In one of the more celebrated government bailouts, General Motors received $58 billion in taxpayer money to stay in business. The auto maker still filed for bankruptcy protection and emerged from that process with the federal government holding a 60 percent stake in the company. Now members of Congress are seizing the opportunity by putting pressure on GM decision makers in order to protect jobs and businesses in their home districts. This is dramatically affecting the way the company does business. The experience provided lessons learned for other bailed-out companies, some of whom are returning bailout money rather than risk government meddling in their own affairs.
- As represented by the article, what type of control is General Motors experiencing? In what ways does this control mirror that imposed by the Sarbanes-Oxley Act?
- From an operational standpoint, why is this control necessary?
- What is a stakeholder? Identify the stakeholders in this story (note, some of these may be implied). What role, if any, should stakeholders have in the operations of a company like General Motors? Defend your answer.
SOURCE: N. King, “Politicians Butt In at Bailed-Out GM,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB125677552001414699.html)