Galarraga’s Corvette

By now everyone probably knows the background story: Detroit Tigers pitcher Armando Galarraga didn’t get credited with the perfect game he pitched last Wednesday, due to a bad call made by the umpire. Fast-forward a day to General Motors tapping into international sympathy felt for Galarraga by giving the ballplayer a red Corvette convertible. A public-relations coup…pure genius, right?

Well, unless you’re given to armchair micromanagement, in which case you slam GM for wasteful spending.

Here’s the story, by the New York Times’ Nick Bunkley: G.M.’s Gift of a Luxury Car Stuns a Few.

A free sports car for a Detroit Tigers baseball player was not among the reasons the government saved General Motors from financial collapse. Nor was a year’s supply of diapers and other gifts for a Minnesota woman who gave birth behind the wheel of a Chevrolet Cobalt.

General Motors has given away both in recent weeks — marketing ploys that would have barely raised an eyebrow in the past. But now that American taxpayers collectively own a majority of the carmaker, executives are learning that there are more than 300 million potential second-guessers out there.

The complaint, of course, is ridiculous. Never mind the fact that it’s so patently obvious, even to those of us who are not experts, that this was a brilliant move by GM. The bigger point here is that most of us (including the critics mentioned in the NYT story) are not experts, either in public relations or in corporate management more generally.

Now, that’s not to say that non-experts can’t express an opinion. (The fact that I have a “Comments” section on my blog essentially constitutes an invitation to experts & non-experts alike to comment.) The point is that shareholders in GM (including, now, indirectly, all U.S. citizens) have little business feeling aggrieved over each and every minor managerial decision, even ones they suspect are misguided. Shareholders hire managers to manage — to make decisions. Courts have long recognized that, once you empower someone to run a business, you basically need to back off and let them do their job. There are exceptions, of course. The American people now hold a major stake in GM, and they should be worried if they see GM managers heading in any truly disastrous directions. But being a shareholder neither qualifies you, nor entitles you, to have a say in day-to-day decision making. So critics of GM’s gift should feel free to play armchair umpire; but they shouldn’t expect anyone to take them seriously.

2 comments so far

  1. […] in a totally successful effort to keep my off balance has a new post on June 6th. Entitled Galarraga’s Corvette, MacDonald while admitting that everyone is entitled to an opinion points out that even though tax […]

  2. Tom Herrnstein on

    I agree, as taxpayers we shouldn’t get involved in the management details of GM—particularly because the public shouldn’t want to “own” GM for longer than necessary. The role of the government taking over controlling interest was one of saving GM from collapse and the subsequent fallout, not for the sake of having an interest in running the company or shaping its products. Advocating the taking of positions on what GM does on such a minor level seems to imply that the aim was indeed an elective governmental takeover of a private company, something we should hope is not the case. And it was great publicity.

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