to see an article on the US Government's view on GM.
Let me see if I get this right - you have the largest shareholder (the US Government) who say they want a hands off role (but you can bet your bottom Dollar that if there's any media coverage on executive perks, compensation that could be considered excessive etc that management will be hauled in front of those US congressional committees and that Government interference will happen when politically expedient), the second largest shareholder (the Union) whose role is basically to protect the interests of current and retired union labour and lastly management, many of whose stock has been wiped out and will remain relatively poorly incentivized by definition!
Sounds so much like the path the Indian public sector started down many years ago doesn't it?

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